Theater Group Sues New Jersey to Re-Open Screens

The National Association of Theatre Owners (NATO), including AMC Theatres, Cinemark and Regal Cinemas, has filed a lawsuit against New Jersey Gov. Philip Murphy and Judith Persichilli, acting commissioner of health of New Jersey, for their legal mandates keeping movie theaters shuttered due to the coronavirus pandemic.

The suit, filed July 6 in U.S. District Court for the Court of New Jersey, alleges the state and Murphy are acting “unconstitutional and unlawful” by allowing certain businesses and places of public assembly to reopen, while requiring movie theatres to remain closed.

“COVID-19 represents a serious public health risk, and plaintiffs support fair and reasonable actions by the government to address that risk,” read the complaint. “However, the government-mandated total closure of movie theatres is neither fair nor reasonable, and is instead a violation of plaintiffs’ First Amendment rights of freedom of speech and freedom of expression, equal protection of the laws, due process under the law, and is a ‘taking of property’ without just compensation.”

Subscribe HERE to the FREE Media Play News Daily Newsletter!

NATO contends movie theaters have been unfairly shutout of the government-mandated business re-openings, which include churches, museums and libraries, which are allowed no more than 100 people or 25% of capacity.

“Shopping can be done outdoors or virtually … [but] shopping malls have been allowed to reopen,” read the complaint.

NATO claims there is no “rational basis” for the distinction Gov. Murphy has drawn between places of worship and movie theaters, both places of public assembly.

“In fact, many churches lacking a building of their own, or lacking the capability to safely host religious services during this period, hold their religious services in movie theatres,” NATO said.

The trade group said operators nationwide are spending millions of dollars incorporating sanitization protocols, ticketless admissions, no-contact concessions and air purifiers for planned re-opening by the end of the month. New Jersey is one of the few states that has not yet allowed theaters to re-open.

The suit seeks unspecified financial damages (besides legal fees), asking that NATO’s members be treated in the same manner as comparable entities under the governor’s orders, and be permitted to reopen as other comparable places of public assembly have been allowed to.

NATO: 90% of Theaters Worldwide to Re-Open by July 17

The National Association of Theatre Owners (NATO) reportedly expects upwards of 90% of movie screens in the world to re-open by July 17 — the launch date for Warner Bros.’ international espionage thriller Tenet from director Christopher Nolan. Disney’s live-action Mulan is slated to debut July 24.

The trade group, which represents 68,000 screens in 99 countries, is pushing the optimistic date as global economies get back on line and coronavirus infections slow. No theatrical chain has officially announced a re-opening date in the United States. NATO is hoping to throw a lifeline to publicly-held exhibitors such as AMC Theatres, Regal Cinema and Cinemark, which have been shuttered since mid-March. AMC, the world’s largest exhibitor, recently disclosed it would not rule out bankruptcy if the situation didn’t improve.

Subscribe HERE to the FREE Media Play News Daily Newsletter!

The chains say they will implement social distancing in theaters upon re-opening, with Cinemark recommending, but not enforcing, facial masks for moviegoers.

“95% of this bullishness is aimed at their investors,” an industry source told Business Insider, which first reported the news.

Follow us on Instagram

Wedbush Securities media analyst Michael Pachter remains bearish on the sector, contending consumer demand for theatrical releases will remain compromised without a virus vaccine.

“People may be eager to visit the theaters once they feel safe doing so, but we think it is unlikely crowds will return to any semblance of normal before a vaccine is widely distributed, particularly in urban and suburban markets,” Pachter wrote in a June 3 note.

He estimates the domestic industry box office will end the current fiscal quarter down 97.8% from 2019, with most domestic screens likely remaining closed beyond the end of the quarter.

“Theatrical exhibition is in the middle of a perfect storm,” Pachter wrote. “Theater closures not only deplete cash reserves and sources of liquidity, but may alter consumer behavior indefinitely.”

