S&P Global Ratings to cut its rating for AMC Entertainment this week. Richard Levine / Demotix / Corbis
S&P Global Ratings to cut its rating for AMC Entertainment this week. Richard Levine / Demotix / Corbis
S&P Global Ratings to cut its rating for AMC Entertainment this week. Richard Levine / Demotix / Corbis
S&P Global Ratings to cut its rating for AMC Entertainment this week. Richard Levine / Demotix / Corbis

Movie theatre chains struggle as pandemic keeps fans away from the big screen


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At the start of the pandemic, movie-theater operators thought life would begin to look normal again by now. Instead, many are facing a second reckoning.

More bad news came Friday, when Bloomberg News reported that Metro-Goldwyn-Mayer cancelled the November debut of the new James Bond movie, “No Time to Die,” one of the few big films left on the 2020 calendar. The picture is now scheduled for April 2021, a year after its original premiere date.

“Absent a miracle, the box office will regress in the coming weeks,” said Shawn Robbins, chief analyst at BoxOffice Media. “Cinemas and audiences are presently at the mercy of natural and political forces largely beyond their control.”

The grim reality for theaters prompted S&P Global Ratings to cut its rating for AMC Entertainment Holdings this week, saying that a default may be looming.

With no new big films to show, smaller exhibitors are cutting hours to reduce costs. In the final weekend of September, the number of theaters operating in North America fell by about 100, according to researcher Comscore. The total could rebound this weekend with AMC, the largest operator, saying it expects to be 80 per cent reopened by mid-month.

But with few fans willing to go to the theatres, Hollywood studios are unwilling to release their big 2020 films. Before MGM’s decision, numerous other major pictures – including Walt Disney’s “Black Widow” – had been pushed back, leaving cinemas in an awkward place: allowed to operate, but with nothing to show.

The performance of “Tenet”, the only major summer-movie release, underscores the dilemma. Released September 3 in the US, the $200 million production has been No. 1 at the box office for four straight weeks, yet has generated just a little over $40m in domestic ticket sales. Fear of catching Covid-19, social-distancing rules, and a continued shutdown in New York and Los Angeles are all keeping fans away.

The drought caught theatre operators by surprise. Chief executives from the largest companies, including AMC, touted their improving prospects with the imminent release of “Tenet” and other big features. Then Disney made the surprise announcement that it would debut the live-action remake of “Mulan” on its streaming service Disney+ for $30.

“They have a huge slate coming for the balance of 2020,” AMC chief executive Adam Aron said of Disney on an August conference call. “We will benefit mightily from Disney titles in 2020 with or without ‘Mulan.’”

They have a huge slate coming for the balance of 2020

But the dearth of new films has left theatres struggling to cover the cost of being open – some are cutting hours and closing their doors once again. More than two-thirds of smaller US theatres are at risk of bankruptcy or closure, an industry trade group said last month.

The 2020 calendar still has a few big films on tap. Disney will release the animated feature “Soul” on November 20, and Comcast’s Universal Pictures plans to release “The Croods: A New Age,” a few days later. AT&T’s Warner Bros. has two big December releases: “Dune” and “Wonder Woman 1984”.

But those dates could slip if consumers remain frozen by fears of Covid-19 or if theatre reopening plans get set back. And even with their auditoriums open, exhibitors will continue to lose money if too many seats go unsold. S&P warned that AMC’s losses could accelerate now that it’s open again.

“Given our expectations for a high rate of cash burn, we believe the company will run out of liquidity within the next six months unless it is able to raise additional capital, which we view as unlikely, or attendance levels materially improve,” S&P said.

COMPANY PROFILE
Name: ARDH Collective
Based: Dubai
Founders: Alhaan Ahmed, Alyina Ahmed and Maximo Tettamanzi
Sector: Sustainability
Total funding: Self funded
Number of employees: 4
Living in...

This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.

Also on December 7 to 9, the third edition of the Gulf Car Festival (www.gulfcarfestival.com) will take over Dubai Festival City Mall, a new venue for the event. Last year's festival brought together about 900 cars worth more than Dh300 million from across the Emirates and wider Gulf region – and that first figure is set to swell by several hundred this time around, with between 1,000 and 1,200 cars expected. The first day is themed around American muscle; the second centres on supercars, exotics, European cars and classics; and the final day will major in JDM (Japanese domestic market) cars, tuned vehicles and trucks. Individuals and car clubs can register their vehicles, although the festival isn’t all static displays, with stunt drifting, a rev battle, car pulls and a burnout competition.

Pots for the Asian Qualifiers

Pot 1: Iran, Japan, South Korea, Australia, Qatar, United Arab Emirates, Saudi Arabia, China
Pot 2: Iraq, Uzbekistan, Syria, Oman, Lebanon, Kyrgyz Republic, Vietnam, Jordan
Pot 3: Palestine, India, Bahrain, Thailand, Tajikistan, North Korea, Chinese Taipei, Philippines
Pot 4: Turkmenistan, Myanmar, Hong Kong, Yemen, Afghanistan, Maldives, Kuwait, Malaysia
Pot 5: Indonesia, Singapore, Nepal, Cambodia, Bangladesh, Mongolia, Guam, Macau/Sri Lanka

LA LIGA FIXTURES

Friday (UAE kick-off times)

Levante v Real Mallorca (12am)

Leganes v Barcelona (4pm)

Real Betis v Valencia (7pm)

Granada v Atletico Madrid (9.30pm)

Sunday

Real Madrid v Real Sociedad (12am)

Espanyol v Getafe (3pm)

Osasuna v Athletic Bilbao (5pm)

Eibar v Alaves (7pm)

Villarreal v Celta Vigo (9.30pm)

Monday

Real Valladolid v Sevilla (12am)

 

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PROFILE OF HALAN

Started: November 2017

Founders: Mounir Nakhla, Ahmed Mohsen and Mohamed Aboulnaga

Based: Cairo, Egypt

Sector: transport and logistics

Size: 150 employees

Investment: approximately $8 million

Investors include: Singapore’s Battery Road Digital Holdings, Egypt’s Algebra Ventures, Uber co-founder and former CTO Oscar Salazar

THE SPECS

      

 

Engine: 1.5-litre

 

Transmission: 6-speed automatic

 

Power: 110 horsepower 

 

Torque: 147Nm 

 

Price: From Dh59,700 

 

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