Nearly every business and corner of the economy has been affected by the global pandemic in some way. However, businesses that are built around bringing groups of people together are the ones hit the hardest as they had to completely shut down. This includes theme parks, and also movie theaters. Exactly how much damage will be done to these business is unclear, but North America's largest movie theater chain, AMC, has posted a loss of $2.4 billion as a result of its theaters being closed.
Certainly, in absolute dollars, that's no small amount of money, and even for a company like AMC, it's concerning. According to THR, AMC is admitting that its ability to "continue as a going concern" is in doubt under these circumstances. Translation: The largest theater chain in America could go out of business.
AMC going out of business would have massive repercussions both big and small. For starters, it would put all the employees at the 380 locations out of work. It would also have a major impact on the moviegoing options for a lot of fans. And while AMC is the largest theater chain in the U.S. it's far from the only one, we can expect that the likes of Regal and Cinemark are in similar financial situations. Billions have been lost by just this one industry.
While the numbers are dire, they're not necessarily a shock. AMC Theaters had previously said that the company had enough credit to make it through November, but if the current situation lasted beyond that, restructuring would be necessary.
Right now, all signs point to theaters beginning to reopen in July, but that won't necessarily save the situation. Odds are that theaters, like theme parks and other locations reopening to crowds, will have to open to limited capacity in order to allow for social distancing, so even when ticket sales recommence, they'll be a fraction of what they were before the closure, even assuming crowds are willing to come back. By November it's possible that things will be back to normal, but right now it's impossible to know how likely that is.
There's also the fact that AMC won't be offering all major film releases when they reopen. Following the decision of Universal to release Trolls World Tour at home rather than in theaters, and then to double down by saying that early On-Demand releases would become a regular part of the studio's offerings, AMC has said they will no longer screen Universal films in its theaters. While such a decision will certainly hurt Universal's bottom line as well, it will also impact the theaters.
We could very well see the landscape of movie exhibition change drastically when this is all said and done. Even if no major theaters go out of business entirely, many locations may need to close for the larger company to survive financially.