AMC Theaters is the largest movie theater chain in the U.S. with 600 locations nationwide. With the spread of COVID-19, the chain has closed its locations going dark with the escapist reality that’s now being consumed in people’s homes.

While AMC CEO Adam Aron is optimistic that the chain will open its doors in mid-June others aren’t as positive about that reality.

S&P has downgraded AMC’s credit rating expecting the movie theater chain to not recover.

We do not believe AMC has sufficient sources of liquidity to cover its expected negative cash flows past mid-summer.

-S&P analysts

The change in credit rating moves the company into “default imminent” due to “little prospect for recovery.”

While some have projected that the COVID-19 pandemic will peak between June and August S&P expects it to continue well beyond leaving the company without the needed summer blockbusters and closure for 6 months or more. That will make the company unable to pay its debt. The company reported a $5 billion-plus deficit at the end of 2019 and losses of $149 million for the year. They had a $110 million profit in 2018.

The company has cut executive pay and bonuses for three years in exchange for stock and furloughed 600 corporate employees.

The closure of so many theaters and the loss of screens will be a massive blow to the industry, not just in its recovery but the future as a whole as consolidation has lead to stricter screening deals that have resulted in further market dominance by a few. A shift to digital releases during the crisis has also created a murkier future. While that sort of release has been attempted in the past, it’s never been done on such a large scale. High profile films are skipping theatrical runs altogether while others have compressed the time of release from the theater to digital release. It’s unknown how much that will continue once the crisis has abated.