The shutdown of movie theaters world-wide due to the coronavirus pandemic has put cinema owners at heightened risk of default if they are unable to reopen in several months or secure a financial lifeline, the WSJ Pro Bankruptcy reported. Securities linked to AMC Entertainment Holdings Inc., the global market leader with over 1,000 cinemas, have tumbled in value to distressed levels after the company temporarily closed all of its theaters. Independent cinema owners are also staring down looming payments to creditors and landlords. “It means that for big companies and small, they’re all going to face a substantial liquidity crunch in the next three months,” said John Fithian, the president of the National Association of Theatre Owners, the cinema industry’s main lobbying group. The movie theater business last year generated roughly $52 billion in global revenues, including sales of tickets, food and beverages, about $15 billion of which was in the U.S, Fithian said. The rise in Covid-19 cases nationally has choked off revenues to the theater industry as more cities and states follow the example of New York City in closing movie theaters to contain the spread of the novel coronavirus. “We went from those kinds of revenues to zero overnight,” he said. “And we still have substantial fixed costs.”
