Clint Eastwood, Martin Scorsese Urge Theater Bailout, With Two-Thirds Of Industry At Risk Of Permanent Closure
The coronavirus pandemic has dealt a body blow to the movie theater business, and now the industry is asking for a federal bailout, asserting that over two-thirds of small and midsized movie theater companies will be forced into bankruptcy or close permanently in the near future.
The request for assistance came in the form of an open letter to Congress, signed by a score of established Hollywood directors, producers and writers, along with such organizations as the National Association of Theater Owners, the Directors Guild of America and the Motion Picture Association.
Among the signers are Hollywood directors including Wes Anderson, James Cameron, Clint Eastwood, Ron Howard and Martin Scorsese.
The letter, which notes that 93% of movie theater companies suffered over 75% of losses during the second quarter of 2020, urges Congress to redirect unallocated funds from the CARES Act to help the industry or pass a new relief measure. It did not ask for a specific amount.
"Absent a solution designed for their circumstances, theaters may not survive the impact of the pandemic," the letter says. "Our country cannot afford to lose the social, economic and cultural value that theaters provide."
The letter also said that the industry benefits other sectors, noting that 150,000 people work in theaters nationwide and that the industry supports "millions of jobs" in movie production and distribution.
More to the point for ailing retail properties, the letter also explained that movie theaters support nearby restaurants and retailers by spurring foot traffic.
Besides the Q2 drop-off in revenues for the business, the dire state of the movie theater industry is reflected by anemic numbers of moviegoers in the places that have allowed theaters to reopen, which doesn't yet include major markets like New York City.
The industry had hoped that the opening of Warner Bros.' Tenet for Labor Day weekend would help jump-start revenues, but the $200M would-be blockbuster has pulled in only about $3.4M in the United States (though it has made $280M worldwide).
Major movie studios have responded by delaying big-movie releases even more. Warner Bros., for example, has moved Wonder Woman 1984 from October to December, and Black Widow, another Marvel film, is now slated for a May 2021 release, instead of November.
Also, movies that are still scheduled for releases this year, including MGM's next James Bond flick and Pixar's latest creation, both due for Thanksgiving, may also be delayed.
Boosters said that the heart of the problem for the industry is that much of the public isn't willing to risk exposure to COVID-19 for the sake of entertainment, especially when at-home options are so plentiful. Movie theaters aren't going to recover fully until consumers are confident that they won’t die if they go to the movies, Wedbush analyst Michael Pachter told CNBC.
“That means no return to normal until there is a vaccine widely available,” he said.