The pandemic that began almost 12 months ago has caused huge financial difficulties to industries across the globe. The cinema industry has been hit heavily in particular as they struggle to survive amidst delayed film releases, enforced closures and hugely reduced audience numbers. This includes Odeon cinemas and their owners, AMC.
The biggest reason causing a struggle to operators has been the death of the domestic market in the US. This is due to key territories such as NY/LA being closed for most of the year and the pandemic still tearing through Europe,
Studios have pushed back huge titles which we’ve been breaking the news on throughout the past year (No Time To Die/Black Widow/Wonder Woman 1984).
Cineworld is closing its sites
Cineworld PLC made the decision in September to close its portfolio across the globe along with losing a lot of its staff as a result. The second-largest cinema operator in the world, Cineworld is also facing difficulty but seem safe for now after a $400m debt deal.
However, AMC Theatres (the owners of Odeon Cinemas) have continued to face a similar challenge. In October the company warned the stock market of potential bankruptcy as the pandemic tore throughout the world.
As figures from Screen Daily have shown box office in the UK dropped by 76% in 2020, in North America 80%. AMC Theatres is the largest cinema chain in the world, with over 2866 screens in Europe, and 7967 in the USA.
There’s a cash flow crisis for Odeon and AMC cinemas
AMC is in desperate need of cash, especially given the fact that they are facing a cashflow crisis and further restrictions as the vaccine rollout continues. AMC has begun offering up the Odeon chain in the UK as collateral.
This offer has been made to various hedge funds and financiers to avoid bankruptcy. Since October, Odeon has been engaged within redundancies to cinema management. In a bid to reduce staffing costs despite the UK’s furlough scheme extensions.
AMC are $550 million short
CNBC reports the parent company AMC Theatres has raised only $200m of the $750m it needs to survive. It’s stock this week fell to a record low of $1.98 per share.
Similar to how we explored The Rise and Fall of Cineworld AMC has some for the same problems that the pandemic has exasperated. That said, at this stage, it doesn’t look likely the company will disappear.
But there will have to be severe changes in its management and operations going forward. As Small Screen has shown 2021 has the potential to be huge for cinemas and box office alike if the vaccines are successful.
But whether this means sites will be sold is unclear. Perhaps Odeon is sold outright to another company, or the ownership could change hands to guarantee this funding is an option.
Billions In Debt
Within the two biggest Cinema companies in the world there is a huge amount of debt, in the billions. When most don’t own any of the buildings they are in, and rent most sites, how will they pay this debt back? What will happen with AMC Theatres and specifically it’s Odeon subsidiary?
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