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AMC: Variable Pricing Could Be a Game-Changer

Policy shift could represent a sea of change for cinemas

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Mar 03, 2022
Summary
  • 4Q results strongest in 2 years
  • CEO Adam Aron on skeptics: ‘They were wrong. They were wrong. They were wrong’
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The newfangled gizmo that Batman will be pulling out of his utility belt when Warner Bros.' The Batman opens in AMC Entertainment (

AMC, Financial) theaters this weekend isn’t a Bat-a-rang or an explosive pellet – it’s variable pricing.

Moviegoers in some markets can expect to pay $1 to $2 more for the privilege of seeing Zoe Kravitz’s Catwoman and Robert Pattinson’s noir-caped crusader rub shoulders with Riddler and Penguin. AMC’s new premium-pricing model represents a strategy that movie theaters have scrupulously avoided for decades, but now may be pressured to emulate.

Variable pricing is nothing new in the airline, hospitality and theme-park businesses, but cinemas have resisted so as not to give the impression that some movies are more important or valuable than others. Competitors like NEP Group, Cineplex (

TSX:CGX, Financial), Cinemark Holdings Inc. (CNK, Financial), Regal Entertainment Group (RGC, Financial), Marcus Corporation (MCS, Financial) and Alamo Drafthouse are all said to be watching closely.

AMC’s CEO, Adam Aron, said during an earnings call on Tuesday only that prices for The Batman will be “slightly higher” than for other movies, but the move could be the beginning of an industrywide trend. His comments came as AMC reported results for the fourth quarter, which represented its strongest quarterly results in two full years, according to a release.

In the 2021 fourth quarter, total revenues grew to $1.17 billion compared to $162.5 million for the fourth quarter of 2020. Net loss for the fourth quarter improved to $134.4 million, including a non-cash impairment charge related to long lived assets of $77.2 million, compared to a net loss of $946.1 million for the same quarter a year ago, which included a non-cash impairment charge related to long lived assets, definite and indefinite lived intangible assets and goodwill of $466.1 million. Fourth quarter adjusted Ebitda improved $486.7 million to $159.2 million compared to an adjusted Ebitda loss of $327.5 million for the fourth of 2020.

During a phone conference with investors on Tuesday, Aron said of AMC’s skeptics, “They were wrong. They were wrong. They were wrong.” Shares closed at $18.53 on Wednesday, a gain of 1.15%, or 21 cents per share.

As of Dec. 31, 2021, AMC had re-opened and was operating 593 domestic theatres and 337 international theatres. This represents 100% and 95% of its domestic theatres and international theatres, respectively. Substantially all the company’s theatres were open for the entirety of the fourth quarter. Aron said in a statement:

“AMC’s fourth quarter 2021 results represent our strongest quarter in two full years, with positive Adjusted EBITDA of almost $160 million, Operating Cash Generated of more than $220 million and finishing 2021 with a record year-ending liquidity position of more than $1.8 billion. Our positive recovery glide path from the global pandemic continued in earnest in the fourth quarter. While not yet where we want to be, our progress is substantial and unmistakable… As we have repeatedly said, with the monetary war chest that was provided to us by our shareholders in 2021, AMC is no longer on its heels...

The company took advantage of the robust fourth quarter film slate, pent-up consumer demand, and a bold advertising campaign, among other important marketing initiatives, to attract some 60 million visitors to our theatres around the world during the fourth quarter. That was a seven-fold increase over the fourth quarter of 2020, and a 50% increase compared to the third quarter of 2021."

“Following a tough January, AMC stock thrived amid February’s market mayhem,” Barron’s reported. “The shares rose more than 15% during the month, their best month since August 2021 when they rose 27%. The stock is still down more than 30% year to date.”

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