NBCUniversal’s Jeff Shell: ‘Not Realistic’ to Ignore PVOD

After setting off an industry firestorm saying Universal Pictures would pursue a movie-release strategy combining theatrical and premium video-on-demand, NBCUniversal CEO Jeff Shell doubled down on his previous comments to The Wall Street Journal after Universal Pictures animated feature film, Trolls World Tour, generated $100 million in PVOD sales.

Speaking April 29 on the Comcast fiscal call, Shell said PVOD would continue as a “complementary offer” to consumers when theaters re-open to the public — and consumers attend.

He said the Trolls had been primed and marketed for a March 20 theatrical bow, and when the coronavirus shut down theaters, going direct-to-consumer on April 10 with a “desperately” needed children’s title during the pandemic was the only option.

“The majority of our movies, whether we like it or not, are being consumed at home,” Shell said. “It’s not realistic to assume that we’re not going to change, that this part of the business isn’t going to change like all parts of the business are going to change.”

Subscribe HERE to the FREE Media Play News Daily Newsletter!

The executive said it remains to be seen what the distribution model will look like post-COVID-19. While he expects a gradual return to the cineplex, which he said Universal would be part of, he also expects PVOD to be a part of the business model.

“[PVOD is] not a replacement,” Shell said. “We’re just going to have to see how long [a return to theatrical] takes and where it takes us.”

AMC Theatres, trade group National Association of Theatre Owners and Regal Cinemas have blasted Universal for pledging to bypass the traditional 90-day theatrical window. Both exhibitors have said they would not distribute any Universal — or other studio — title earmarked for simultaneous in-home digital release.

Follow us on Instagram

With the exception of Georgia and Texas, movie theaters in most states remain shuttered due to the coronavirus. The industry and studios are projected to lose billions in box office revenue to the shutdowns.

Comcast CFO Michael Cavanagh said future PVOD releases would be determined on a “title-by-title” basis.

Theater Trade Group Questions Early Re-Openings

With the state of Georgia allowing movie theaters to re-open on April 27 — provided they adhere to CDC social distancing guidelines — a trade group representing exhibitors says the practice would largely result in screening catalog titles.

The National Association of Theatre Owners in an April 22 statement said exhibitors should remain united in regards to re-opening screens in order to deliver confidence to consumer and stock new-release titles.

Subscribe HERE to the FREE Media Play News Daily Newsletter!

“Until the majority of markets in the U.S. are open, and major markets in particular, new wide release movies are unlikely to be available,” NATO said. “As a result, some theaters in some areas that are authorized to open may be able economically to reopen with repertory product; however, many theaters will not be able to feasibly open.”

With most national chains laying off or furloughing employees and executives, scrambling together requisite staff to run theaters remains a challenge. Adam Aron, CEO of AMC Theatres, has publicly stated he hopes theaters could be operational by July.

Follow us on Instgram

John Stankey, COO of AT&T, parent to WarnerMedia Entertainment, doubts theaters can “snap back” quickly with ongoing consumer uncertainty about the status of COVID-19 infections, inadequate supplies of face masks to businesses and virus screenings.

Indeed, Georgia Gov. Brian Kemp admitted earlier this month that he hadn’t been aware the virus could be spread by asymptomatic people, or those not exhibiting signs of an infection.

Georgia, along with many other red states, has felt internal pressure from some residents and political activists arguing for a return to normalized small business operations and consumer access. Many of the businesses, which face permanent closure and bankruptcy, have been unsuccessful securing federal relief funds.

NATO Says Shorter Theatrical Window Leads to Lower Home Video Revenue

Shorter theatrical windows could lead to lower home video revenues, the National Association of Theatre Owners (NATO) warns.

The trade group in an April 15 news release cited data from an Ernst & Young study it commissioned that examines the effect of the length of the theatrical window on revenues in the home, in theaters, and overall.

The study found that a 1% longer window between a film’s theatrical opening and its availability for home viewing could boost home video sales by $56,000.

The study comes as studios have been accelerating the home release of films to counter movie theater closures due to the coronavirus pandemic. The most pronounced example was Trolls World Tour, which was released digitally at a premium “rental” price of $19.99 the same day it was supposed to open in theaters.

