AMC CEO Thinks the Theater Chain Is Out of the Woods: ‘We’ve Been Defying Gravity for 3 Years’

Adam Aron tells TheWrap he’s feeling good about the future of theatrical, but recalls the deep struggles to keep the business going over the pandemic

Adam Aron AMC Entertainment
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The overall sentiment at this year’s CinemaCon is that of optimism. After a global pandemic shuttered theaters worldwide, and then an industry-wide pivot to streaming made theatrical release less sexy to Wall Street, Hollywood at-large seems to have gotten the message. If you want to make money on your movie, and even if you want people to watch your movie on a streaming platform, you have to put it in theaters first. That’s music to the ears of AMC’s colorful CEO Adam Aron.

“We almost ran out of cash five different times,” Aron told TheWrap in Las Vegas Tuesday. “We [had times where] we had just four to six weeks of cash [on hand].”

Aron spoke openly about how close AMC came to collapse in the first year of the COVID pandemic. The company was in that time feverishly trying to raise money and was able to raise, from a combination of debt, equity or concessions from landlords and lenders, $5 billion from March 2020 to March 2021.

“That’s a big reason we’re standing here today.”

The head of the largest theatrical chain in the world didn’t have anything official to say about the litigation concerning APE-conversion, the case is waiting on the court to officially approve a settlement within the next 60-90 days, which will hopefully allow the company to continue raising capital.

Today, Aron sees Hollywood returning to something approximating pre-COVID levels of regular theatrical releases. There were barely 70 wide releases in 2022, compared to 140 in 2019, and that number is already up to around 100 for the entirety of 2023. The domestic box office was down 35% in 2022 compared to 2019 despite having around half as many movies. As we’ve seen since 2021, when films like “Godzilla vs. Kong” and “Spider-Man: No Way Home” performed as well, if not better than they might have in non-COVID circumstances, the audience will show up if the movies are there. As such, Aron believes that AMC is out of the woods, with numerous caveats.

“Overall box office is up by about 1/3 compared to 2022,” remarked Aron. If the theatrical industry overall ends up with (as projected pretty much across the board) between $8.5 billion and $10 billion for the year, “AMC will have a significant recovery.” He, like most industry professionals, doesn’t believe that the domestic box office will reach pre-COVID levels until 2024 or 2025.

“The box office is on a positive ramp,” continued Aron, “and if we have the ability to raise cash if we need to, I have no real fear.”

He also expressed optimism over the first two studios expressing fidelity to the theatrical experience. Sony’s Tom Rothman mostly stayed out of the streaming wars by selling first-pay TV window rights to Netflix in a lucrative deal, while Warner Bros. Discovery’s David Zaslav has completely reversed course on Jason Kilar’s “all the eggs in the HBO Max basket” mentality.

“When you have a studio like Warner Bros. Discovery whose CEO got up on the stage and said, ‘We had six movies last year, we’re gonna have 16 movies this year, we want more than 20 movies going forward after that…” Well, Aron remarked, “The last I checked 20 movies is a lot more than six movies.”

Aron further detailed that the biggest threat to theatrical, alongside obvious COVID-related variables, wasn’t severe changes to the theatrical window but rather an industry-wide emphasis on boosting their streaming services. When asked whether he was concerned about another period where distributors just aren’t releasing enough movies in theaters, as we saw periodically from April 2021 all the way through the Fall of 2022, he noted that the distributors have said, publicly and privately, that they are committed to supplying theatrical feature films for theatrical distribution.

“Our ecosystem wasn’t built for 70 to 80 movies a year,” he exclaimed. “Attention was deflected from theatrical releases to streaming services. With the exception of Sony, the studios focused in on building up their streaming services. That was their priority one.”

Aron further stated that it was the $1.91 billion worldwide gross of “Spider-Man: No Way Home” in late 2021 that began the slow turn back to the pre-COVID priorities and pre-COVID status quo.

“The same executives who were so focused on streaming in 2020 and 2021 started to realize again just how much money there was to be made [from theatrical exhibition].” He also noted that studios “came to the conclusion, which we were proselytizing all the way through, that if you took a movie to the theater first, it would be a bigger movie when it went to the streaming platform.”

Aron believes that streaming and theatrical need not be enemies or diametrically opposing forces, but “thought that the best chance for the streaming services to be successful was if they took the movies to theaters first and made them national or global events.”

And yes, the AMC CEO absolutely believes that Netflix should also be releasing their movies in theaters, a point they attempted to make with a week-long 600-screen release of “Glass Onion: A Knives Out Mystery,” which earned around $13 million in late November. But he was less concerned about Netflix’s choices since “conventional wisdom [seems to be] that movies go to theaters first, and then go to streaming platforms are more successful.”

That seems to be exemplified by Amazon and Apple reportedly investing in $1 billion annually in theatrically-intended films. As for the shifting windows, including the new PVOD marketplace which sees theatrical films arrive at home for a $20 rental in as little as three weeks after opening day, Aron believes that it is more important that studios release more movies theatrically.

“The window appears to be an established industry norm,” noted Aron. “So right now, it’s the quantity of movies coming out.”

Finally, when asked about investing in the theatrical experience company-wide, so that a moviegoer seeing a film in a stereotypical small-town theater would have a theatrical experience comparable to a major big-city multiplex, he noted that one of his first decisions as CEO was to triple capital expenditures for exactly this purpose. However, the pandemic put an obvious dent in those ambitions, although he reiterated pledges to spend $250 million on increasing the number of laser projectors to around 3,500 of their 7,000 auditoriums.

“It’s a big bet, but we think it’s the right decision,” Aron said.