Movie fans have slowly been returning to theaters after the Covid-19 pandemic has upturned their lives. Unfortunately, the financial devastation it has inflicted on some of the major theater-industry leaders remains quite severe. Cineworld Group PLC, the floundering owners of Regal Cinemas, abruptly halted its attempts to sell the entire group after failing to generate satisfactory offers and thus decided to hand over ownership to its lenders.
AMC Entertainment Holdings Inc., which once had a market capitalization of 31 billion dollars at its highest point, has now plummeted over 80% since July. This company is the world’s largest movie theater chain and runs almost all of its theaters in the United States, as well as over 1,000 in Europe. It owes over $5 billion in debt, including $1 billion in junk bonds that must be paid by the end of 2021. In order to avoid bankruptcy and struggling to keep afloat, the theater chain had to cut jobs, shut down several locations, acquire bailout loans and exchange current debt for new debt held by the lender.
As a result of all the financial troubles looming, AMC CEO Adam Aron is finding innovative ways to keep the business afloat. They have considered greatly reducing costs and are offering expansion of luxury seating to premium moviegoers.
In conclusion, the movie theater industry has been drastically impacted by the pandemic and it’s uncertain whether a long-term damages have been done, or if it is temporary. Business leaders such as Adam Aron are attempting to reduce costs and offer moviegoers more luxurious experiences in order to create a more profitable future. It could take many more months, if not years, to get back to a place of financial stability, in an industry that was already dwindling before Covid-19 stricken the world.
