It’s not news that landlords are feeling the sting from tenants that can’t pay rent, but I’m a bit flummoxed by this lawsuit. $7.5 million for the entire balance of the lease? That’s what a Florida landlord is asking AMC to pay.
Palm Springs Mile Associates, Ltd., filed suit in federal court in Miami, alleging that AMC had failed to pay the $52,153.87 monthly rent on the AMC Hialeah 12. The suit contends that the breach of contract has triggered a requirement for immediate payment of the balance of the lease. The suit seeks in excess of $7.5 million in damages.AMC Theatres Sued by Florida Landlord for Not Paying Rent – Variety
Let’s talk about that rent for a minute. $52,153.87 per month. If we divide that by 12 screens that works out to a cost of $4,346 per screen, if we then divide that by 30 days, that works out to 362 movie tickets sold per screen per day just to pay the rent.
This doesn’t take into account that the theaters don’t get to keep 100% of the ticket price. In fact, they get far less from the new movies when first released. This also doesn’t cover any labor costs.
This makes me feel less annoyed that popcorn is sold at an extreme markup (see: 788% Profit on Movie Theater Popcorn). Clearly, without the concessions these movie theaters would go broke.
Why aren’t movie theaters selling and delivering popcorn? There’s Doordash, Ubereats, etc. I’d think this would give at least some revenue to theaters from their businesses that literally are making $0 while shuttered. Some independent theaters are doing this but not the big three. They just shuttered and furloughed a bunch of their employees. They didn’t even try.
On that front, I can see why landlords would feel a little put off. No attempt to use any of that real estate to generate any kind of revenue makes little sense. The flip side of that is that rent seems ridiculous to me. Maybe it’s in a prime location, I don’t know the details, maybe it is well worth that price, but that is some real difficult math to wrap your head around for a viable business model at the least.
Put all this together and add to it the news that AMC is now holding out on reopening because there are no new movies to show? That just adds to the legal quagmire for this struggling industry giant.
AMC, open the theaters when it is safe to do so, there are plenty of movies to show — classic movies, if need be. Using the excuses not to reopen because now there are no new movies to show? That will likely not hold up in neither the court of public opinion or court that decides financial judgments against your business.
5 thoughts on “Florida Landlord Sues AMC for Rent – 7.5 million – Meanwhile, they won’t open until there are “new” movies to show?”
This makes me personally irritated. I’m an AMC A-List member and I love the chain (especially my local AMC) for the kick ass service and benefits. Rent being this high is upsetting and I wish there was more leniency from land lords. This pricing is absolutely ridiculous and it’s a pandemic so it feels even scummier.
I do think the suggestion to open when it’s safe to do so makes sense, but I think AMC’s announcement lines up with that. Major distributors will probably only release the big blockbusters of the year when they know tons of people are going to go, which would only happen when governments say it’s safe enough. That being said, I do think rephrasing it to what you’ve suggested would help deflect a lot of criticism while being functionally the same.
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Maybe somebody in that part of Florida will come along and explain that it’s a really busy mall area, but man $52k a month is just BRUTAL overhead. I don’t know how many businesses, especially movie theaters, can turn a profit with rent that high.
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