Subscribe HERE to the FREE Media Play News Daily Newsletter!

NATO warned that such early release patterns should be temporary, until the pandemic subsides and theaters reopen, lest studios leave money on the table.

“With movie theaters shut down due to the COVID-19 pandemic, studios have accelerated home release for some titles that were already in theatrical release when the industry shut down,” NATO said in the press release. “Without theaters available, the release window was temporarily irrelevant for those movies. These unique circumstances, however, do not signal a change to the theatrical release model.”

NATO noted that three films unreleased at the time of the shutdown were released digitally, directly to home audiences. “Yet the vast majority of theatrical releases scheduled from March through June have been rescheduled for theatrical release — 37 of them, with six more delayed with no set release date — rather than rushed to the home,” NATO said. “Studios clearly believe it is in their financial interest to have exclusive theatrical releases.”

NATO said the findings of the new Ernst & Young study “are significant, as shrinking revenues in the home have put pressure on distributors to find a way to boost the fortunes of a home segment in secular decline. Shrinking the length of the theatrical release window has been the mechanism most often cited as a means to that end. This study finds that shorter release windows not only damage theatrical revenues — as expected — they damage home revenues as well.”

NATO said the study also finds that “without controlling for the influence of other variables, the length of theatrical run is more highly correlated to home sales than to box office sales.”

Total home video transactional revenue slipped 30% between 2012 and 2017, the period of the study, NATO said, citing DEG: The Digital Entertainment Group numbers. “The study finds the average percentage of transactional home revenue to total combined home and theatrical revenue per movie has declined even more — 32% — from 40% to 27% over the same period,” NATO said.

Lionsgate Teams With Fandango and YouTube on Free Streamed Movies Benefit

Lionsgate is presenting “Lionsgate Live! A Night at the Movies,” a program of four Fridays of free movies streaming live on YouTube hosted by Jamie Lee Curtis, to help benefit theater employees furloughed by the COVID-19 crisis.

The studio is mounting the campaign to “honor the communal experience of watching movies in movie theaters and support the people who make those places great with a special program that reminds everyone how much we love going to the cinema,” according to a Lionsgate press release.

Beginning Friday, April 17, and continuing every Friday spanning four consecutive weeks, the studio will team with Fandango and YouTube to livestream four of Lionsgate’s most popular library titles — The Hunger Games, Dirty Dancing, La La Land and John Wick — on Lionsgate’s YouTube page and Fandango’s Movieclips YouTube page.

Host Curtis will share her own movie memories as she is joined by special guest celebrities and YouTube personalities, according to the release. Each week’s night at the movies will feature programming and interactive opportunities for fans, such as real-time fan chats via YouTube Live, live tweeting @Lionsgate and partners, and shared fan engagement opportunities in-show, including movie trivia and movie-themed challenges.

Lionsgate’s initial donation as well as audience and partner donations throughout the event will benefit the Will Rogers Motion Picture Pioneers Foundation, an organization dedicated to helping workers throughout the motion picture industry. The event will link to the Foundation’s charitable page so that viewers can donate. The Will Rogers Foundation is currently providing financial assistance to theater employees furloughed by the COVID-19 crisis.

The schedule of free movies that will livestream Fridays at 6 p.m. PST/9 p.m. EST is as follows: The Hunger Games April 17, Dirty Dancing April 24, La La Land May 1 and John Wick (age registration required) May 8.

To present the live movie event, in addition to Fandango Lionsgate is joining with exhibition partners such as the National Association of Theatre Owners, AMC Theatres, Regal and Cinemark Theatres, among other regional circuits.

Popcornopolis, purveyors of gourmet popcorn, will support the event with a consumer movie night offer, with 10% of sales donated to the Will Rogers Motion Picture Pioneers Foundation. SnackNation will curate a movie-themed snack box with a special price and free shipping.

