Pivoting at the Movies
State Farm is Official Sponsor
Screenvision Pivots to Drive-Ins
Movie theaters like AMC have been closed for over two months due to the coronavirus. Some projections forecast theaters may re-open at the end of July as a best-case scenario. When the new block buster movies might appear is still up for speculation.
Even if open in July, the challenge for theaters will be to attract viewers willing to sit in close proximity of strangers.
So with the theater audience removed, in a plot to pivot, Screenvision Media, has expanded to drive-ins. Yep, drive-ins. State Farm insurance is to become the official sponsor of the drive-in movie series circuit. It all started the Memorial Day weekend and is scheduled to run through August.
State Farm’s sponsorship will begin with “welcome messaging,” drive-in trivia and State Farm branding. Screenvision counts over 2400 theaters with over 15,000 total screens and drive-in inventory amounts to only 166 nationwide. As of October, there were 305 theaters in the United States with a total of 549 screens, according to the United Drive-in Theater Owner Association.
With limited capacity of screens and for cars and night time only viewing, it is a pivot to some activity but cinema advertising revenues will probably continue to free fall in the unforeseeable future.
Thickening the plot is one of Screenvison’s largest partner theaters, AMC. It seems AMC is struggling as well.
On March 24, the day after the Fed announced certain stimulus programs, 23 companies have tapped the public market to borrow at a rate of 9% or more, according to data from Tom Graff, head of fixed income at Brown Advisory and from Refinitiv Eikon and MarketAxess. One of the 23 is movie theater chain AMC Entertainment (AMC -0.3%)
AMC is rated in the triple-C category, one level above default, by S&P and Moody’s.
Let’s hope for a quick fix to the COVID-19 crisis and return to the movies.