First, the New York Post reported that “sources” said that Cinemark – the nation’s third-largest exhibitor – was eyeing the possibility of taking over some of the locations currently operated by AMC Theatres, the largest US circuit. AMC continues to burn cash, and its debts are increasing as it struggles with closed or sparsely-attended cinemas due to the COVID-19 pandemic.
Cinemark is struggling as well but has a better-looking balance sheet and has announced that it has enough cash and liquid assets on hand to survive into 2022, if necessary. Cinemark’s CEO, Mark Zoradi, denied the Post’s reporting, saying that it would evaluate opportunities that present themselves but that the company’s priority was to preserve its capital to be in a strong position when the exhibition sector recovers.
Zoradi did tell investors that he expects “some contraction” among exhibitors. CFO Sean Gamble projected confidence in the sector’s long-term prospects, saying, “What we’ve seen over time is that movies released directly to home have always underperformed theatrical releases. [A theatrical run] is a way to eventize a movie, establish the brand, and stamp of quality.”