Follow us on Instagram

“There’s nothing that will replace the magic of seeing a movie together with your fellow moviegoers in a theater on a big screen, but this is a chance for America to come together to recreate the experience,” said Joe Drake, chairman, Lionsgate Motion Picture Group, in a statement. “This is a great chance to show the country’s theatrical employees how much we miss going to their theaters and how much we support them. Jamie Lee Curtis — a woman who literally grew up with the movies and movie theaters — is one of the world’s biggest movie fans, so it’s a real thrill that she’ll be our host for this event. Let’s have some fun watching some classic movies together at home while celebrating moviegoing!”

Subscribe HERE to the FREE Media Play News Daily Newsletter!

“Throughout the 125-year history of the cinema, this is the first time that movie theaters have been shut down across the country,” said John Fithian, president and CEO, National Association of Theatre Owners, in a statement. “Whether it was the Depression, wars, disasters, or local calamities, movie theaters have always been a gathering place where audiences can come together to laugh and be moved, reacting as one, to put their troubles behind them or forget about their hard week at work, and just get lost in the amazing stories on the big screen. Until we can gather again in our nation’s theaters, we’re grateful to Lionsgate for honoring the theatrical moviegoing experience and we are thrilled to join together with them over these next four Fridays, not only to see four classic movies for free, but also to allow fans and celebrities to share their own moviegoing memories. We love that so many people will be talking about what makes going to the movies so unique and memorable.”

NATO Applauds $2 Trillion Stimulus Agreement

While passage of the $2 trillion stimulus bill in the U.S. Senate remains caught up in partisan bickering, the National Association of Theatre Owners March 25 said it applauded the bipartisan agreement announced earlier today.

“We applaud the agreement … to provide relief to movie theaters their employees and so many other public-facing industries that have had to close their doors due to the COVID-19 pandemic,” the trade group said in a statement. “With this agreement, movie theaters can look forward with confidence to re-opening and once again serving their communities when this crisis has passed.”

Follow us on Instagram

Details in unemployment benefits, which some GOP lawmakers say could incentivize workers to stay unemployed, remain a key obstacle in the bill getting through the Senate. If passed, it would have to be approved by the House and then signed by President Trump.

Regardless, NATO said the stimulus would provide a $454 billion loan guarantee fund providing access to capital and enabling movie theaters and other businesses to pay their fixed costs while they are unable to generate revenue through normal operations.

The bill would expand Small Business Administration programs enabling small businesses — or the majority of theater companies — to deduct several categories of expenses for loan forgiveness.

Subscribe HERE to the FREE Media Play News Daily Newsletter!

It would also afford deferral of payroll taxes, expanded opportunity for loss carrybacks for businesses, and technical corrections regarding qualified improvement property. Employee retention tax credit for businesses that keep people on the payroll despite closures or that see large sales losses. And up to four months of direct aid to workers through extended and expanded unemployment insurance, including increases in the weekly dollar amount and eligibility for part-time employees. It would also advance tax deductions to workers payable now.

“With this aid, movie theaters can get through this crisis confident in being able to re-open, knowing their vital, trained workforce is able to weather this pandemic and have jobs waiting for them when it is safe to reopen,” NATO said in a statement. “We look forward to its quick passage in the House and signature by the President.”

AMC Theatres Furloughs 600 Corporate Employees, Including CEO Adam Aron

Facing a disastrous business climate, AMC Theatres March 25 announced it was furloughing 600 employees at its corporate office in Leawood, Kan., including CEO Adam Aron.

The move is to save available cash, which the world’s largest movie exhibitor is hemorrhaging as its screens remain dark due to the global threat of the coronavirus.

“At this time, AMC is not terminating any of its corporate employees, however, we were forced under the circumstances to implement a furlough plan, which is absolutely necessary to preserve cash and to ensure that AMC can reopen our doors once this health crisis has dissipated,” AMC said in a statement.

Subscribe HERE to the FREE Media Play News Daily Newsletter!

In a previous interview, Aron said AMC doesn’t want bailout money. Instead he said the chain wants loans that banks are unwilling to give due to the current uncertainty of the theatrical business model.

AMC rival Regal Cinemas, which operates more than 7,000 screens,  has reportedly furloughed about 90% of its workforce.

