Movie Theater Chains Fight to Survive: AMC Staving Off Bankruptcy, Regal Shattering Release Windows

As the coronavirus (COVID-19) pandemic nears the one-year mark and movie exhibition chains have remained closed for nearly as long, the two biggest theater chains in the U.S. are taking drastic measures to stay afloat. AMC Theaters and Regal Cinemas have both taken action to ensure that they’ll stick around for at least a few more months. But whether that will be enough is yet to be seen.

AMC Theaters Keeps Bankruptcy at Bay

AMC Theaters is the world’s largest cinema chain, but it has been on the precipice of bankruptcy even before the pandemic took a wrecking ball to its finances. But the company has managed to raise $917 million in new equity and debt capital, AMC Theaters said on Monday (via Variety), calling it enough cash to “make it through this dark, coronavirus-impacted winter, adding that its “financial runway has been extended deep into 2021.”

In addition, the company has executed commitment letters for $411 million of incremental debt capital in place through mid-2023, unless repaid before then, by upsizing and refinancing its European revolving credit facility.

But despite this temporary stop-gap measure, AMC CEO Adam Aron is more hopeful than ever that the theater chain can bounce back, especially with ongoing dialogues with theater landlords and the vaccination rollout. Aron said in a statement:

“Today, the sun is shining on AMC. After securing more than $1 billion of cash between April and November of 2020, through equity and debt raises along with a modest amount of asset sales, we are proud to announce today that over the past six weeks AMC has raised an additional $917 million capital infusion to bolster and solidify our liquidity and financial position. This means that any talk of an imminent bankruptcy for AMC is completely off the table.”

Regal Cinemas Joins the Club on Release Window Deals

Meanwhile Regal Cinemas, the No. 2 chain in North America, is joining AMC and other theater chains like Cinemark Holdings and Cineplex in arranging deals with Hollywood studios to shorten theatrical release windows. In a New York Times report, it was revealed that Regal is “now in talks with Universal for a similar arrangement.”

This is a major change of heart for Mooky Greidinger, the owner of Regal Cinemas, who at the time of Aron’s AMC deal with Universal, criticized it as “the wrong move at the wrong time,” arguing that people will be reluctant to buy tickets if they can see the same film in their living room just a few weeks later.

But AMC has seemingly taken things a step further, per the report, conceding to Warner Bos.’ day-and-date release of the upcoming Denzel Washington-starring The Little Things, with the chain playing movies with no exclusive theatrical window. With Regal joining the club on this kind of deal, it’s likely that the theatrical release window will be forever changed from now on, even post-pandemic.

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