On March 12, the London premiere of Mulan had just wrapped when the film’s director Niki Caro received the call everyone was anticipating. Executives in Los Angeles had made the decision to pull the Disney tentpole and were about to make the announcement, scuttling plans for a European junket that had just kicked off. The move didn’t come as a surprise. After all, less than a day before, President Donald Trump announced a new ban on most travel from Europe, aimed at stopping the spread of the coronavirus. That travel ban torpedoed any plans to promote the $200 million film in the lucrative European market. And with 70,000 theaters still shuttered in China and U.S. cinemas looking iffier by the minute, Disney had no alternative.
The dust is far from settling on the economic impact of the coronavirus pandemic. But early estimates indicate that the blow will be unlike anything Hollywood has experienced before and losses will well eclipse the eleven-figure mark, even if conditions remain the same instead of taking a turn for the worse.
As it stands now, the global box office has already taken a coronavirus hit of at least $7 billion. If the remainder of March, April and May are included, lost revenue would climb another $10 billion, making a total loss of approximately $17 billion. And if the crisis continues beyond May, all bets are off.
But taking wide-release films off the schedule also doesn’t come cheap. MGM pushed the upcoming James Bond outing No Time to Die to November, a move that will likely cost $30 million to $50 million considering that ad buys are made in advance and make-goods are not a given as several studios are in the same boat, having pulled ads at the last minute. A Quiet Place II’s abrupt cancellation eight days before release will cost Paramount some $30 million (unlike with Mulan, A Quiet Place II director John Krasinski and the producers were involved in the decision-making process to hold off on releasing the film until the global pandemic has subsided).
With A Quiet Place II, insiders were stunned by how fast the postponement happened. "As of [Wednesday], we were all systems go. In less than 24 hours, it was over," a source said. One source pegged the total at less than $10 million. Mulan, No Time to Die and Universal’s Fast and Furious 9, which is shifting to 2021, all took out Super Bowl ads, a collective $15 million wiped out. Because F9 was more than two months from release, its losses will be smaller than those of others.
But with large swaths of theaters across the world having been shuttered in recent weeks, stretching from Japan to Italy, studios were looking at major box office losses if they released the films. In the case of No Time to Die, that could have resulted in a minimum of 30 percent shaved off the final box office tallies — a possible $300 million out of a likely $1 billion global haul. Mulan likely was looking at an even greater sum given that the film was specifically aimed at Chinese moviegoers.
That’s to say nothing about the number of big-budget films that have seen production interrupted. On Friday, Disney announced that it will "pause" a number of productions for "a short time," including Marvel Studios’ Shang-Chi and the Legend of the Ten Rings, which is shooting in Australia, and the live-action Little Mermaid film in London. Warner Bros. halted preproduction on its Elvis Presley biopic — also slated to shoot in Australia — after star Tom Hanks tested positive for COVID-19. Sources say a production shutdown on films like Shang-Chi and Little Mermaid would set back Disney about $300,000-$350,000 a day. "It's not like you can stop on a dime," says one producer. "You need to keep department heads going and maybe a level down from there through the hiatus."
Meanwhile, it is unclear any of the losses will be covered by insurance. "If we are talking in terms of protecting lost revenue due to enforced shutdown or scale-down of operations, some property policies may offer limited amounts of coverage, although many have specific communicable diseases exclusions," said attorney John Tomlinson, who specializes in insurance and risk management law.
On the TV side, putting a price tag on any losses — or gains given that the amount of time spent tuning in may rise among the newly homebound — may be harder to pin down. Per sources, hundreds of scripted and unscripted series have shut down production for at least two weeks as a precautionary measure. Many scripted series, specifically on the broadcast side, were nearing the end of production on their current seasons. Some accelerated production to wrap the season, while others may see their orders trimmed in a bid to cut costs associated with resuming production following a shutdown.
Then there’s the industry’s annual upfronts in April and May, with all major companies abandoning live presentations for streaming events. With scores of pilots having also shut down production, it’s unclear if there will be any new fare to present to Madison Avenue ad buyers who typically spend north of $6 billion during the May upfront period. It’s also fair to expect sizable financial losses as events like March Madness (CBS) and possibly the NBA Finals (ABC) are also being impacted. “I don’t want to see broadcast TV fall apart. Thank God it’s not football season, if it was, they’d be fucked,” groused one top agency source, who noted that the pandemic has not yet impacted deal making.
Broadway, too, is being hammered. The monthlong shutdown will result in lost revenues conservatively estimated at $100 million. What remains to be seen, meanwhile, is if cast and crew will be paid as plays, TV shows and film shoots increasingly go dark.
As THR reported, the stage performers union Actors Equity called on federal and local officials to help affected arts and entertainment workers as they face lost income, health insurance and retirement savings.
“Equity members are dedicated professionals who earn their health care and pensions one week of work at a time,” Equity executive director Mary McColl said in a statement Thursday. “Today’s decision [by New York Gov. Andrew Cuomo] means tremendous uncertainty for thousands who work in the arts.... Now is the time for Congress and local governments to put workers first to ensure that everyone who works in the arts and entertainment sector has access to paid leave, health care and unemployment benefits.”
Likewise, IATSE also is urging the federal government to step in to address the economic fallout for entertainment workers whose events and projects have been canceled because of the pandemic.
“Right now, thousands of our members across all sectors of the entertainment industry are suffering financial hardship because of government mandated cancellations. Entertainment workers shouldn’t be collateral damage in the fight against the COVID-19 virus,” said IATSE international president Matthew D. Loeb. “But this isn’t just about us. Economic studies demonstrate that entertainment spending reverberates throughout our communities nationwide. Film and television production alone injects $49 billion into local businesses per year, and the overall entertainment industry supports 2.1 million jobs in municipal and state economies.”
The American Federation of Musicians weighed in as well.
"To minimize the damage the virus response will have on musicians and other gig economy workers," said union president Ray Hair, "AFM is calling on Congress and other lawmakers for immediate action to provide economic relief including expanding leave benefits, unemployment benefits, and an immediate moratorium on evictions, foreclosures and utility shut-offs."
Other entertainment unions, notably SAG-AFTRA, the Directors Guild of America and the Writers Guild of America West and East, do not appear to have joined the calls for government relief.
Pamela McClintock, Ashley Cullins and Jonathan Handel contributed to this report.