EXCLUSIVE, Updated: AMC Theatres has issued a statement in regards to the news today that it has furloughed 600 employees at its headquarter in Leawood, KS, including CEO Adam Aron.
Essentially, if the biggest chain is going to make a comeback and be available to its employees when this 2 1/2-month planned closure ends, it has to take drastic measures in the short term “to preserve cash and to ensure that AMC can reopen our doors once this health crisis has dissipated.” Zero revenue and “substantial fixed costs” remain the financial burden, like it is for all exhibitors around the world.
AMC said the furlough plan calls for reduced hours at reduced pay with all the furloughed corporate AMC associates retaining active employment status with the chain, including health benefits.
Here’s AMC’s statement from today:
Last week, AMC announced that because of the coronavirus outbreak we were closing all of our more than 600 U.S. theatres, which means that all 1000 AMC and Odeon theatres around the world are now closed, and will be closed for the immediate future.
This leaves AMC with no revenue, and substantial fixed costs that continue. At this time, AMC is not terminating any of its corporate employees, however, we were forced under the circumstances to implement a furlough plan, which is absolutely necessary to preserve cash and to ensure that AMC can reopen our doors once this health crisis has dissipated.
The furlough plan calls for reduced working hours at reduced pay, or no working hours at no pay, for the hopefully short period of time when AMC’s theatres are all closed. This action impacts every corporate AMC employee, including all those at the highest executive levels and including AMC’s chief executive officer.
All the furloughed corporate AMC associates will retain their active employment status with AMC, including all health benefits.
As we all know, these are unprecedented times. AMC is doing everything possible to ensure that we can welcome back both our associates and our guests as our theatres reopen.
PREVIOUS EXCLUSIVE, 11:42 AM: Ideal Newspaper hears that the biggest exhibitor in the world, AMC Theatres, has furloughed 600 employees in its Leawood, KS, home office.
Health insurance will remain intact for all of them, but for those not receiving any cushion, they’ll have to figure out a way to pay for their policies during the time that the chain is dormant.
The breakdown for furlough compensation is as follows from what I gather: Employees who work four days a week will receive 80% of their salary, two-days-a-week employees get 40% of their salary and zero days per week receive zero salary.
The chain announced on March 16, that they’re closing their 630 U.S. chain for six to 12 weeks. At the latest, should the chain stick to that plan, AMC would be at full power on Friday, June 5, that is if the coronavirus calms down.
At the time of the chain’s announced closing, AMC boss Adam Aron said, “We are ever so disappointed for our moviegoing guests and for our employee teams that the new CDC guidelines that Americans should not gather in groups larger than 10 people make it impossible to open our theatres. Still, the health and wellbeing of AMC guests and employees, and of all Americans, takes precedence above all else. We will continue to monitor this situation very closely and look forward to the day we can again delight moviegoers nationwide by reopening AMC movie theatres in accordance with guidance from the CDC and local health authorities.”
Prior to today’s news, AMC Entertainment had furloughed 26,000 of its 27,000 employees, largely cinemas staffs. In a CNBC interview last Thursday, Aron said: “We’re paying them as much as we can possibly afford to pay them. For those in the health plan, we’re keeping them in the health plan with their benefits active for the full time that we’re shut. But my focus is as much making sure there’s a company for them to come back to…I’d like to make sure that this company, which has been strong for 100 years, stays strong.”
It has yet to become apparent how the $2 trillion stimulus package will serve the bigger circuits. Details I understand are forthcoming, though NATO Boss John Fithian remains confident that exhibition will be deemed a distressed business by the U.S. Treasury.
Many major studios have either undated or pushed their big releases even deeper into the calendar, i.e. yesterday, Warner Bros. pushed Wonder Woman 1984, which was set to launch the summer on June 5 after Black Widow was undated, to the new date of Aug. 14. President Donald Trump has expressed how he’d like to re-open the U.S. economy by Easter weekend, April 10-12, but the question remains whether local and state ordinances, such as New York which counts the most COVID-19 cases at 30,8K, and is a box office capital, would be willing to go along with that plan.
And if theaters do re-open, is it at 50% capacity levels and staggered seating? Which distributors will be fearless about dipping their toes with new product on the marquee first? Because all these holdover titles from winter, i.e. Bloodshot, Bad Boys for Life, Invisible Man, etc will have already been available in homes. Currently, should exhibitors opt to return over Easter weekend, they’ll have the option to book Universal/Dreamworks Animation’s Trolls World Tour, which will also be available on-demand in homes as a 48-hour rental. The next big pic dated is STX’s My Spy, on April 17, which has already made around $300K in Canada. Other event pics that remain on their dates are Paramount’s Spongebob Movie: Sponge on the Run over Memorial Day weekend, May 22, and Disney’s Artemis Fowl on May 29.
Wall Street Entertainment analyst Eric Handler in a note yesterday said that after a close look at exhibitor’s balance sheets, AMC Entertainment appeared pretty strapped, with only about four months of liquidity plus lines of credit. He also mentioned that the chain has a total of about $600M and runs through it at the rate of about $155M a month. AMC at the time of this post was trading at $3.50, -1.7%. The dilemma again for all these movie theaters is that they have zero revenue coming in, and fixed costs.
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