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Cinemark Doesn't Want to Follow AMC's Movie Release Deal

By Jennifer Saibil – Aug 4, 2020 at 12:39PM

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The movie theater company is not on board with AMC's capitulation.

The coronavirus pandemic is changing the way people do many things, from shopping to playing sports. While many of the new behaviors may disappear once COVID-19 does, some of them seem to be part of a new normal.

One of the trends that may stick around is home movie streaming. Companies such as Netflix (NFLX -0.88%) and Walt Disney (DIS 3.51%) had seen success with their streaming even before COVID-19 kept people at home and out of theaters, but theater closures certainly didn't hurt. Theater companies, however, have been crushed by the pandemic, and may continue to struggle even once they open as filmgoers have become quite comfortable watching at home.

Young girl in a movie theater with a mask.

Image source: Getty Images.

Take me out to the theater

AMC (AMC 9.74%), the world's largest movie theater company, has been receiving attention for its woes, and a particularly nasty battle with film company Universal. Universal, which is owned by Comcast (CMCSA 1.55%), said that going forward it would release its films straight to streaming with theater showings, dismissing the current 90-day window for theaters. AMC shot back with a refusal to show Universal films when it reopens theaters. The two came to an agreement last week that gives AMC a new 17-day window before Universal can bring movies to streaming.

Mark Zoradi, CEO of Cinemark Holdings (CNK 2.88%), the third-largest movie theater operator in the U.S., said on Tuesday that the company wasn't looking to join in the compromise. Zoradi said that an "aggressive shortened theatrical window could have an adverse impact on the mid-to-tail end of a films life." He added that he might be willing to make concessions under conditions that were in the "best interests of the overall industry, our company and our shareholders."

Jennifer Saibil has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Netflix and Walt Disney. The Motley Fool recommends Comcast and recommends the following options: long January 2021 $60 calls on Walt Disney and short October 2020 $125 calls on Walt Disney. The Motley Fool has a disclosure policy.

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Stocks Mentioned

Cinemark Holdings, Inc. Stock Quote
Cinemark Holdings, Inc.
CNK
$12.66 (2.88%) $0.35
AMC Entertainment Holdings, Inc. Stock Quote
AMC Entertainment Holdings, Inc.
AMC
$7.55 (9.74%) $0.67
Netflix, Inc. Stock Quote
Netflix, Inc.
NFLX
$236.93 (-0.88%) $-2.11
The Walt Disney Company Stock Quote
The Walt Disney Company
DIS
$100.54 (3.51%) $3.41
Comcast Corporation Stock Quote
Comcast Corporation
CMCSA
$30.83 (1.55%) $0.47

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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