By Joshua Huff, sports editor
BIRMINGHAM — AMC Entertainment, which has five locations around the Birmingham area, announced on Wednesday that the country’s largest movie chain is on the brink of bankruptcy and expressed doubt that it can survive the coronavirus outbreak shutdown.
The company acknowledged that it has operated with no income over the past couple of months. The coronavirus pandemic has forced the company to close all of its more than 1,000 theaters across the country and lay off or furlough 600 corporate employees.
“We are generating effectively no revenue,” AMC Entertainment said in a regulatory filing Wednesday.
The company claims that it lost between $2.1 billion and $2.4 billion in the first quarter, and its revenue dipped to $941.5 million, which was down roughly 22%. That compares to a revenue of $1.2 billion in the same quarter in 2019.
Even when theaters do reopen, the company expects customers to remain hesitant to return. More so, the company is worried that studios will hold off on releasing new films into theaters after the success of recent digital releases.
“Even if governmental operating restrictions are lifted in certain jurisdictions, distributors may delay the release of new films until such time that operating restrictions are eased more broadly domestically and internationally, which may further limit our operations,” the company said.
AMC has had a public dispute with Universal over its decision to release “Trolls World Tour” in theaters and on-demand on the same day. NBCUniversal CEO Jeff Shell suggested the studio could start to do more simultaneous releases, even after theaters reopen. That statement led AMC to say it would no longer showcase Universal films in its theaters.
As a result of the complexity of issues surrounding the safety of movie theaters and the long-term viability of its business model, AMC writes that “…substantial doubt exists about our ability to continue as a going concern for a reasonable period of time.”
Despite the announcement, AMC’s stock was trading higher Wednesday, recently up nearly 5%, likely the result of the company restructuring its debt, Wedbush analyst Michael Pachter said.