AMC Entertainment chairman & CEO Adam Aron dismissed the notion that the largest exhibitor in the world will file for bankruptcy in a CinemaCon panel on Wednesday.
Amid ongoing speculation over the company’s debt load and financial prospects, Aron told ’An Industry Think Tank: 2024’ session in Palace Ballroom in Caesars Palace that he did not see a restructure on the horizon.
“Nobody got dealt a harder hand to play than AMC in Covid,” the CEO said. “For four years we’ve avoided bankruptcy and will continue to do so…. The bad side of bankruptcy is a lot of people get hurt. I have a fiduciary obligation to do what I can to prevent [shareholders and employees] from getting hurt.”
Aron began by saying the industry’s basic business model has been broken since the pandemic, which caused annual box office to plummet from $11bn in 2019 to $2bn in 2020.
He did not elaborate on the point – despite a rise in box office in subsequent years to reach just over $9bn in 2023 – and went on to say that last year’s Hollywood strikes “have assured us of another very tough year in 2024”.
Yet the executive then predicted theatre-going would perk up in 2025 and beyond, and suggested a way forward to recovery. “One thing that could happen is Hollywood makes more movies; lower splits; theatre landlords taking lower rent.”
Aron noted there were 84 wide releases on more than 3,000 screens in 2019 and there are expected to be 64 this year. More than 64 in 2024 would be “gravy”, he said.
Asked by moderator Matt Belloni, Puck News founding partner and host of podcast The Town, if he would consider closing down underperforming theatres, the AMC head said he had closed 169 out of a fleet of 1,000 and opened 60 in the last four years.
“The 60 new ones grossed triple what the 169 grossed,” said Aron. “The 60 we opened are $100m more profitable than the 169 we closed. I do think theatres are going to close and it’s a natural pruning of the tree.”
Responding to Belloni’s remark that the United States is over-screened – there are around 38,000 in operation – Aron said, “The two most profitable years in our 100-year history were ‘18 and ‘19. So we weren’t overscreened then. The real question is does this industry stay institutionalised at $9bn like it did last year, or will the box office grow again. As I look to ‘25 and ‘26 I think box office is going to grow a lot.”
Cathleen Taff, Disney’s president, distribution, franchise and audience insights, interjected: “Don’t rule 2024 out [starting on] May 10 with Apes [20th Century Studio’s Kingdom Of The Planet Of The Apes].”
Taff said Disney was “super-committed” to the exclusive theatrical window and relied on exhibition partners to launch its films. “When we get it right,” she said, “it ripples through our company; it drives brand affinity, consumer product sales, park rides, and engagement on our streaming service.”
Touting a slate of tentpoles like Pixar’s Inside Out 2, 20th Century Studios’ Alien: Romulus, and Disney’s Mufasa: The Lion King, Taff added, “We feel like we’re back.”
And in a jokey-not-so-jokey dig at Universal, which dethroned Disney in 2023 to rule the studio rankings, she said: “We had four of the top 15 films last year; number one studio in seven out of last eight years. Kudos to you [Universal], but we’re coming after you.”
Belloni also asked if the annual North American box office would settle on $8bn or $10bn, AMC’s Aron said: “I’m pretty sure that box office will be a lot closer to $10bn going forward than it will be to $8bn… Domestic box office was over $10bn 11 years in a row, and over $11bn five years in a row.”
Academy CEO Bill Kramer was asked if changes to the Academy’s eligibility rules will encourage theatre-going. It has mandated that starting this season best picture contenders must receive an expanded theatrical run of seven days in 10 of the top 50 markets within 45 days of the initial release. Releases in international markets can count towards two of the markets.
“It’s good for the industry, exhibitors, the art form, and it’s good for the Oscars,” Kramer said. “Could we do more? Perhaps, but this is a step in the right direction, it sends a signal.”
On the subject of the disappearing “box office bump” whereby Oscar nominations and wins trigger a surge in a film’s earning power, Kramer said, “Who knows, but I hope it can come back.”
No comments yet