AMC avoids bankruptcy, at least for now

AMC won’t run out of cash in the near future. The movie theater chain announced it has raised or received commitments for $917 million in debt capital and equity, or enough to put a near-term bankruptcy “off the table.” The company said it had a lifeline extending “deep into 2021,” or long enough that it might see a recovery as the winter COVID-19 surge (hopefully) fades and mass vaccinations give people a chance to safely return to theaters.

The company acknowledged that there was still plenty of uncertainty due to new coronavirus strains (such as the UK and South African examples) and other factors.

AMC had been optimistic about reopening last summer with plans to resume business at two thirds of its theaters by September 2020. However, that didn’t translate to increased audiences — ticket sales fell 92 percent year-over-year in October and November. Moviegoers just weren’t willing to risk their health to watch on the big screen, and that wasn’t helped by studios either delaying theatrical releases or sending titles directly to streaming services.

Even if vaccine rollouts help AMC resume operations later in 2021, there’s still the question of whether or not customers will rush back. Major studios are planning simultaneous theatrical and streaming releases for their tentpole movies, or in some cases are going streaming-only. Add delays for movies like Uncharted and audiences may be content to stay at home regardless of how safe it is to visit theaters.