Cinema chains and smaller exhibitors have been thrust into a financial bind with movie theaters around the world closed due to the COVID-19 crisis. In fact, the movie theater market value has been reported to be down from $751.9 million at the end of 2019, and from $1.44 billion a year ago. AMC Entertainment Holdings, which is the parent of the AMC and Carmike theater chains in the U.S. and the Odeon Cinemas chain in the U.K., is among the theater conglomerates grappling in a post-pandemic world. However, following a media report alluding to buyout talks that the struggling chain had with e-commerce and cloud giant Amazon.com Inc., which also is a parent of Amazon Studios, AMC’s shares rocketed on heavy volume.
Founded in 1974 by Angelo Guzzo with the purchase of the Capri Cinema which he two years later renovated into the first three-room cinema in Montreal, Cinémas Guzzo is a regional chain of movie theaters located in the Canadian province of Quebec. Today, managed and operated by Angelo’s son, Vincenzo (Vince) Guzzo, Cinémas Guzzo, has grown to become the largest chain of independent movie theatres province-wide, boasting 141 rooms in nine Méga-Plex locations and one Cinema location. Further, Vince Guzzo received national attention in 2018 when he joined the cast of the CBC Television business reality show Dragons’ Den—Canada’s version of the U.S.’s Shark Tank—as one of the investor “Dragons”.
- Why AMC’s shares increased so substantially after a possible buyout by Amazon was reported
- The various parties that would benefit the most from this buy out and why
- How Amazon’s ownership of one of the major theater chains may change the dynamics for other large chains and small independent theaters
- Since Amazon runs their own production studio, streaming service, and now, potentially an exhibition chain, whether this buyout could spawn new legislative or judicial action as it pertains to the 1948 Paramount Pictures, Inc. supreme court decision separating film production companies from owning their own theaters
The coronavirus outbreak left people home-bound, with little else to do but binge-watch, forcing avid movie-goers to streaming platforms like never before—a trend that has the theater industry worried about consumer watching patterns as we move into the new normal. After the buyout bomb dropped, Guzzo received calls from both friends and bankers who were concerned that this move by Amazon might be bad for business.
“I actually told them, you know, this is probably a sign—if you think about it—that there’s actually lots of value in brick and mortars. A guy like Jeff Bezos isn’t going to buy brick and mortars for the pleasure of buying brick and mortars. He’s going to buy them because he thinks he can actually do something,” Guzzo stated. “I think it does send a positive message that brick and mortar is here to stay, at least in the movie business.”
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