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If one wanted to catch up on the latest big-screen endeavor at their local cineplex, then there’s a good chance that the theater they go to is owned by AMC Theaters. Founded in 1920, AMC currently operates at over a thousand locations with over 11,000 screens among them, making the company the largest theater chain in the world. With their long history and large number of venues, it’s safe to say that even with strong competition from other chains like Regal and Cinemark, AMC retains a strong percentage of the theater industry’s earnings.
Or at least that has been the case until this year. As a result of the COVID-19 epidemic throughout the globe, the majority of theaters have been closed in order to reduce the spread of the disease, meaning that they are unable to profit off of any films they could be showing had this not been the case. While every chain has been severely impacted in some way or another by this outbreak, AMC seems to have been hit harder than any other chain. The company’s stock value has been falling with seemingly no end in sight, employees throughout the company have been furloughed, and there have even been talks of AMC filing for bankruptcy. To say that AMC is currently in crisis mode would be an understatement.
So what would happen should AMC go out of business, and what would this mean for theatrical distribution and distributors like World Wide Motion Pictures Corporation?
For one thing, if AMC were to shut down entirely (or even cut costs enough just to remain afloat), it would have to sell off its assets, specifically its many multiple-screen venues. But who could afford such large establishments? One would like to see these theaters go to smaller companies that might not have as big of a presence in the industry. Despite the overwhelming presence of a select handful, there are actually many other theater chains founded in the United States. Most of these keep their focus primarily to a specific region of the country, including Classic Cinemas in the Midwest, Regency Theaters in the Southwest, and National Amusements in the Northeast.
Should AMC have to give up some of, if not all, its theaters, any of these smaller chains could potentially take over. Alternatively, some of these theaters could become their own independent business outside of a major company. If more chains and independently owned theaters were to become stronger competition, ticket and concession prices might even start to decrease, as moviegoers would be tempted to go to whichever theater is the least expensive.
There’s one problem though: because these venues are so large and more expensive to operate than those with a lower number of screens, smaller businesses may not have the money to purchase and maintain such large structures. As a result, theaters previously owned by AMC could only be sold to major corporations that already have a major stake in the global economy. So would they go to other big theater chains then? Potentially, but given those same companies are also undergoing major financial stress as a result of the Coronavirus, they may not be so quick to acquire new locations.
What corporations might be interested in purchasing these theaters then? Arguably several, but there are strict limitations as to who could buy them. According to the United States v. Paramount Pictures Supreme Court ruling in 1948, companies involved with the production and distribution of films are not permitted to hold a major stake in film exhibition. In other words, while a company like Disney can own a single theater (like they do with the El Capitan Theater in Hollywood), they cannot own a chain of theaters. This rules out corporations like Sony and Comcast, as their business already consists of major film production and distribution. Even Amazon, not widely known for its films, might have difficulty when it comes to theater acquisition.
Who does this leave? One may think the number of potential buyers would be quite large, but this is not a realistic picture. For some major corporations, like oil conglomerate ExxonMobil, owning movie theaters might be too far from their field of expertise, and may not want to risk competing in a business they have little familiarity with. For others, like technology giants Google and Facebook, they might already have such a strong presence in the media landscape that they could potential violate the US v. Paramount ruling with their own content, therefore making them unwilling to buy theaters.
As one can see, there’s no easy answer when it comes to how AMC would have to deal with bankruptcy and what to do with the theaters they would no longer be able to operate. That being said, all of this is under the assumption that AMC would indeed go out of business, which has not happened yet. So could AMC be spared from this fate? If so, how?
For the time being, AMC and other theater chains are not expected to open their locations until later this summer, hopefully by the end of July. With most of the nation being self-quarantined, there will be a major demand for activities outside the home, as people now have the opportunity to leave their houses and make the most of their newly gained freedom. For many, the movie theater will be their target destination, especially since highly anticipated releases that had previously been postponed, like Disney’s “Mulan” and Warner Bros.’ “Wonder Woman 1984”, will now be available for viewing, and any theater showing such films will likely see a huge turnout. This is exactly what movie theaters want to believe will happen, and that includes AMC.
Can AMC hold off the threat of bankruptcy long enough to take advantage of a boom in business once national quarantine comes to an end and people are allowed to go back to theaters? Many analysts currently claim that the company filing for bankruptcy, while not an outright certainty, is becoming more likely with each passing day. Still, even if the company does end up resorting to a bankruptcy filing, it wouldn’t automatically mean the end of AMC, so for those concerned that they will no longer be able to attend their local AMC theater and have to travel farther to a different location, there’s no need to worry, especially with a string of long-delayed blockbusters waiting to be released.
AMC may not be under the best of conditions, but if it has managed to survive for a whole century, then hopefully it has a chance of surviving this time of crisis and providing an outlet for a wide variety of films from companies like World Wide Motion Pictures Corporation.
