Media War Stories, Inflation Mania, and AMC's Meme Stock Villain

Merry Christmas Eve and thanks as always for reading The Daily Courant, bringing you the latest and most binge-worthy journalism from Puck.
 
Today, we direct your attention to Matt Belloni's cutting assessment of Hollywood's villain of the year: Adam Aron, the AMC Entertainment C.E.O. who lucked into one of the greatest meme-stock rallies of all time—and then used the investor bonanza mostly to enrich himself. (Bonus track: Hollywood's 5 biggest bungles of the year.)

Plus, below the fold, don't miss the latest episode of The Powers That Be as Puck co-founder and editor in chief Jon Kelly joins Peter Hamby and Julia Ioffe to discuss Gen Z's beef with Joe Biden, the vicious cycle of inflation "concerns", the Manchin enigma, and how the latest Covid outbreak put the "me" in media.

Hollywood’s Villain of the Year Is…

AMC Entertainment’s “Ape” C.E.O. was caught with his pants down (once, literally), until a bunch of meme traders gave him an extraordinary lifeline—which he used to benefit himself, mostly.

To best understand the bold daylight heist that has been committed at AMC Entertainment, let’s go back to August 2019. That’s when C.E.O. Adam Aron announced layoffs and a restructuring, even as global box office was headed for a record $42.5 billion year. Investors, along with any semi-coherent person, saw the Netflix revolution as probably a bad thing, long-term, for movie theaters, and that AMC, as the world’s largest chain, would be hit the hardest. The company’s stock floundered. And that was before the pandemic.

Cut to March 2020, and we all know the story: AMC shut down its 10,000 or so screens and laid off or furloughed most of its roughly 30,000 employees. Various hail marys ensued: Aron raised $500 million from the bond market and renegotiated leases, but it wasn’t nearly enough. Burning through $100 million a month, with $6 billion in debt, AMC felt heat from Apollo, one of its biggest creditors, to declare bankruptcy, just as smaller chains like Alamo Drafthouse and Pacific Theaters (owner of Arclight) had done. Aron refused, no doubt suspecting Chapter 11 might result in his ouster. Instead, he resorted to two unusual “at-the-market” equity offerings, where a company sells new shares at market prices to any random investor. In January 2021, AMC raised a surprising $917 million, despite a stock price around $2. “Today, the sun is shining on AMC,” Aron declared.

But with Covid raging, studios delaying titles and Warner Bros. and Disney going day-and-date for big movies, institutional investors weren’t feeling the warmth. The theatrical window, sacrosanct for a century, was forever shattered. Depressing stuff, if your entire business depends on that window. 

Then something miraculous happened...

FOUR STORIES WE'RE TALKING ABOUT