Amazon May Acquire AMC Theaters

May 13, 2020

By: Rick Wilks

AMC Movie Theaters, the worlds largest cinema chain, announced on March 17 that they would be closing their theaters for at least 12 weeks because of the Coronavirus.

In early April, there were talks of bankruptcy and if they would even be able to reopen once given the go-ahead from state lawmakers. Monday, Shares of struggling AMC Theatres jumped by as much as 56%, to $6.41, after a report circulated that Amazon held talks with the movie chain over a potential takeover. Amazon is also looking at buying Odeon Cinemas, which is in the UK and a wholly-owned subsidiary of AMC Theaters.

Analyst Eric Wold at B. Riley FBR said what may also be piquing Amazon’s interest in AMC beside just a cheaper price is the November 2019 announcement by the Justice Department’s antitrust division that it would open a review of the Paramount Consent Decrees in place since 1948 regarding a studio’s ownership of a theater chain.

“With Amazon not dependent on any other release windows beyond its own subscription service (other than to qualify for industry awards), we would view increased control over the theatrical window through the acquisition of a large exhibitor as providing Amazon both an incremental earnings stream from its own films and an attractive marketing vehicle to drive additional subscribers being exposed to the studio’s films—something that, we believe, other studios would be comfortable with them doing,” Wold wrote in a note to clients.

Many experts see pros and cons to this acquisition and Amazon did show interest in 2018 in buying another theater chain, Landmark Cinemas. So this one could go either way, but a decision should be made sooner than later as businesses are starting to open back up in phases. 

AMC did respond to a request for comment on this story.


Login To Facebook From Your Browser To Leave A Comment

Leave a Reply

Your email address will not be published. Required fields are marked *