Good news: AMC will be showing soccer games in theaters

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AMC entertainment group (NYSE: AMC) is struggling to recover from the pandemic. As if that wasn’t bad enough, the company is part of an industry that has seen long-term customer decline. Both AMC and the industry need innovative thinking to get out of this funk.

AMC CEO Adam Aron put exactly these considerations into practice when he announced a partnership to bring National Football League games to the AMC big screen. Exercise is one of the most watched programs and soccer is the most popular sport in the United States

AMC will start small and show NFL games in 40 theaters in 25 markets. Image source: Getty Images.

AMC brings the NFL to the big screen

In 40 theaters in 25 markets, AMC will show an NFL game in each market that is not available on local television. The games will be free for fans, but there’s a catch: you’ll need to join AMC Stubs, the membership service, and purchase a $ 10 food and drink gift card. The company is starting small with the initial rollout and could potentially expand to more theaters if they like the results.

Showing sport on the big screen has the potential to reverse the long-standing decline in admissions. From 2002 to 2019, movie ticket sales in the US and Canada fell from 1.575 billion to 1.239 billion, according to Statista, and that was before the pandemic broke out. There is no telling whether the pandemic will lead to a further decline in the long term.

Fortunately for AMC, as the world advances in the fight against COVID-19, admissions continue to hit post-pandemic records. The challenge for AMC is to bring attendance back to pre-pandemic levels and grow from there.

Interestingly, most NFL games are played on Sundays, with the occasional game on Monday evening and Thursday evening. Going to the movies is usually most common on weekends – Friday evenings, Saturday, and Sunday. Hence, while showing off NFL games, while it’s an excellent start, arguably doesn’t have as much potential as other major sports that have more games during the week when there aren’t that many admissions.

Consider Major League Baseball (MLB), where each team plays over 160 games, and those games are spread out over the week. If AMC can get access to MLB games Monday through Thursday, it could be a turning point.

Target the weak point of the competition

Shareholders should be satisfied with this move by management. The company is increasingly at a competitive disadvantage over replacement services like streaming content, which can cost less than $ 1 a day and provide all-month entertainment for the family. It’s not easy to counter this by selling tickets to movies that cost over $ 10 per person per film.

The only form of content that is scarce on streaming services is sports. Offering content that is not easy to find on streaming services and then lowering the price of the tickets could be what it takes to get people back to theaters. No doubt it is a long way but it is certainly a step in the right direction.

This article represents the opinion of the author who may disagree with the “official” referral position of a premium advisory service from the Motley Fool. We are colorful! Questioning an investment thesis – even one of our own – helps us all think critically about investing and make decisions that will help us get smarter, happier, and richer.

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