AMC Theaters has had a tough 2023.
The company has been struggling to get back on its feet ever since the 2020 Covid pandemic put a massive dent in its earnings, and just as it was getting its footing, the Hollywood strikes last year knocked it back down.
But thanks to two major film releases, the company claimed during a recent earnings call that it was spared from facing further financial fallout during the fourth quarter of 2023.
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In its fourth-quarter earnings report, AMC revealed that it brought in $1.1 billion in total revenues, which is an 11.5% increase compared to the $990.9 million it earned during the same quarter in 2022. Its EBITDA, which is how much money a company makes before expenses, also increased by 193%.
The company mainly attributes the boost in profits to the release of “Taylor Swift: The Eras Tour,” which debuted in AMC theaters in October, and “Renaissance: A Film by Beyoncé” which was released in December. Both films topped box office numbers.
“Literally, all of that increase in AMC’s Revenue and EBITDA is attributable to our having shown these two movies in our theatres in the U.S. and internationally,” said AMC CEO Adam Aron in the earnings release.
Even though AMC had a boost in ticket sales over the summer with the release of “Barbie” and “Oppenheimer” as it drew consumers back into the theaters in massive numbers, the actors’ and writers’ strikes were still ongoing and continued to eat away at the company’s profits as many film productions were put on hold as a result.
“We want everyone to realize that by the middle of '23 we had finally emerged from the cloud of the pandemic,” said Aaron during a recent earnings call. “But then the strike hit and sent us back into the soup.”
The writers’ strike by the Writers Guild of America started in May last year, and the actors’ strike by union SAG-AFTRA started in July where both unions fought for better pay, benefits and artificial intelligence protections. The writers’ strike concluded in September, and the actors’ strike ended in November.
Both strikes created a backlog in content releases as it paused several highly anticipated film productions such as “Avatar 3,” “Blade,” etc, which caused major challenges for AMC amid its recovery from the covid pandemic.
As a result, AMC rethought its strategy and made a rare move by partnering with both Taylor Swift and Beyoncé to distribute both concert films respectively in an effort to increase foot traffic in its theaters.
“If you look at the single biggest challenge that our industry has faced since the reopening of theaters at the end of 2020, it's in the lack of content,” said Aron during the call. “And we took matters into our own hands in 2023 with Taylor and Beyoncé and had two grand successes.”
The company also claimed during the call that both movies caused its U.S. market share to rise by more than 50%, and that both films received “a rare A-plus cinema score.” AMC also said that the Rotten Tomatoes response for both releases was "astronomical” as Taylor's film scored a 99/98 and Beyoncé's film scored a 97/99.
As a result of the success, AMC teased during the earnings call that both films have caused the company to gain the attention of “the best musical artists in the world,” and that it will distribute similar concert films in the near future.
“Our phones have been ringing off the hook, and I can confirm to you today that we are now in constant touch with others who are seeking that AMC also distributes the movies of more world-class musical artists for later in 2024 and/or 2025,” said Aron.
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