AMC's CEO believes his movie theaters will survive through 2021
Posted January 25, 2021 2:56 p.m. EST
CNN — Adam Aron is in a surprisingly good mood for a CEO of a struggling theater chain that recently said it might not make it through the winter.
But the AMC Theatres CEO was jovial because his fortunes recently changed. The world's largest movie theater company announced Monday it had raised $917 million of new equity and debt capital since mid-December. That number would be enough to "make it through this dark coronavirus-impacted winter," the company said.
Following the news, Aron told CNN Business he believes the new funding — and more vaccinations on the horizon — will help AMC avoid financial catastrophe this winter and possibly for the rest of 2021 as well.
"This is a great day for AMC," Aron said.
Aron spoke with CNN Business about the state of the theater industry and why he believes that moviegoing will make a comeback, even as streaming has become the dominant way people enjoy their entertainment.
This interview has been edited and condensed.
AMC announced Monday that it raised $917 million of new capital since mid-December. What does that mean for AMC?
Everybody knows a lot of movie theaters in the world are closed. At those theaters that are open, visitation has been light — partially because of the pandemic and partially because major movie titles have been delayed. And AMC was losing a lot of money. As a result, we needed to raise the money that would give us liquidity to power through this dark coronavirus-impacted winter. And we just did that. We raised enough money that our financial runway has been lengthened deep into 2021.
What that means is that AMC as a company remains viable, that our theaters will be open for our guests.
How long can you stay viable? Are we talking through the summer? Through the rest of the year?
When you look at forecasting our cash needs going forward, it depends on what the levels of the attendance actually are. It depends on how much additional money we raised because we're not done yet. The $917 million figure was as of this weekend, but we're not done yet in raising capital for AMC.
My sense: We will have enough cash to make it all the way through all of 2021 based on a very detailed set of assumptions, which we've laid out in our various security filings with the SEC.
So you feel like this new investment can get you through the rest of the year without having to worry about bankruptcy?
That is my current view based on current assumptions and current thinking.
What happens to AMC if more movies get delayed and your theaters stay empty?
We've already assumed that moviegoing would be quite light in the first half of 2021, but it's also our assumption that moviegoing will pick up in the second half of 2021. There are a lot of movies that are going to be released this summer, this fall and next winter.
At the same time, as we all know, a major vaccination program is the underway in the United States and Europe, in the Middle East, where we have theaters. The combination of new movie titles and vaccination should be that the second half is a much stronger moviegoing environment than the first half.
Do you think this year is going to be better than last year?
Well, it's almost impossible to conceive that 2021 could be worse than 2020. Our theaters were shut for most of the year. So, yes, I think 2021 is going to be a stronger year than 2020 and 2022 is going to be a stronger year than 2021.
I remember last year that when movies were delayed everyone thought, 'hey, we'll be fine by the fall,' and that wasn't the case. The latest James Bond film, "No Time to Die," was delayed last week. Are you concerned?
There's a critical difference. Vaccination is at hand. Thanks to the miracle of modern medicine, vaccines have been developed for this Coronavirus. There is a broad-based vaccination program underway. The Biden administration in the United States has committed to a hundred million injections in a hundred days. We talked with the most knowledgeable public health officials constantly and what they're telling us is that the world and this country will start to get this virus in better shape tomorrow than it's been yesterday, but that's very encouraging news and that will change the reality of what we can expect in the near future.
Streaming has become a dominant form of how people get their entertainment, and personally, I haven't been to a movie since February. What makes you confident that people will even want to return to theaters?
So there was something developed about 70 years ago called television and people have TVs in their homes, and yet they've still been going to movie theaters in enormous numbers... People like going to the movies. People like going to theaters.
Yes, streaming is around. Yes, some people will watch movies on streaming services instead, but we're very confident that the appeal of cinemas are great. People enjoy the communal experience of laughing together, crying together, howling hard together. And people have written off movie theaters since the creation of radio and then television and then VCRs and then streaming.
AMC is a hundred years old this year. We believe our second century will be just as bright as our first.
It's New Year's Day 2022: How did the year go for AMC?
I know what I'd like to say on New Year's Day of 2022, and that is that we raised the money we needed to survive through the coronavirus pandemic and that moviegoing is back like normal.
That possibility has certainly been made more likely by the $917 million that we just raised. That is made more likely by a vaccination program that has already started widely in the United States and across the world.
But this pandemic has been one of uncharted waters and with incredible tosses and turns and no one knows for sure what will happen in 2021. We're all going to learn it together.