AMC Entertainment reported Q4 earnings this week, showing both revenue and profits above expectations. AMC CEO Adam Aron explained that the company had Taylor Swift and Beyonce to thank for their good fortune, saying that the 11% year-over-year increase in revenues was “attributable to our having shown these two [concert] movies in our theatres in the U.S. and internationally.”
Taylor Swift’s ERAS and Beyonce’s RENAISSANCE films grossed over $250 million worldwide, and AMC received a unique benefit due to its direct agreements with both artists on the distribution of their films. Box office grosses were split directly with both artists. With last year’s labor strikes causing the postponement of several releases past the end of the year, these two concert movies stepped in to provide a critical lifeline for the world’s largest exhibitor.
Despite these positive results, AMC is still struggling to manage more than $4.5 billion in debt. One way to pay down that debt would be to raise money by issuing new shares for investors to snap up. While that may work for the company, this would come at the cost of current shareholders having their ownership diluted. With a disappointing box office to start 2024, AMC may struggle to earn its way out of the hole of debt that it finds itself in.