AMC Entertainment this week announced a surprisingly robust plan of action and the re-opening of its theatres globally by July. On the heels of agonizing-but hardly unexpected-first-quarter results, it’s been enough to re-inject some much-needed life into their share price. Among the lineup proposed to see the theater through to the end of the year, however, there’s one notable absence-anything by Universal Studios. That ‘oversight’ was hardly a surprise to BLAKE & WANG P.A’s very own Brandon Blake, as an entertainment attorney. Los Angeles has been buzzing with news of their dispute for a while now-and here’s the key takeaways you should know.
AMC’s Q1 earnings released
To take a moment to look at the bigger picture, one of the key announcements this week was the overall state of AMC Entertainment’s Q1 earnings. It will come as no surprise to anyone that the COVID-induced theater closures had a profound negative impact on their earnings, leaving the company in a startling debt hole.
Nevertheless, they also came out the gate swinging. News of a drastic reshaping of rental terms, an extensive health and safety policy shaped by Harvard Public Health minds, the rollout of theater openings from July, and plans to ‘jumpstart’ the public into returning to theaters have had a positive effect on AMC shares that hasn’t been seen since their Moody’s/S&P down grade.
The Universal/AMC spat has nothing to do with this, of course. Yet it still managed to slip into the earnings release. Buried deep on page 3, we find the statement, “While we are inactive dialogue with Universal, no movies made by Universal Studios are currently on our docket.”
The context behind the spat
This addition to the quarterly report comes just over a month after a public note from AMCCEO and President, Adam Aron, to Universal Studios Chairman Donna Langley. The note was, in effect, a public ban of all of the studio’s future titles.
What could bring on that degree of ire amidst already trying times? The PVOD release of DreamWorks Animation’s Trolls World Tour. It seems a little surreal that a children’s movie could cause such backlash, but with Corona forcing everyone to reevaluate their business models, maybe it shouldn’t be so surprising. Any entertainment attorney Los Angeles trust scan tell you any loss of income at all right now is too much for comfort.
The PVOD release has, to date, netted Universal $100M, as well as AMC’s ire. While the studio has made statements to the Wall Street Journal that it will also use a day-and-date theatrical VOD once theatres reopen, one can, however, ask if they expect anyone to go and see it. Would it not be more comfortably seen in your own home, safely distant from possible disease vectors? Realistically, it’s a Universal success that will hurt AMC greatly, at a time they can least afford it.
In conclusion
While AMC may well have just cause to be angry at Universal, it also has bigger concerns right now. Warner Bros are keen to grab up any available screen for the projected July 17threlease of Tenet, yet it’s not entirely certain the film will make that release date with the shifting state of global health and international restrictions. Likewise, Disney continues to claim July 24th for the release of Mulan, yet has made no efforts to call back furloughed distribution staff for the film. AMC also has the considerable logistics of their own theatre reopening to manage, set to begin rolling out in mere weeks.
Universal, meanwhile, has the Costner-Lane crime drama Let Him Go as the first slated theatre release for the year, all going well. With August 21st as the date, AMC has plenty of time to sort out its issues with the studio. Kajillionaire and Candyman in September, and the sci-fi movie Bios in October, look fit to flesh out the remaining Universal lineup.
So while the first ‘ban’ was certainly called in a temper, it does seem that AMC is making moves to mitigate the knock-on effects from hurting their current public image. Do they really have the room to bluff and bargain that they think they do, with dismal earnings and a desperate need to get any-and-all visitors into theaters worldwide once they reopen? That, only time will tell.
Are you looking for entertainment news and advice you can trust? As one of the best entertainment lawyers in Los Angeles, BLAKE & WANG P.A’s Brandon Blake has the industry insight you need to help you navigate the muddy post-Corona waters of the entertainment industry, so don’t hesitate to get in touch with us today.
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