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.

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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.

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“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.”

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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.

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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.

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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.

 

Theater Trade Group Cautions Against Bypassing Traditional Window

Theater owners on March 17 took a swipe at plans by some studios to bypass the traditional theatrical release window and make new films immediately available for home viewing as a means of contending with the closure of theaters amid the coronavirus pandemic.

The National Association of Theatre Owners (NATO) issued a statement blasting the practice, although the group was careful not to blame the studios but, rather, “speculation in the media that the temporary closure of theaters will lead to accelerated or exclusive releases of theatrical titles to home streaming.”

“Such speculation ignores the underlying financial logic of studio investment in theatrical titles,” the NATO statement said. “To avoid catastrophic losses to the studios, these titles must have the fullest possible theatrical release around the world.

“While one or two releases may forgo theatrical release, it is our understanding from discussions with distributors that the vast majority of deferred releases will be rescheduled for theatrical release as life returns to normal. When those titles are rescheduled, they will make for an even fuller slate of offerings than normal as they are slotted into an already robust release schedule later in the year.”

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Universal Pictures on March 16 announced the immediate release of its current theatrical slate into home entertainment distribution channels, at a premium price of just under $20. Movies include The Invisible Man, The Hunt and Emma, among others.

The DreamWorks Animation Trolls sequel Trolls World Tour, distributed by Universal Pictures, will now hit theatrical and home entertainment channels on April 10. Titles will be available on assorted digital channels for a 48-hour rental period at $19.99 each.

A day later, on March 17, Variety reported that Warner Bros. is prepping the early (March 24) transactional video-on-demand release of Harley Quinn: Birds of Prey, featuring Margot Robbie as the DC Comics antihero. The film was released theatrically less than two months ago.

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The NATO statement noted that “as the virus takes hold in different regions at different times and in varying degrees of severity, people and public health officials are grappling with decisions about when to close public-facing businesses and when to restrict personal activity. As with other businesses that serve large groups of people, movie theaters have faced voluntary and mandated restrictions and closures. The majority of movie theaters have now closed.

“This industry will continue to meet its responsibilities to the public and will abide by public health mandates and adapt to local conditions. Our partners in movie distribution have postponed major new releases in response to the Coronavirus situation in markets around the world. Other titles beyond the immediate horizon have not changed their release dates.”

View the complete NATO statement here

 

Platforms Avoid Netflix Movies in Pre-Oscar Showcases

Netflix earned an impressive 24 Oscar nominations ahead of the 92nd Academy Awards on Feb. 9 — largely around two movies: Martin Scorsese’s The Irishman and Noah Baumbach’s Marriage Story.

Walmart-owned Vudu.com and exhibitors Cinemark, AMC Theatres and Regal Cinema have launched pre-Oscar events showcasing best picture nominated films — with the exception of Netflix’s titles.

That’s because Netflix — per longstanding policy — does not abide by Hollywood’s traditional theatrical release strategy affording exhibitors exclusive 90-day access. Instead, the streamer mandates all original movies be made available across all distribution channels (including theatrical) at the same time.

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This has angered exhibitors and industry insiders domestically and abroad (i.e. Cannes Film Festival) for years — the result being Netflix movies are largely ignored by major theater chains.

Indeed, Cinemark’s “Annual Oscar Movie Week Festival,” which runs from Feb. 3 to 9, enables consumers (for $35) to screen all nominated films — with the exception of Netflix’s titles. Vudu is taking preorders for Oscar-nominated titles, with the exception of The Irishman and Marriage Story (which have not been slated for a digital sellthrough release).

“I don’t see the utility of making a film available on VOD or in theaters, if it’s available for free to anyone with a subscription or trial account at Netflix,” said Wedbush Securities media analyst Michael Pachter. “Netflix would rather people sign up for a free trial and watch these films than it would care for the 50% to 65% it might earn from a movie ticket or VOD.”

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Last year, Netflix’s first Oscar nominated best picture title, Roma, was also ignored by major exhibitors. It went on to win for best director (Alfonso Cuarón) and best foreign-language film (Mexico’s first) — but no best picture. The movie reportedly generated about $200,000 in revenue from pre-nomination screenings over the extended Thanksgiving weekend at select indie theaters in Los Angeles.

The imbroglio made headlines when director Steven Spielberg suggested movies that forgo the traditional theatrical run should not be considered for Oscars. The Academy’s annual board of governors post-Oscar meeting nixed that idea.

Netflix responded (on Twitter) at the time stressing “we love cinema” and ubiquitous distribution. “These things are not mutually exclusive,” the streamer tweeted.

While Roma did become Netflix’s first film to be included in The Criterion Collection on Blu-ray Disc and DVD (due Feb. 11), it arguably left millions of dollars in box office revenue on the table.

“If Netflix wants to really be a movie company, and not just a highly successful television company, why won’t they consider the traditional movie business model?,” John Fithian, CEO of the National Association of Theater Operators, wrote in a 2018 blog post. “Wouldn’t Netflix make more money and establish a much deeper cultural conversation by offering a true and robust theatrical run first, and offering exclusive streaming to its subscribers later?”

 

NATO Boss Chides Press for Streaming Video Focus

NEWS ANALYSIS — Helen Mirren may have gotten the most attention at this week’s CinemaCon confab in Las Vegas for her snarky, “I love Netflix, but f*** Netflix,” comment.

