Two billion here, five-hundred million there – it adds up…
The financial toll the coronavirus is taking on Kansas City’s AMC Theatres is staggering, but the company may be beginning to see some light at a seemingly never-ending, gloomy tunnel that is the year 2020.
That after a $2 billion-plus first quarter earnings hit and another $500 million in the company’s recently announced second quarter earnings.
Why even bother to call them earnings?
All of that said, let’s take a gander at what passes for good news these days at the country’s largest operator of movie theaters.
For starters, AMC kissed and made up with Universal, settling a short lived boycott of Universal after it went straight to premium video on demand (PVOD) this past spring with its Trolls World Tour movie.
Universal pocketed more than $77 million on PVOD (keeping 80 percent of the revenue versus the 50 percent they get from theaters) and said it planned to continue bypassing theaters.
That was then…the latest?
Cinemark and Regal joined the boycott, but going forward AMC negotiated a 17 day/three weekend exclusive with a share in Universal’s premium video on demand revenue.
Leaving Cinemark and Regal to grumble and fend for themselves.
In addition to that arguably good news – because now gone are the days of three month waits for home viewing – AMC negotiated rent deals for many of its theaters that in all likelihood will continue past the coronavirus shutdowns.
You may recall, that’s what KCC movie maven Jack Poessiger has been predicting…that AMC would use the pandemic to get out of bad lease deals for less profitable plexes.
So will the movie biz as we have known it ever be the same?
“That’s a helluva question,” Poessiger says. “The easy answer is, no…There are no guarantees.”
(For more Hearne, go to kcconfidential.com)