After struggling since the COVID-19 pandemic, the theater industry will be “roaring hot” in 2025 and 2026, the chief executive of AMC Entertainment Holdings told TheWrap. He also noted that this boom could take place even if major theater chains have to close more locations due to underperformance or an inability to keep up with rent.
“Finally we’re at a point where we can look forward, and the story is going to be very different very soon,” AMC CEO Adam Aron said. “Our industry can see recovery just over the horizon. The box office in 2025 and 2026 is going to be roaring hot compared to 2023 and 2024.”
In 2023, AMC’s EBITDA was up tenfold from 2022, to $425 million. But, as with other theater chains, it is still trailing 2019, pre-pandemic levels.
To try to improve its margins, AMC has been closing theaters, shuttering 169 locations since 2019. At the same time, it added 60 theaters in better conditions, better locations and with better lease terms. The 60 that the chain added had EBITDA that was almost $100 million more than the 169 that it closed, Aron said.
But AMC has also benefitted from squeezing more out of each customer. In 2019, food and beverage sales were about $5 a head. Recently they have been over $9 per person due largely to growth of over 80% in food and beverage sales. Aron said that AMC’s profit per patron (EBITDA per patron) is up about 35% today from what it was pre-pandemic.
“Mostly we’re selling a lot more food and drink,” he said.
Aron used these trends within AMC as an example of why he believes that the industry can continue to see revenue from both box office and concessions rise even if the trend of overall contraction that began with pandemic closures continues. About a third of the 4,200 active theaters in the U.S. produce probably less than 10% of the box office, Aron estimated.
“Does the industry need them to stay open? There’s not a desperate need for the bottom third,” he said.
AMC turned the entire film industry on its ear last fall when it made the surprise announcement that it would partner with Variance Entertainment to directly release “Taylor Swift: The Eras Tour” at its locations and at other chains. Grossing $261 million worldwide at a time when studios were moving films out of 2023 due to the ongoing SAG-AFTRA strike, the film showed the power of alternative content to fill in holes in the release slate, though Aron knows that Swift was a particularly strong outlier.
Aron said the company is leaning into its success. “We would love to be able to bring more concert films to theatrical exhibition,” Aron said. “I can confirm that we are talking to other artists. I can’t confirm we have landed anything yet.”
He added that AMC is also exploring using venues to host sports games, including football, baseball and hockey contests. And college sports, particularly college football, could be exhibited for local audiences around where schools are based, he said.
While concert films can help stem the tide, there’s no replacement for a consistent stream of studio releases. Aron has constantly spoken of the urgent need for greater theatrical output for both AMC and exhibition as a whole in earnings calls and public interviews.
Barring another strike, the industry seems to be ramping up its quantity of releases for the latter half of 2024 and throughout 2025.
