Movie theaters were already teetering on the edge of financial disaster. On Friday, exhibitors received news that could push them over the precipice after “No Time to Die,” the latest James Bond installment, made the decision to push its release from November into April, 2021.
The move could set off a wave of theater closures as cinema owners assess whether they can keep the marquee lights on until “Wonder Woman 1984,” the next potential blockbuster slated for release this year, opens at Christmas. It also shows that even the most potent film franchise (and few series equal 007 in terms of global reach) is no match for a coronavirus pandemic that has shattered the theatrical distribution landscape.
Only a handful of movies have been released since cinemas shut down in March, and most of the films that were scheduled to open by the end of the year, a group that includes “West Side Story” and “Black Widow,” have opted to delay their debuts. Now, the postponement of “No Time to Die” will rob the exhibition industry of hundreds of millions of dollars in revenue at a time when many are grappling with insolvency.
“It’s a wipeout,” said one studio veteran.
Box office analysts appear to agree: There’s no relief in sight for the movie business.
“The theatrical landscape is a vortex, and it’s clear that no big blockbuster can survive right now,” said Jeff Bock, an analyst with Exhibitor Relations. “That’s why everything is going to be pushed back to 2021.”
As it currently stands, movie theaters are looking at an October and a November that are largely devoid of major titles — a situation that’s been exacerbated by the disappointing box office returns for “Tenet,” the Christopher Nolan epic that opened in September. Pixar’s “Soul” is still scheduled for Nov. 20, but there are mutterings that film could move as well. In the short term, the Bond film’s decision to open on April 2, 2021 led “F9,” the latest entry in the “Fast & Furious” franchise, to surrender that slot and mosey on down to Memorial Day weekend, 2021, when it will now hit theaters.
This fresh wave of release date maneuvers will further disrupt a business that went to great lengths to reopen. Exhibitors invested heavily in new cleaning procedures, they updated HVAC systems and educated staff, and enforced social distancing in their venues, all while banking that stir-crazy consumers would feel safe to venture out of their homes for some escapism.
Things didn’t go as planned. The problem was that major markets, such as New York City and Los Angeles, still haven’t received the green light for cinemas to welcome back guests, making the prospect of releasing a tentpole film during a public health crisis that much more daunting.
“I don’t see any big-budget film opening until New York and Los Angeles have reopened,” said Eric Handler, a media and entertainment analyst at MKM Partners. “The economics just don’t work.”
Moreover, the lackluster results for “Tenet” (the $200 million-budgeted film has made $41 million domestically and $243 million internationally) suggest that even in markets where the government is allowing cinemas to operate, customers are hesitant to buy tickets.
“People are seeing that theaters are taking safety measures, but the biggest issue is there is very little content to sustain the business,” Handler said.
Earlier this week, nearly 100 top filmmakers, a list that included such bold-faced names as Steven Spielberg, Martin Scorsese, Greta Gerwig, Clint Eastwood, Jordan Peele, and James Cameron, prevailed upon the federal government to come to the aid of theaters. In an open letter, they argued that nearly 70% of small and mid-sized movie theater companies will go broke if there isn’t some sort of assistance in the form of loans and other sources of financial support.
“Cinemas are an essential industry that represent the best that American talent and creativity have to offer,” the group wrote. “But now we fear for their future.”
John Fithian, head of the National Association of Theatre Owners, argues that the movie business doesn’t just need a rescue package. In an interview shortly before news broke that “No Time to Die” was moving, the exhibition industry lobbyist said studios need to do their part, as well.
“If we don’t have any movies until we’re fully vaccinated as a world, a lot of the theater companies are going to be gone and the theaters themselves won’t be there,” he said. “So your infrastructure to play your movies and get grosses will not be the same. This idea of waiting out the pandemic to make your movies more profitable doesn’t make sense to me. There won’t be as much of an industry left to play your movies in if you do that.”
Fithian believes that studios need to release their movies now even if they fail to make a profit, because doing so will help preserve cinemas until things return to normal.
“It’s not just about the profitability of one individual film,” Fithian said. “I know that sounds like anathema in Hollywood for me to say that, but it’s about the viability of the theatrical release model.”
“Tenet” will likely lose money, but its overseas results are preventing it from being an epic disaster. Prior to its move, some box office watchers surmised that “No Time to Die” would stick to its release plan because of its international appeal: Bond entries can make as much as 60% of box office earnings from overseas markets. But for a film like “No Time to Die,” with a budget nearing $300 million, results that mirror those of “Tenet” aren’t enough for the movie to come close to making a profit. Plus, “No Time to Die” is heavily dependent on foreign territories like the U.K. and Europe where coronavirus cases are on the rise, raising the specter of a shutdown overseas around the time that Bond flashes his license to kill again. By waiting until the spring of 2021, MGM, Universal and Bond producers Michael G Wilson and Barbara Broccoli, the film’s backers, are clearly banking that the health crisis will have dissipated and that a vaccine may have even begun to be made available.
Theaters may not be there to greet them on the other end. Some smaller venues have already gone bankrupt, others will likely follow, and even major players such as AMC and Regal are in danger, weighed down by heavy debt loads. Credit rating agency Standard and Poors on Friday warned that AMC Entertainment is in danger of defaulting on its debt due to the pandemic. If these companies fail, a business that made $42 billion globally in 2019 and supports 150,000 jobs domestically, may be another casualty of the coronavirus.
On the front lines of the crisis, theater owners admit that they are feeling a growing sense of despair.
“It’s been horrible,” said Chris Johnson, CEO of Classic Cinemas, said of reopening his theaters in Illinois and Wisconsin. “Without consistent new movies, there isn’t enough there to sustain the business.”