It could be lights out for the movie theater business if Congress doesn’t pass the trillion-dollar coronavirus rescue bill. That’s the stark message from John Fithian, president and CEO of the National Association of Theatre Owners (NATO).
“The situation is that dire,” Fithian told Variety, taking a break from working the phones in Washington D.C., where he’s been busy pressing his case to lawmakers.
“Overnight, we went from an industry that makes $15 billion a year — $11 billion in ticket sales and $4 billion in concessions — to one that is not going to make a penny for three or four months,” he added.
Fithian, who leads the exhibition industry’s main lobbying arm, hopes that the final legislation will include provisions for federal loan guarantees, as well as expanded unemployment benefits and cash payments to the 150,000 cinema workers who have been furloughed.
The NATO chief said theaters are struggling to remain solvent without any income. Even though workers have been let go, these theaters still have to pay rent and utilities and they may face bankruptcy without government aid.
Banks, Fithian said, are unwilling to extend lines of credit to cinemas because they’re not sure how long the public health crisis will last and theaters will need to remain closed. It’s a bleak scenario that’s playing out for major chains such as AMC and Regal, as well as for smaller circuits and family-run venues. But it’s one that could be remedied if the Federal Government agrees to back the loans the theaters need.
“Most of these theaters, not all of them, but most of them, will go bankrupt if this does not pass,” said Fithian. “If this goes through, it will provide a whole lot of help to industries that need it like restaurants and bars and bowling alleys and retailers.”
The theater owners are also asking lawmakers to make small business loans more readily available to smaller theater chains and independently owned cinemas.
“Loan guarantees are literally what can keep companies alive so we can bring back workers when the virus is over,” said Fithian. “We want the government to help workers directly so they can pay rent and buy groceries while this is going on, but we also need help to survive so we will be there on the other side with a job for them.”
Fithian said he was optimistic that the legislation will pass and praised the spirit of bipartisanship that he was witnessing. He noted that House Speaker Nancy Pelosi and Senate Majority Leader Mitch McConnell have been in close coordination, despite hailing from different political parties.
“I’ve never seen a process like this,” said Fithian. “It’s unlike the broken government of the last few years and all the partisanship that we’ve seen happening. It’s truly historic. My confidence is growing that they will put together something that will literally save large portions of the American economy. If it does, that will be one of the proudest days we’ve seen for the American government.”
NATO is also prevailing on studios to commit to releasing their upcoming films on the big screen. Major productions such as Disney’s “Black Widow” and “Mulan,” Universal’s “Minions” sequel and Paramount’s “A Quiet Place Part II” that were scheduled to debut this spring or summer have been delayed. Only one studio film, Universal’s “Trolls World Tour,” has decided to forgo a theatrical release entirely and will instead debut on-demand.
“We need studios to help us out,” said Fithian. “We need their movies to be released theatrically later this year. We need to have something to play on our screens when we come back.”
The fast moving nature of the virus and its transformative effect on American life has shocked Fithian. He noted that a few weeks ago he was mostly focused on whether or not CinemaCon, the exhibition industry’s annual trade show, would take place in March or be forced to close. Now, he has more existential concerns.
“A couple of weeks ago I was thinking, ‘this is really stressful,'” said Fithian. “‘Should we hold our show or not?’ That seems so minuscule. Right now the question is: ‘Will there be a movie theater industry when the virus is over?'”