The smaller, publicly-traded U.S. chains have lower debt and are in better financial shape. Third- and fourth-ranked circuits, the largest and most indebted of the group, extended losses, closing down 3.4%, off its low for the session but extending a hefty 21% drop on Thursday. AMC yesterday filed to sell up to 200 million shares to raise desperately needed fresh cash., parent of Regal, plunged 15% on the London Stock Exchange.
WarnerMedia parent AT&T was up 1.08%. The studio said Thursday its entire 2021 film slate will debut on HBO Max day-and-date with cinemas domestically.Analyst Eric Wold of B. Riley in note today — that not everyone would agree with — called that drop an “overreaction” and said he ultimately believes the impact on exhibitors will be less than investors initially feared.
Major chains made it clear they will insist on favorable terms. Wold said he thinks the balance of power could shift back to exhibition midway through next year as a vaccine helps drive moviegoing. “Given the significant sunk costs associated with production and marketing around each film, we could see increasing pressure onWarners has called the move a temporary response to Covid-19, and a way to drive subscribers to its new streaming platform.
Analysts Craig Moffett and Michael Nathanson of MoffettNathanson think it be really hard to shift things back once the window is collapsed. It’s true that theaters may not like the terms and may refuse to play the films. However, given the difficult financial position they are in, “We think it will be hard to hold the line in maintaining an exclusive theatrical window. Yet, by agreeing to day-and-date releases for Warner Bros.
“It’s a paradigm shift,” Heather Moosnick, the former Hulu and YouTube executive, told CNBC today. She said the biggest beneficiaries may well be consumer electronics companies as Americans continue investing in home theaters and connected TVs.
Specialty and luxury cinemas like IMAX will survive since they add real value but the rest? I don't know.