AMC Entertainment (NYSE:AMC) suffered another setback in its quest to survive the coronavirus pandemic after movie studios decided to push back the release of their biggest films, forcing the theater operator to delay its reopening.

There is no "if you build it, they will come" factor for movie theaters. Without films to show, patrons won't appear, and AMC's decision, though necessary, makes its survival struggle all the more difficult.

Abandoned movie theater sign

Image source: Getty Images.

Staying dark

After Warner Bros. said the release of Tenet, the much-anticipated Christopher Nolan spy flick, would be delayed yet again, and Disney put the release of its live action remake of Mulan on hiatus by removing the movie from its release calendar, AMC Entertainment had little option but to delay the reopening of its theaters, now scheduled for mid-August.

AMC, Cinemark Holdings, and Regal have been counting on movie studios to release their films to get consumers back in the seats. But Tenet has been delayed numerous times and while Mulan is another highly anticipated film that was slated to come out on Aug. 21, Disney's other live-action remakes have been received less enthusiastically.

There are now no potential big movie hits scheduled for release months. Warner Bros' Wonder Woman 1984 won't appear until Oct. 2, while Paramount's A Quiet Place II, which was supposed to arrive on Sep. 4, has now been pushed back until April 2021. The studio's Top Gun sequel starring Tom Cruise was supposed to be released in December, but now won't hit the big screen until next summer.

Risky business

Theater operators are right to be worried. Without something worth going to the movies to see, even the most dedicated cinephile would be hard-pressed to have a reason to attend a theater reopening.

The new developments deepen the crisis at AMC, which has been teetering on bankruptcy and battling its lenders that are fighting its attempts to restructure its debt. Earlier this month the majority of lenders on AMC's $2 billion term loan sent the theater operator a letter saying it was in default.

The theater owner burned through $275 million worth of cash in the first quarter, and that was when it had theaters open for the entire period except for the last two weeks, when it shut them down globally.

In announcing it was delaying its reopening, it noted that about one-third of its theaters were up and running in Europe and the Middle East. International markets account for just a quarter of the 8,800 screens it operates.

The U.S. typically represents over 70% of revenue and adjusted earnings before interest, taxes, depreciation, and amortization. The handful of screens lit up overseas isn't going to help much, if they're pulling in any money at all.

Threats mount unchecked

Already under pressure from streaming video, theaters have increasingly had to rely upon blockbusters to get moviegoers to come out. But Universal shocked the industry by skipping a theatrical release of its Trolls World Tour kids flick and going straight to pay-per-view, where it was a massive hit during the lockdown.

Now other studios are doing the same with other films, further pressuring theaters that are unable to respond. Many states remain steadfast in refusing to allow theaters to open, though some are permitting it, albeit with capacity constraints imposed.

That makes the costs associated with movie showings uneconomical for theater owners, and without some tentpole movie to show anyway, few tickets will likely be sold as surveys show consumers are still leery about going to the theater.

Delaying the reopening of its theaters only makes sense, but it doesn't make AMC Entertainment's future any less dark.