Amidst a nationwide lockdown, AMC Theatres might face bankruptcy. Will Amazon bail them out? Or will AMC stand on its own and stand against vertical integration?

Read on to see why Amazon might want to takeover AMC Theatres.
Rumors are buzzing that Amazon will takeover AMC Theatres. commons.wikimedia.com

Forbes Magazine compares Jeff Bezos’ Amazon / AMC takeover to the average theatre-goer buying a bag of popcorn from the snack bar. The rumor that Amazon will buy out AMC Theatre is just that, a rumor, for now. Yet stock in AMC rose 30% as a result.

A 30% increase in stock is shocking considering the lockdown. Theatres like AMC have been hit hard due to social distancing. Movies are being released directly to digital, or not at all. But AMC is the largest theatre chain in the country. How could they fail?

Well you’ve heard the saying, the larger they are the harder they fall. AMC’s debt has grown to $4.9 billion in wake of the lockdown. Many say bankruptcy is next for AMC. However, the Dalian Wanda Group in China that owns AMC denies this.

Wanda bought AMC for $2.6 billion and AMC is now $4.9 billion in debt. So it’s hard not to speculate about its future. Amazon buying AMC seems to align with what we know about the direction the industry is heading.

AMC Theatres are in trouble but they insist the Amazon takeover is just a rumor.
With the purchase of AMC Theatres Amazon would control the entire value chain in the movie industry. pixabay.com

Why would Amazon takeover AMC? What happens if they do?

Amazon has already shown some films made by their studio in select theatres. They have to in order to get nominated for awards like Oscars or Golden Globes. If Amazon bought AMC, it would streamline this process.

Up until Nov. 2019 it was illegal for Amazon to buy AMC. To stop vertical integration the US Justice Department prevented studios from buying theatres. The law that’s existed since the 1940s is being revised because of changes in the industry, i.e. streaming services like Amazon Prime.

So what happens if Amazon does buy AMC? Well, the aforementioned Amazon Prime service has become the company’s “primary” cash cow. Amazon understands the value of subscription services. They understand bettering those services until you use Amazon more frequently for more purposes.

What I’m saying is, your Amazon Prime subscription might one day come with some free monthly visits to the movie theatre.