Rockford movie theater struggles to be ‘viable business’ as pandemic strips away millions in revenue

By Kevin Haas
Rock River Current
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ROCKFORD — A recent Monday matinee at AMC Machesney 14 delivered something unexpected for Kim Crull and her two children before the movie even started playing.

“It was very crowded, and I was surprised,” said Crull, who lives in Capron. “The whole row (we sat in) was full. I feel like even pre-pandemic I hadn’t had that happen recently.”

Packed movie theaters have become somewhat of a novelty since the onset of the coronavirus pandemic, which, combined with increased competition from streaming services, has devastated the theater industry.

Crull, who took her 11-year-old son and 7-year-old daughter to “The Addams Family 2,” credits the big turnout to a rainy three-day weekend with kids out of school and parents searching for something to do. But most movie trips have plenty of empty seats, she said.

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In Rockford, AMC’s theater saw gross revenue decline from $7.86 million in 2019 to $1.28 million in 2020, according to tax assessment documents obtained by the Rock River Current through an information request to the Winnebago County Supervisor of Assessments. The theater reported $1.5 million in net losses through July 31 of this year, and it was in the red by more than $2 million in 2020, the documents show.

“Until the pandemic is under control, movie theaters cannot be seen as a viable business,” the law firm Mayer Brown wrote in a challenge to the property tax assessment for AMC’s Rockford theater.

The firm provided financial figures to illustrate its argument that assessor’s overvalued the property by about $930,000. They argue the theater’s fair market value should be about $4.2 million instead of $5.1 million.

If it successfully challenges its assessment, the property tax burden the theater pays would be reduced. No date has been set for its hearing.

“It is critically important to the survival of this industry that property valuations reflect the impact of the current COVID-19 crisis,” Mayer Brown wrote in the challenge.

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AMC Entertainment did not respond to requests for comment for this story, but its tax assessment challenge lays out the financial impact of the pandemic on its business here.

The theater’s struggles here are shared across the country. AMC Entertainment reported nearly $4.59 billion in losses in 2020. The nation’s largest movie theater company lost an additional $910.5 million through the first two quarters of this year, according to its financial earnings report for investors. It is scheduled to announce third quarter results on Monday.

Faith and O.D. Patton III, downtown business owners who are regular movie-goers, worried whether local theaters would recover after the pandemic. But as blockbusters that were shelved in 2020 slowly start to be released, they’re more optimistic.

“It looks like it’s going to bounce back,” Faith Patton said. “When it first opened back up it was scary. It looked bad.”

Rockford’s AMC closed during the statewide shutdown in March 2020 and reopened in August 2020, but by November 2020 it had to close again amid a resurgence in cases. It reopened for good in late January of this year, but still faces competition from streaming platforms. For example, HBO Max will stream all 2021 Warner Bros. releases, including big budget blockbusters such as “Dune,” “Suicide Squad” and “The Matrix 4.”

“Even with theaters reopened, there remains a struggle to attract customers and generate income with customers having the ability to watch new films from the comfort of home,” the Mayer Brown law firm wrote in its tax challenge.

Theaters may increasingly depend on people like the Pattons, who enjoy the in-theater experience even if they can stream at home.

“I think a lot of people are still hesitant because of not knowing what they’re walking into and afraid it’s not going to be a good experience,” Faith Patton said. “It’s pretty great. It’s pretty close to what it was before as far as it being a good experience, just a little less people.”

This article is by Kevin Haas. Email him at khaas@rockrivercurrent.com or follow him on Twitter at @KevinMHaas or Instagram @thekevinhaas.