But for John Fithian, president of the National Association of Theater Operators, media attention to over-the-top video and home entertainment is no laughing matter. Fithian reportedly told reporters that continued attention to streaming undermines success at the global box office, which topped $41.7 billion in 2018 – up 32% since 2010.

NATO president John Fithian

“There’s no doubt that home entertainment consumption moves toward streaming [from disc] more with each passing day,” Fithian told attendees. “How does any given movie stand out among endless choices in the home? A robust theatrical release provides a level of prestige that cannot be replicated.”

He cited a study conducted by Ernst & Young that found consumers who frequent movie theaters consume more streaming video in the home.

“Streaming and theatrical don’t just co-exist, they reinforce each other,” Fithian said.

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Of course the executive was channeling Netflix, which didn’t attend CinemaCon, but whose looming industry presence continues to undermine the theatrical window releasing movies into streaming channels concurrent with any cinema exhibition.

The practice has roiled exhibitors in the U.S. and France, which have boycotted Netflix movies and challenged its award nominations, notably at the Cannes Film Festival. Regardless, the Motion Picture Association of America recently accepted Netflix among its studio members.

Indeed, Netflix is hardly the only streaming threat. With Disney, WarnerMedia and Comcast set to launch branded SVOD platforms, direct-to-consumer distribution and original content remains a threat — a reality Disney CEO Bob Iger has taken steps to address by insisting the perennial domestic box office leader will remain faithful to the theatrical window.

“We have a studio that is doing extremely well and a [release window] formula that is serving us really well in terms of its bottom line,” Iger said on last November’s fiscal call.

With Kevin Tsujihara out at Warner Bros., efforts to release studio films early into homes through premium VOD are likely over.

Tsujihara, who was forced out following a sex scandal, was initially promoted to the chairman position in large part because of his expertise advocating for alternative distribution channels while heading Warner Bros. Home Entertainment.

Theater Group: Netflix Doesn’t Hurt Exhibitors

Netflix’s adamant strategy to release original feature films concurrent with theatrical distribution is not hurting exhibitor business, according to the National Association of Theatre Owners.

In fact, data from a survey of 1,400 respondents conducted by Ernst & Young found consumers of over-the-top video services are frequent moviegoers – well above non-streamers.

Respondents who watched at least one theatrical release in 2017, also streamed at least one hour of video per week. The ratio increased among avid moviegoers. Indeed, 33% of respondents who watched nine movies in the theater, also streamed at least 15 hours video per week.

“People who consume a lot of content do so across multiple platforms,” NATO spokesperson John Fithian wrote in a recent blog post. “The movie industry is not a zero-sum game.”

Fithian said it could be argued that Netflix undermines broadcast television and transactional VOD markets. Streaming services, Fithian said, can work “hand-in-hand” with exhibitors.

He cited Amazon’s decision to adhere to the tradition 90-day theatrical window for original movies, Manchester by The Sea and The Big Sick– the former generating Amazon industry awards (Best Actor for Casey Affleck and Best Screenplay for director Kenneth Lonergan in Manchester) attention, in addition to domestic box office tallies of $48 million and $43 million, respectively.

Fithian argues Netflix is leaving money on the table bypassing theaters, which have largely boycotted the SVOD pioneer’s movies due to its distribution edict.

Netflix has reversed course this year on original movies Roma and The Ballad of Buster Scruggs– titles the streaming service is heavily lobbying for Oscar contention in 2019 – reportedly at the behest of directors Alfonso Cuarón and Joel and Ethan Coen.

Both titles have received limited exclusive theatrical distribution in an effort to satisfy Academy Awards voters.

NATO cited distributor Neon, which last year reportedly turned down $12 million from Netflix to release I, Tonya in theaters. The film went on to generate Oscar nominations, including Best Supporting Actress win for Alison Janney and sell $30 million in domestic movie tickets.

“The transactional value for film is diminished [by Netflix’s model],” Neon founder Tom Quinn told IndieWire. “It’s an all-you-can-eat buffet, you can dip in and out, and if you don’t like a movie, you move on.”

NATO’s Fithian said exhibitors would welcome Netflix into the foldif it respected the theatrical window.

“Filmmakers and movie lovers will appreciate Netflix so much more,” he said.

 

Theaters Partnering for Online Content, Live Event Service

A consortium of independent theatrical venues and the National Association of Theatre Owners trade group are partnering for an online platform offering alternative content and live streaming events.

Dubbed “MyCinema.live,” the broadband platform is officially launching at Cinemacon 2018 through April 26 in Las Vegas.

Theaters and Cinema Buying Group-NATO are working with digital TV unit NAGRA to deploy the technology they claim will “revitalize” their operations, expand their customer base and enhance the cinema-going entertainment experience.

With the rise of over-the-top video, mainstream and smaller theatrical chains have seen attendance diminish for non-blockbuster movies. Theatrical attendance in the U.S. and Canada in 2017 fell to its lowest point since 1992, according to industry estimates.

MyCinema enables theaters to more easily offer a broad range of alternative content and live events, including live musical events, sporting events and Broadway shows, faith-based programming and independent films, as well e-sporting events and leagues.

For example, the Georgia Theatre April 21 streamed the annual G-Day: UGA Spring Football Game for fans unwilling to the watch the event live at nearby Sanford Stadium.

“The imagination is the only limit and the programming library theater management can choose from is growing constantly,” Bill Campbell, managing director of NATO’s Cinema Buying Group, said in a statement. “This is an exciting new evolution in theatre programming.”