Movie theater shares rebound on Friday as industry absorbs Warner Bros. plans 2021 – Deadline



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Theater inventories were mixed on Friday as the industry absorbed the shockwaves from Warner Bros. breathtaking announcement the day before when the film group collectively plunged into double digits.

The smaller publicly traded US chains have lower debt and are in better financial shape. The Cinemark and Marcus circuits, ranked third and fourth, both increased by more than 8%. Imax gained almost 4%.

But AMC Entertainment, the group’s largest and most indebted, extended its losses, closing at 3.4%, off its session low but extending a steep 21% drop on Thursday. AMC filed yesterday to sell up to 200 million shares to raise some desperately needed fresh cash.

The shares of British giant Cineworld, parent company of Regal, in financial difficulty, plunged 15% on the London Stock Exchange.

AT&T boss John Stankey says movie theaters will always have ‘a role in society’, but ‘Horse Left The Barn’ streaming

National cinema advertising agency CineMedia fell 1.6%.

The Dow Jones Industrial Average, as a whole, closed 0.83% higher in a slightly positive session on hopes that the gloomy November labor reports this morning will push Congress to adopt an economic stimulus package (which could possibly include aid to theaters). The Bureau of Labor Statistics reported 245,000 net new jobs created last month, half the number predicted by economists. Some 10 million people are still out of work, with federal unemployment and other benefits set to expire at the end of the year if Congress does not act.

WarnerMedia’s parent company AT&T rose 1.08%. The studio said on Thursday that its entire selection of 2021 films will debut on HBO Max day and day with theaters nationwide. Theater stocks fell an average of 15% from their daily highs after the news broke.

B. Riley’s analyst Eric Wold in note today – which not everyone would agree with – called the drop a “overreaction” and said he ultimately believed the impact on exhibitors would be less than what investors initially feared. The industry “has to adjust to a new normal,” he said, but “we believe it can be done in a way that is progressively beneficial for exhibitors and studios.”

The big chains have made it clear that they will insist on favorable terms. Wold said he believes the balance of power could return to the show in the middle of next year, as a vaccine helps keep the movies running. “Considering the significant sunk costs associated with the production and marketing around each movie, we might see increasing pressure on Warner Bros. to abandon or significantly modify this new strategy, ”he said.

Warners called the move a temporary response to Covid-19 and a way to attract subscribers to its new streaming platform. AT&T CEO John Stankey said on Friday that this could throw a “lifeline” for cinemas, which he says will be assured of a “role” in the entertainment industry beyond pandemic.

MoffettNathanson analysts Craig Moffett and Michael Nathanson think it’s really hard to roll things back after the window collapses. It is true that theaters may dislike the terms and refuse to play the films. However, given the difficult financial situation they find themselves in, “we think it will be difficult to maintain the line by maintaining an exclusive theatrical showcase. Still, by accepting up-to-date releases for Warner Bros., theatrical owners will be putting a green light on all other studios with a SVOD platform to at least try that out.

All of this has made Wall Street more curious than ever about what Disney is planning to announce at a four-hour investor meeting scheduled for next Thursday. Disney shares rose 0.61%.

“It’s a paradigm shift,” Heather Moosnick, former head of Hulu and YouTube, told CNBC today. She said the biggest beneficiaries may well be consumer electronics companies, as Americans continue to invest in home theaters and smart TVs.

Deadline video



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