AMC is head­ing for bank­rupt­cy, but that may not spell the end

Amidst the assort­ment of pan­ic-induc­ing sur­pris­es held by each new day in these hec­tic times of coro­n­avirus, Vari­ety con­tributed to the over­all impres­sion that the world is crum­bling with a stop-in-your-tracks head­line yes­ter­day: ​“AMC The­atres Bank­rupt­cy Like­ly, Ana­lysts Say.” For those UK read­ers unfa­mil­iar with the brand, the AMC chain runs the major­i­ty of mul­ti­plex­es in Amer­i­ca with near­ly 700 brick-and-mor­tar movie hous­es through­out the States, though any­one with a good sense of con­text clues can intu­it that this spells bad news.

The arti­cle lays out the dis­mal finances of the cor­po­ra­tion, which has ground to a zero-prof­it stand­still as the pan­dem­ic threat shuts down movie the­aters world­wide. With a burn rate of $155 mil­lion per month – all those cen­tral­ly-locat­ed rents can’t be cheap – the arti­cle pre­dicts that they’ll exhaust their cash and cred­it by June or July, at which point bank­rupt­cy will be the only option.

But declar­ing bank­rupt­cy does not nec­es­sar­i­ly spell the end, nor an auto­mat­ic reset. ​“Reor­ga­ni­za­tion,” a sin­is­ter bit of cor­po­rate jar­gon, will be the name of the game; a wave of new tem­po­rary loans would the­o­ret­i­cal­ly keep the busi­ness alive until it can start gen­er­at­ing mon­ey again, pos­si­bly with a hand­ful of the­aters shut down to low­er their over­head spend­ing. The like­li­hood of AMC going ful­ly kaput remains slim, though in that event, the spaces would most like­ly get bought by their pri­ma­ry com­peti­tor Regal as their own­er in the UK Cineworld angles to consolidate.

To the aver­age con­sumer, all this behind-the-scenes indus­try talk might not mean much, but its rever­ber­a­tions will undoubt­ed­ly be felt in the months and years to come. It won’t be the night­mare sce­nario of a nation strewn with defunct cin­e­mas as stream­ing final­ly gets exhi­bi­tion in a stran­gle­hold, but con­di­tions will get harsh­er and less hospitable.

Even before the econ­o­my went into a nose­dive, AMC was oper­at­ing with an indus­try-high debt of $4.75 bil­lion USD, and they’ll have to con­tin­ue everyone’s least favorite trends to sur­vive: ris­ing costs for tick­ets and con­ces­sions, more screens devot­ed to guar­an­teed mon­ey­mak­ers, more con­ver­sions to pre­mi­um-price spe­cial­ty auditoriums.

In times of great cri­sis like this, it’s dif­fi­cult yet vital to cal­i­brate our pes­simism as we aim to pre­pare for the worst with­out slip­ping into pan­ic-mon­ger­ing. Things will get bet­ter, this much is for sure – the film medi­um won’t go down with­out a fight. But the path to its return keeps get­ting longer and more ardu­ous. The time­line for the economy’s recov­ery stretch­es out far past the time­line for beat­ing back the virus, and that one’s still unclear. Lean times lie ahead.