Cash-Strapped Cinema Chains On The Brink Of Financial Collapse
The coronavirus pandemic has been financially ruinous for movie theaters, and now major U.S. operators are saying they are almost out of cash and on the brink of bankruptcy.
B&B Theatres says it will be forced to file for bankruptcy within months, while AMC Theatres could be out of cash by the end of the year. Both announcements follow news last week that Regal Cinemas owner Cineworld Group will temporarily close all its operations in the United Kingdom and the U.S. after few studio movies appeared for fall and winter runs and ongoing closures hit major markets like New York City.
At B&B, which is the sixth-largest cinema operator in the U.S. with 48 locations, the owners are saying months of closures means they have not been able to pay rent, and the need to fix unused projection equipment has put them hundreds of thousands of dollars in the hole.
Brock Bagby, an executive vice president at the company whose family has owned the firm for four generations, told CNBC the delay in blockbuster releases means B&B is now months from filing for bankruptcy protection, and that it is trying to seek financial help from the government.
“We didn’t shut ourselves down. And that’s the thing that’s so hard, and I keep telling my Dad, ‘You didn’t do anything wrong. This is not your fault,’" he said. "But it doesn’t help. It’s still devastating.”
Shares in AMC Theatres were trading at $3.80 early Tuesday, down 6.9%, according to The Hollywood Reporter. The theater giant says its supply of cash will be “largely depleted” by the end of this year or early next if the current environment continues, adding that it will need other “sources of liquidity or increases in attendance levels” in order to meet its obligations.
AMC says it will consider looking for more debt and equity financing or further negotiations with landlords over leases.