AMC's CFO Calls 2019 U.S. Box Office, Projected for $11.4 Billion, a "Disappointment"

AMC Theater - Getty - H 2019

"We maybe got a little ahead of ourselves," Craig Ramsey told an investors conference after the industry last year fell short of 2018's record box office tally.

AMC chief financial officer Craig Ramsey on Tuesday said the U.S. box office haul for 2019, expected to be the second-highest of all time at $11.4 billion, has become a letdown.

"Look, the box office, while we could say was a disappointment, we maybe got a little ahead of ourselves as we were coming off 2018 as a really strong year and we had some expectations that we didn't quite meet in 2019," Ramsey told the 2020 Citi Global TMT West Conference in Las Vegas during a session that was webcast.

Current estimates for 2019's final tally are down from 2018 when the U.S. box office brought in a best-ever $11.88 billion. As AMC Theatres faces competition in the home entertainment arena from Netflix and other streamers, the exhibition giant has launched its own ticket subscription service, Stubs A-List, and refurbished its cinemas to retain customer loyalty.

Ramsey's comments came ahead of the AMC finance chief getting set to retire next month after 25 years at the company. Sean Goodman, currently CFO of Asbury Automotive Group, will replace Ramsey as finance chief at the mega exhibitor upon Ramsey's departure on Feb. 28.

AMC also announced Tuesday that Dan Ellis will be promoted to senior vp development and international as Mark McDonald, who currently holds the post, also prepares to retire at the end of February after 41 years with the company.

As he gets set to make his own exit, Ramsey looked back on an exhibition industry that today faces a competitive threat as the Hollywood studios — the major movie providers to the local multiplex — also launch streaming platforms.

He argued the rise of streaming giants will inevitably sap cinema attendance and investor confidence. "The streaming market has built some momentum and it's had a negative overhang on our equity trading. ... It's not been a particularly good year for our shareholders," Ramsey told investors.

Last year, Netflix held talks with AMC and Canada's Cineplex about carrying Martin Scorsese's The Irishman before those negotiations were abandoned. Sources say the two chains were willing to consider collapsing the window to 60 days, provided Netflix would commit to a major marketing spend and a more generous split for the theater companies.

Asked about a possible 45-day window in theaters, especially for smaller titles, before streaming movies went online, Ramsey said "we would need to be compensated before we go down that path." He added that, beyond talk of a shrinking theatrical window, a partnership between the movie chains, the major studios and streamers could ensure the theatrical experience remained "a long-term, viable business for years to come."

The exec said AMC had a role to play for the major studios in how it promoted their movies to its loyalty program subscribers or how it played trailers in its theaters before main attractions.