For Q3 2023, AMC produced strong results and took share. U.S. revenue was 10% above 2019’s level while attendance improved to 84% of 2019 levels (up from 70%) in Q2 2023. For AMC’s business health, it’s about generating cash, and there is more work to do on this front. Six-month EBITDA of $375M was nearly even with 2019’s level; however, cash from operations was a negative -$340M with deferred rent payments being half of the drag.
Regarding the Taylor Swift: Eras Tour, AMC CEO Adam Aron said, “At the domestic box office, Taylor Swift: The Eras Tour was the second highest grossing movie of all time for any and all genres to be launched during the month of October...As for our role as exhibitor, AMC's market share of ticket sales sold for Taylor Swift: The Eras Tour was unusually high. Both as distributor and exhibitor, AMC benefited handsomely both reputationally and financially from our having taken on this project, and that benefit will not be a one-time thing.” Said differently, AMC is going to take share again in Q4 2023.
“We are so privileged to be working with artists like Taylor Swift and Beyonce, as they bring their creative vision to their fans, and we do so, too, in the United States and around the world. For what it is worth, in working with two of the most admired pop stars on the planet...We are optimistic though that this will lead to much more ahead. This is not just a one-time thing in 2023.We believe that we will have several more concert film products in 2024 and 2025. We intend to be working with some of the most known and most loved musical artists the world has ever known.”
Cinemark lost market share in Q3 2023, with admission revenue down 6% quarter-over-quarter versus a -1% decline for the industry. The reasons for the loss are less clear. Market differences and weather may be factors. Should the underperformance drag through the first half of 2024, one will know that theater conditions--not enough premium large format (PFL) screens and pricing--are contributors.
In more positive news, Santa may be coming early to Hollywood, as the actors’ union and the studios have approved an agreement to end the strike. Had an agreement not been reached soon, the 2023-24 TV season would be lost, and next summer’s theatrical season would be crippled, along with a significant amount of the Los Angeles economy. Over the next few weeks, we’d expect the 2024 release calendar to shift to new opening dates. By January, we should be able to make projections for the quarterly box office in 2024. That said, we are highly confident that 2025 is going to be a very good year for wide-releases and the box office up year-over-year.
