Theater Owners Chair Talks Opening L.A. and NYC Movie Screens Amid U.S. Virus Surge

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Ellis Jacob

"This pandemic has some very unusual impacts," National Association of Theater Owners chairman Ellis Jacob, who also runs the Cineplex chain in Canada, told The Hollywood Reporter.

After the release of Tenet and Mulan was pushed back again amid a surge in U.S. coronavirus case counts, Ellis Jacob, chairman of the National Association of Theatre Owners, has discussed efforts to reopen Los Angeles and New York City movie screens to the summer's biggest tentpole releases.

"The studios need their movies broadly released. They cannot release them in specific areas without others," Jacob, who is also president and CEO of the Cineplex chain in Canada, told The Hollywood Reporter on Tuesday. While movie theaters in around 40 U.S. states have got a greenlight to reopen, red still flashes for New York City and Los Angeles, the two largest markets in terms of box office revenue required for a meaningful return of the domestic theatrical movie industry this year.

"The challenge has been some states like New York, New Jersey and certain cities in California, and we at NATO are working to make sure those cities and states get the final okay to reopen and people can then come in and have a safe experience and those movies can open on the dates they are committed to," Jacob said of lobbying efforts by the main lobbying group representing exhibitors in partnership with Warner Bros. and Disney.

But key hurdles remain. On Monday, Los Angeles County health officials said there are "alarming increases" in positive COVID-19 cases and, as a result, L.A. Mayor Eric Garcetti has ordered a "hard pause" on the reopening of businesses, including movie theaters.

Jacob was speaking after the latest date for the release of Christopher Nolan's Tenet was pushed back — for the second time — and is currently set for Aug. 12. In the wake Tenet's shift, Walt Disney's Mulan, which was due for launch on July 24, is now being held until Aug. 21.

Elsewhere, indie company Solstice Studios has moved the thriller Unhinged from July 10 to July 31 and Sony has shifted The Broken Hearts Gallery release date again, this time from July 17 to Aug. 7.

Efforts to calm fears in a movie exhibition business hit hard by the COVID-19 crisis have been complicated by parts of the U.S. market setting single-day records for new coronavirus cases. And the pandemic spread is also impacting global markets key to the ultimate box office success of Hollywood tentpole releases.

"This pandemic has some very usual impacts. We are seeing increases in certain countries and decreases in others. It will be a matter of time where we see what transpires," Jacob explained. The irony is his Cineplex chain has begun to reopen its own theaters in Canada as that country has had broad success to date in flattening the coronavirus curve.

This past weekend, the first six Cineplex theaters reopened in Alberta with classic movie screenings and reduced ticket pricing. Like its U.S. peers, Cineplex is introducing strict hygiene and social distancing measures, including staggered seating, to ensure customers feel comfortable amid ongoing concerns about COVID-19.

Cineplex is also working towards having its circuit fully open in August, in time for the release of Tenet and Mulan. "The caution is you can only show library product for a period of time. You need the big releases to get our guests engaged and continuing to enjoy their experiences at the theater," Jacob said.

The reopening of its Canadian circuit follows Regal owner Cineworld calling off a planned $2.1 billion takeover of Cineplex. Earlier on Tuesday, Jacob told an analyst call after the release of his company's first quarter results the day before that he shared the "frustration and disappointment" felt by shareholders over the cancellation of the merger deal.

He reiterated that Cineworld breached its obligations under their merger agreement and that Cineplex would take the former U.K.-based suitor to court. Cineplex intends to file a statement of claim in an Ontario court in one week to "recover all damages available to us," Jacob said.

Cineplex has also inked a deal with its lenders for $250 million in new operating cash as its debt covenants have been relaxed while the Canadian chain continues to navigate the coronavirus pandemic. Jacob told THR that Cineplex would also take advantage of having diversified its movie theater business away from the ebbs and flows of Hollywood box office as it reopens its out-of-home entertainment destinations countrywide.

"We've got the Rec Rooms, the Playdiums," he said. "We've got our Cineplex digital media business, all those businesses will be stepping up."