With a formal vote in the U.S. Senate ratifying a $2 trillion stimulus bill that would give families, small and large businesses, and some industries a fiscal lifeline still to come, AMC, Regal and other exhibitors have their backs to the wall trying to reduce overhead.

“The furlough plan calls for reduced working hours at reduced pay, or no working hours at no pay, for the hopefully short period of time when AMC’s theaters are all closed,” read the statement. “This action impacts every corporate AMC employee, including all those at the highest executive levels and including AMC’s chief executive officer.”

The National Association of Theater Owners, an industry trade/lobbying group, contends the theatrical business qualifies as a “distressed industry,” thus qualifying for federal assistance.

Exhibitors Group to Congress: Pass $2 Trillion Coronavirus Relief Bill or Theaters Will Go Bankrupt

With U.S. Senate working through the weekend to finalize a $2 trillion-dollar coronavirus relief bill, the National Association of Theatre Owners says that without the relief most exhibitors will go out of business.

With the global pandemic crossing into the United States with a vengeance, all domestic screens are dark with no return to business as usual for the foreseeable future as state governors order residents to avoid congregating in groups larger than 10.

John Fithian, CEO of the exhibitors group, told Variety that without federal guarantees in the relief bill, theatres can’t get banks to forward loans to help carry them through the pandemic.

Follow us on Instagram

“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,” Fithian said.

Indeed, last weekend’s box office (through March 15) was the lowest in 20 years at less than $55 million. Most studios have delayed releasing major titles, while expediting other titles into retail channels sooner.

While the focus on the spending bill revolves around unemployment benefits, cash subsidies to people economically affected by the situation and  other issues, relief would be earmarked for some industries, including $150 billion for “severely distressed businesses.”

Subscribe HERE to the FREE Media Play News Daily Newsletter!

White House Economic Advisor Larry Kudlow, speaking to the media, said the stimulus package would likely equal 10% of U.S. economic output, or about $2 trillion. The bill would include $50 billion for airlines and $8 billion to cargo air carriers.

Media reports say the hotel industry wants $150 billion, the restaurant industry wants $145 billion. The National Association of Manufacturers wants $1.4 trillion. The International Council of Shopping Centers alone wants a guarantee upwards of $1 trillion.

It may depend whether the Senate (and the House) considers movie exhibitors essential to the economy in the short-term.

“The bailout requests are mind-boggling,” Dennis Kelleher, CEO of Better Markets, a non-partisan financial markets advocacy group, told CNN. “And it’s going to be a matter of who’s going to win and who’s going to lose.”

 

Theaters Seek Government Assistance for ‘Unprecedented’ Crisis

The movie theater industry is asking for Congress and the Trump Administration to urgently consider fiscal relief as it grapples with a global shut down of business operations due to the coronavirus.

In a March 18 statement from the National Association of Theatre Owners, the trade group said the immediate fiscal aid would allow exhibitors and its 150,000 employees to weather the present COVID-19 pandemic crisis.

Exhibitors, which include AMC Theatres and Regal Cinemas, are looking for loan guarantees to ease liquidity issues imposed by fixed costs in the face of non-existent revenue.

Follow us on Instagram

They also are seeking tax benefits to assist employers with providing support to employees; relief from the burden of costs that are ongoing despite closures; and additional tax measures that would allow theaters recoup losses when the industry is back up and running.

Simply stated: the current business model of the movie theater industry is uniquely vulnerable in the present COVID-19 crisis.

“As we confront this evolving and unprecedented period, we call on Congress and the Administration to ensure that America’s movie theater industry and its tens of thousands of employees across the country can remain resilient,” NATO said.

Subscribe HERE to the FREE Media Play News Daily Newsletter!

Separately, NATO’s executive board authorized $1 million dollars drawn from its reserve to aid movie theater employees who are out of work due to movie theater closures stemming from the COVID-19 pandemic. The money will be used as seed funds for an effort to help tide workers over in this crisis in cooperation with our industry partners. Details of the fund will be released shortly.