(CBS News)– Theater chain AMC Entertainment is warning that it could run out of cash by year-end, as the coronavirus pandemic continues to slam the cinema business.
Although AMC has reopened most of its theaters, they are operating at reduced capacity to permit social distancing. The Leawood, Kansas-based company said in a government filing on Tuesday that it has seen an 85% drop in attendance since reopening.
According to AMC, 494 of its 598 theaters are open. But locations in California, Maryland, New York, North Carolina and Washington, which would normally generate a quarter of the company’s annual revenue, remain closed.
“There is a significant risk that these potential sources of liquidity will not be realized,” the company said.
AMC hopes to reduce financial losses by raising cash and cost-cutting measures. For example, AMC is seeking to renegotiate building rents with landlords and considering taking out a loan. Over the last 12 months ending in June, the company reported a net loss of $2.8 billion on revenue of $3.7 billion.
Other theater chains are also sputtering. Cineworld Group, which owns Regal cinemas, said earlier this month it is temporarily closing its 536 locations, affecting 40,000 workers.
Texas-based Cinemark is keeping its 332 locations open, although the company reported a $170 million net loss in its most recent quarter.
Overall, movie theater companies saw their revenue plummet by more than 75% this spring and summer, according to data from the Motion Picture Association, Directors Guild of America and National Association of Theatre Owners.
Many small and midsize theaters will have to file for bankruptcy unless they receive federal aid, the groups said in a September letter sent to Congress. The groups told lawmakers that the “movie theaters are in dire straits” and asked to tap unused funding from the Coronavirus Aid, Relief, and Economic Security Act.
“Cinemas are an essential industry that represent the best that American talent and creativity have to offer, but now we fear for their future,” the groups said.
Aside from a drop in attendance, AMC and others blame their woes on this year’s most anticipated movies being delayed or released outside of theaters.
The live-action version of Disney’s “Mulan,” horror film “Antebellum” and mystery movie “The Invisible Man” were all set for theater releases but eventually released on streaming services such as Disney+ or Apple TV. Meanwhile, release dates for Marvel Studio’s “Black Widow,” and the latest James Bond film,”No Time To Die,” have all been pushed to 2021.