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AMC CEO Apologizes to Analyst for Dismissing Outbreak Questions

AMC CEO Apologizes to Analyst for Dismissing Outbreak Questions

(Bloomberg) -- AMC Entertainment Holdings Inc. Chief Executive Officer Adam Aron apologized to an analyst for downplaying her February concerns about the coronavirus -- before the crisis brought the theater chain to the brink of insolvency.

Credit Suisse’s Meghan Durkin had inquired about the spread of Covid-19 in Italy during the company’s previous earnings call, with Aron saying, “We adore you, Meghan, but there is about 19 questions in there.” (She had asked five.) He went on to say that the economic impact of the outbreak was “de minimis.”

On Tuesday, when the company held its latest quarterly call, Aron’s tone was quite different.

AMC CEO Apologizes to Analyst for Dismissing Outbreak Questions

“I owe you an apology,” he said to Durkin. “You asked me about 15 questions about the coronavirus in Italy and I think I said something like, ‘It’s like eight theaters in Italy.’ Two and a half weeks later, it was 1,000 theaters in 15 countries.”

The global pandemic forced AMC to close all of its locations, leading to a loss of nearly $2.2 billion in the first quarter. And the company will only be able to reopen in a limited capacity in the U.S. this summer. Some locations will close permanently as AMC focuses on slashing costs.

On Tuesday, Aron went on to ask if Durkin knew of any future crisis that AMC should watch out for.

“We’ve got the worst health problem since 1918. We’ve got the worst economic crisis since the 1930s, and we have the biggest social unrest in the United States since the 1960s,” Aron said. “If there’s a fourth one the world would like to throw at us, I just want to know if you want to predict what that one is.”

Durkin responded that she had “no issues on the last call” and declined to make predictions about other calamities.

The chain has probably weathered the worst of the pandemic, Aron said, and major cities are starting to open back up. In California, theaters can bring back customers beginning June 12, though Aron said he still needed to have discussions with the mayors of Los Angeles and San Francisco.

He wasn’t sure if New York City theaters will be opened in time for the scheduled premiere of Warner Bros.’ “Tenet,” on July 17. He suggested some movie releases may be delayed by studios if the economics don’t work. As of now, though, both the Christopher Nolan thriller and Walt Disney Co.’s “Mulan,” scheduled for July 24, remain on track.

It’s possible that 2% to 4% of AMC’s U.S. locations never return to business, Aron said. The company will need to focus on reducing its debt pile, which has swelled during the pandemic.

AMC will be “seriously reducing our cost structure, intensely examining every category of our expenditures,” he said.

©2020 Bloomberg L.P.