The beleaguered movie chain is taking a buyout.
AMC Theaters ( AMC ) - Get Free Report has announced that it will no longer be managing its locations in Saudi Arabia.
Instead, the company has taken a $30 million buyout, which is equal to its initial investment, from Saudi Entertainment Ventures. Moving forward, AMC will now license its 13 locations in the area, and the associated brand and IP to Saudi Cinema Company.
In 2018, the Saudi Arabian government lifted a 35-year ban on commercial theaters, starting with a screening of “The Emoji Movie.” The government at the time also began to allow live music concerts and for women to attend sporting events.
When AMC launched in Saudi Arabia, the government reportedly expected to open 300 theaters by 2030. But AMC took on a heavy debt load during the pandemic, which it got down to $180 million at the end of last year through refinancing . Even if the speculation that the company could go bankrupt by the end of the year proves incorrect, AMC is still quite aways from where it was before the pandemic.
“When the joint venture was created, it had two goals. First, to bring moviegoing to the Saudi people. Second, and equally important, to train a theater management and corporate team such that at some point in the future, the enterprise could be run locally within the Kingdom,” AMC chairman and CEO Adam Aron said in a statement. “After more than five years since our first trip to Saudi Arabia and nearly five years since we opened our first theater there, that point in the future is now. This announcement and agreement is the natural next step in this process.”
In recent years the Saudi Arabian government has been looking to change its image and, critics contend, distract the public from its long litany of human rights abuses , in part by investing in entertainment, such as a recent deal to air its highly LIV Golf tournaments on The CW.
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