Few new movies, small crowds: Can AMC and B&B theaters survive?
At AMC Town Center in the Kansas City suburb of Leawood, Kan., the 20-screen complex has a few recent offerings: There’s a new comedy starring Robert DeNiro and Rob Riggle, Christopher Nolan’s “Tenet” and a thriller with Russell Crowe.
But it’s the oldies that tell the story of how the coronavirus pandemic has shaped the movie theater industry. The multiplex is showing classics like “The Shining,” “Hocus Pocus” and “Monsters, Inc.,” all more than a quarter-century past their initial theater debuts.
The lack of new releases has been a major impediment for movie theaters, which have been uniquely ravaged by the pandemic as consumers avoid close contact with crowds, particularly indoors. And for two of the country’s largest movie theater chains, it’s becoming increasingly
unclear how long they can survive the current climate.
Analysts say the nation’s largest theater chain, Leawood-based AMC Theatres, is nearing possible bankruptcy filing as it bleeds cash — a situation exacerbated by its financial position before the crisis.
Liberty, Mo.-based B&B Theatres, which operates 50 cinemas in seven states, has publicly acknowledged the possibility of a bankruptcy restructuring, but family members who run that privately held company say they’re
more bullish on their future, particularly if they receive federal aid proposed to help smaller theater companies.
“As an industry we’re sort of still limping along,” said Bobbie Bagby Ford, executive vice president and a part-owner of the nation’s sixth-largest movie theater chain. “However, every week continues to get better.”
AMC did not respond to The Star’s questions about its future. But its recent financial filings, which portend a possible bankruptcy, have made clear that the company is teetering on insolvency.
The crisis will reverberate beyond the entertainment industry: Any potential theater closures will further stress already-struggling malls and shopping centers that depend on chains like AMC as anchors.
Garrick Brown, vice president of retail intelligence at national commercial real estate firm Cushman & Wakefield, said the United States is home to about 7,800 movie theaters.
“In a best case scenario forecast, we are looking at losing a quarter of those. And that’s the best case,” he said. “Things are going to get a lot worse before they get better.”
AMC’s race against the clock
AMC’s enemy is time. In a filing with the SEC, the company estimated that it had $417.9 million cash on hand.
The company announced in the same filing it would sell shares to raise about $50 million to muster up more liquidity.
But $50 million may not go far in shoring up AMC’s liquidity crisis, given how much cash the company is burning every month. AMC said in its filing that “it is very difficult to estimate our liquidity requirements and future cash burn rates.”
AMC has acknowledged it may run out of cash by the end of the year if conditions do not improve.
Making matters worse is that customers will likely remain wary of a quick return to theaters in large numbers, even once the United States shows substantial improvement in its handling of the coronavirus pandemic.
AMC began reopening its theaters in late summer. The company said more than 520 of its 600 U.S. theaters were open as of mid-October.
B&B was prepared for tough times
Babgy Ford, a fourth-generation member of the family behind B&B Theatres, said many consumers are ready to go back to the movies. B&B has implemented a slew of safety measures.
“We just need some fresh content,” she said.
Like other chains, B& B has had to get creative to keep money coming in. It’s showing classics like “The Nightmare Before Christmas” and 1978’ s “Halloween.” Its Independence drivein theater saw big crowds over the summer months and the company is renting out individual theaters to smaller groups.
B&B, named for the Bills and Bagby families, employs about 2,100 people at 45 locations. The chain is not breaking even, but is losing less money keeping its doors open than if it were to close, Bagby Ford said.
No one ever expected this kind of downturn, but she said the company has relied on savings and cost-cutting measures to get through the pandemic. And so far, banks, vendors and landlords have been flexible and helpful.