Of course, its not just smaller operators that face a higher risk of permanent closure. According to NATO, major chains are struggling to keep up. AMC entertainment Holdings Inc., the worlds largest theater touring company, issued a going concern notice saying it was able to continue its operations before acquiring new funds. Cineworld Group PLC, which runs Regal, the second largest U.S. cinema, warned earlier this month that more money might have to be raised.
But the industry is still struggling. On the one hand, it is difficult for theater owners to attract audiences and repay their debts due to the successive postponements of new films. On the other hand, Ministry of health officials have categorically banned re opening in some places, and operators have been forced to restrict ticket sales due to social distance regulations. However, in fact, cinemas have spent millions of dollars on new security in order to attract consumers back to the cinema And social distance agreement, including limiting attendance.
Sale of 15 million shares for debt service
Not only small and medium-sized cinemas, but also AMC theaters, the largest chain cinema chain in the United States, are struggling.
In March 16th, the novel coronavirus pneumonia affected the AMC theater, which announced that it had closed 1000 theaters, including 661 North American Theaters, including 600 employees including CEO Adam Alan, who temporarily suspended their jobs to keep cash.
Although the companys cinemas have opened in the second half of the year, the situation is still not optimistic. In its September 24 announcement, the company said its theater business in the U.S. market had been suspended for the entire second quarter ending June 30, 2020.
Since the U.S. market resumed operation, the attendance rate has basically maintained between 25% and 40%. As of September 14, 2020, the company has served more than 1.4 million guests. However, compared with the same period a year ago, the audience number of the theater has decreased by about 81%.
We currently estimate that unless there is a significant increase in theater attendance from the third quarter of 2020 to the fourth quarter of 2020 and 2021, and our attendance rate is close to three-quarters of the normal level, the company will continue to need additional liquidity to meet maturing debt, which may be very large for AMC, the company said
To repay the debt, AMC also said in its September 24 announcement that it would sell 15 million shares to raise funds to meet the impact of health events, including repayment, refinancing, redemption or repurchase of existing debt or working capital, capital expenditure and other investments.
Previously, the company had sold the Baltic theatre. As of August 31, 2020, the company had a cash balance of $507.9 million, including an initial gain of $37.5 million from the sale of the Baltic theatre.
In the secondary market, the stock price of AMC fell to US $1.95/share due to a number of negative news. Among them, the share price of AMC fell sharply by 21% on April 9 and 20% on April 13. As of the latest closing, although the companys share price has slowly recovered to US $4.65, it is still about 70% lower than that of US $16 last April.
A number of industry celebrities wrote to Congress
Call for the cinema to be saved
The joint letter is mainly aimed at a vote on a $2.2 trillion coronavirus stimulus bill postponed by the house of Representatives. It is intended to call on Congress to redistribute the remaining funds of the care act. To the entertainment industry, or to enact new legislation to inject funds into cinemas to help cinemas destroyed by the new coronavirus epidemic.
The following is the full text:
Distinguished leaders McConnell, Speaker Pelosi, Schumer and McCarthy
Thank you for your leadership at this challenging time for our country. When you consider the coming covid-19 rescue legislation, we ask you to give priority to the industries that have suffered the most, such as our countrys favorite cinemas.
The pandemic has dealt a devastating financial blow to cinemas. 93% of cinema companies lost more than 75% in the second quarter of 2020. If this situation continues, 69% of small and medium-sized cinema companies will be forced to file for bankruptcy or permanent closure, and 66% of cinema jobs will be lost. Our country cannot lose the social, economic and cultural value that theaters provide.
But the people have low desire to watch the film
As unemployment soared at the start of the spring pandemic blockade, most of the money from the care act went to workers and small businesses to help them pay for basic necessities during the crisis, with relatively little going to cinema related sectors.
According to a new survey conducted by performance research in collaboration with fullcircle research, consumers believe that cinemas and live music concerts are among the industries with the most severe coronavirus pandemic. However, despite this understanding, when asked if they would support the use of federal relief funds for these industries, the opposite is true.
Only 16% of the people think that cinemas should be subsidized, but restaurants, museums, etc. get more sympathy and support, which shows that many people feel that the entertainment industry is not in the most urgent need of rescue and recovery, and they are not very active in going to cinemas and concerts. Many people said that they would prefer to watch at home, even if the price was to pay more and shorten the window period of cinema and online on-demand.
The survey of more than 1000 U.S. viewers from August 3 to 10 showed that most viewers are not forced to watch movies in cinemas, but are willing to accept or enjoy watching movies at home.
Even in the 90 day window period from cinema to online, only 12% of the audience said that they must watch the new film in the cinema first, 15% of the audience said that they might watch the new film in the cinema first, 29% did not care whether they went to the cinema or at home, 21% might watch it at home, and 23% must watch it at home.
If the cinema and digital platform are released simultaneously, up to 39% of the people choose to watch at home. And the first choice has to be a cinema, and maybe a cinema, with only 15% of the audience.
This may also explain why, although more than half of the North American cinemas are back to work, they still need to face a huge debt crisis.
Over the weekend of September 18-20, 3453 of about 6000 cinemas in North America were back in operation because more jurisdictions allowed movies to be shown, according to comScore.
Several films have been delayed
The lack of new films in Film Studios has brought serious difficulties to cinemas. Film studios do not plan to arrange the release of new films until November. Some new films that have been scheduled for release have been postponed for a time.
For example, the black widow, which was originally scheduled to be released on May 1, 2020, was postponed to November 6, 2020, and then postponed to May 7, 2021;
Magic woman 1984, originally scheduled for release on October 2, 2020, was also postponed by Warner to December 25, when tenet premiered;
Shangqi, originally scheduled to be released in February 2021, was postponed to May 7 and then to July 9 next year;
The eternal family, originally scheduled to be released on February 12, 2021, will be directly postponed for more than half a year to November 5, next year;
The original release of deep water on November 13, 2020 was postponed to August 13, 2020;
There are also the same films that were originally planned to change, but the earliest release dates are after November.
For example, the current schedule of journey of the soul is still on November 20, this year in North America, and the cinema has not been cancelled;
The tragedy on the Nile was postponed from October 23 to December 18, and is still scheduled to be released this year, but only if Christmas can return to normal. However, according to the current epidemic situation in the United States, the movie will probably be delayed.
The reason why many films have been delayed one after another is that the new crown epidemic has been rampant in the United States, which has greatly affected the box office. Another important reason is that the death squads who do not believe in evil are in front of them.
Up to now, creed has made a total of 41.2 million box office in the United States. Its performance in the United States is still poor, and its word-of-mouth is not particularly excellent, which is lower than the expectations of Warner Brothers and the cinema chain.
On the contrary, Chinas regional box office revenue has become the biggest support of the creed. According to box office mojo statistics, the film has earned $284 million at the box office, including more than 400 million yuan (about 62 million U.S. dollars) in box office revenue, far surpassing North America as the films largest ticket warehouse, and putting the creed in the fourth place in the world box office in 2020.
In addition, it is worth noting that eight hundred has won the world box office title with a record of $442 million. So far, it has surpassed the former champion Jedi police: fast track released in August. The gap between the two films is about 15 million dollars. However, with the resumption of domestic cinemas, it is predicted that many domestic films with strong box office will be on the list. Source: Zhang Mei, editor in charge of China fund daily_ NF2100
In addition, it is worth noting that eight hundred has won the world box office title with a record of $442 million. So far, it has surpassed the former champion Jedi police: fast track released in August. The gap between the two films is about 15 million dollars. However, with the resumption of domestic cinemas, it is predicted that many domestic films with strong box office will be on the list.