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AMC Entertainment chief executive Adam Aron said a booming box office and sharp pivot to theatrical by studios and streamers makes him “as relaxed and confident about AMC future as I possibly can be.”
Speaking with Deadline at CinemaCon in Las Vegas on Tuesday, Aron indicated the icing on the cake would be a judge’s approval of the settlement of a shareholder lawsuit this summer, paving the way for the giant circuit to raise as much cash as it needs, if it needs, and boost its share price in a 10-for-1 reverse stock split.
AMC shareholders overwhelmingly approved plans for the reverse split, a conversion of APE (AMC Preferred Equity) securities into AMC common stock and authorization to issue new shares. It’s not able to sell much stock now in the case of another dip, which is why Aron has said the exhibitor isn’t out of the woods. A few shareholders sued to block the moves, but then settled with AMC.
A Delaware Chancery Court judge needs to approve the settlement and said today she wants to give time for comments, citing heavy investor interest in the case. She set a tentative late June hearing date.
“The plaintiffs are in favor of this settlement. We are in favor of this settlement,” he said. “I will be more confident after this, after we have the ability to implement the shareholder vote,” he added. “When you have the flexibility to raise capital if you need to, it’s really important. Whether we will need to or not depends on what … the box office is this year.” He thinks it will top $9 billion.
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So far so good — it’s rising. “I believe we’re on a ramp. And I’m certain that ‘23 will be bigger than ‘22. And I’m expecting the ‘24 is going to be bigger than ‘23. And I’ve already said publicly, I think that in 2024-2025 the pandemic will be an ancient memory.” He called Covid “a five-year detour for this industry. And we just completed our third year.”
If AMC’s plan is approved and executed, “Our stock price should rise by tenfold. And then, after it rises tenfold, we’d have the ability to sell up to 408 million more shares. And then you’re talking about $10 billion-$12 billion of capital you could raise.”
Meanwhile, he said, “I want to salute the fact that, you know, there were 70 movies out last year, and there are going be 100, 110 movies out this year, and that there might be a bigger number than that out in 2024,” he said. And “I’m so encouraged by the fact and so appreciate the fact that they [studios] are doing now exactly what we asked for a year ago, which is to have some kind of theatrical window, because there’s pretty much consensus around a 45-day window. And there are so many examples of smart movies that weren’t even intended to be released, theatrically that over the last 90 days have come on to the theatrical calendar.”
He said he hadn’t seen The Flash yet — he will at a screening later today — but has liked everything highlighted so far at the annual trade show. Warner Bros.’ presentation was this morning, Sony’s last night.
He’s also “very excited to lean into Apple movies, and Amazon movies in our theaters.”
Asked why he thinks Netflix hasn’t joined the other two streamers on the big screen, he said: “I have some strong opinions as to what they’re doing and why they’re doing it. But I prefer not to share.”
He also declined to comment on the potential impact of a potential writers strike on AMC or exhibition, or to weigh in on the ongoing bankruptcy of rival Cineworld, parent of Regal. Asked about AMC adding locations, he said, “We’re constantly on the lookout to add attractive theaters to our network.”
Aron has also been gradually diversifying, introducing AMC-branded popcorn rolling out into thousands of Walmarts. Today, the chain announced an AMC Entertainment Visa card offering points for use by members of its AMC Stubs loyalty program. There’s an Apply Now button on AMC’s website.