U.S. Theaters Stare Down Worst-Case Scenario for 2020

With New York and Los Angeles cinemas still shuttered, "the business feels dead" as studios pull major tentpoles and New York Gov. Andrew Cuomo comes under fire for keeping N.Y.C. cinemas closed.

There’s a new public enemy No. 1 among theater owners and some Hollywood studio executives: Andrew Cuomo. The New York governor, who generally has received praise for his handling of the pandemic, so far has refused to let theaters open even as indoor restaurants, casinos and gyms are allowed to flip on the lights.

“We’ve had a request to put all of our CEOs on a conference call. He wouldn’t schedule it. And there are very senior Hollywood executives who have placed calls to him and ended up speaking with his staff, not him. Nothing. Crickets,” says John Fithian, president and CEO of the National Association of Theatre Owners. “He’s put us in a category with big music concerts. That’s absurd.”

Fithian's frustration — which is being felt across the film business — spilled over on Oct. 4, when London-based Cineworld, the world’s second-largest circuit and parent company of Regal Cinemas, stunned the film business by revealing that it is temporarily closing all of its locations in the U.K. and U.S.

A rise in COVID-19 cases in parts of the European Union and Canada — cinemas in Dublin and Quebec had to shutter in recent days — also has spurred alarm. (AMC Theatres, the world’s largest circuit, said Oct. 6 it has no plans to temporarily close. Ditto for mega-circuit Cinemark.) New York is just one front in the battle to revive moviegoing, but it’s crucial to winning the war to convincing consumers that returning to the multiplex is safe (cinemas in L.A. also remain closed).

Cineworld took direct aim at Cuomo for its decision to close, saying that studios won’t dare release another big tentpole without New York following the subdued performance of Christopher Nolan's Tenet, which is the first big-budget event pic to brave the waters in the COVID-19 era.

Richard Azzopardi, senior adviser to Cuomo, responded to the criticism in a tersely worded statement: “We understand some people are unhappy, but you know what? Better unhappy than sick or worse.” Fithian shot back, telling THR that New York is “out of touch.” The top lobbyist further noted that health officials in 48 out of 50 states have allowed cinemas to reopen. Circuits have spent tens of millions on new social distancing, air ventilation and safety protocols. Cuomo's administration has been briefed on the new policies but so far has not budged. "We're moving heaven and earth trying to stop a second wave and people need to acknowledge that we're still in a pandemic and start to act like it," Azzopardi continued in his statement.

For Cineworld, the last straw was MGM and Universal’s decision to push the James Bond pic No Time to Die from Nov. 20 to April, all but erasing hopes of a box office recovery before Christmas. And that’s if Wonder Woman 1984 sticks to its Dec. 25 date. “My guess is all theater operators will now have to decide whether it is better to shut down or run at 10 percent capacity with one or two screenings a day so as to remind people you are still here,” says Wall Street analyst Eric Handler of MKM Partners. The hope now is that moviegoing will resume in earnest in the first quarter of 2021.

There are select markets that have enough local product to prosper — China, Japan, South Korea and India being the leaders — but the marquee in most other countries is bolstered, or supplemented, by Hollywood fare. “The U.S. is the world’s supplier of content. Being able to get movies out there is essential for theaters all over the world,” says studio exec and Imax Entertainment president Megan Colligan.

Christopher Nolan’s $200 million Tenet had hoped to reignite the global box office, but that wish remains unfulfilled. Warner Bros. first opened the tentpole overseas in late August, but its subsequent poor performance in the U.S. diminished its profile everywhere. To date, Tenet has earned $263 million at the foreign box office. While no small sum, that trails the $508 million grossed by Interstellar, or the $337 million earned by Dunkirk, Nolan’s last two films. The movie’s domestic tally is a tepid $46.1 million.

“I suppose Bond moving was inevitable. The domestic marketplace is far from being in a good place, and there are rising COVID-19 cases across Europe. With such uncertainty, no one wants to risk releasing another big movie,” says box office analyst Robert Mitchell of analytics firm Gower Street.

While movie ticket sales overseas hit $30.8 billion in 2019 versus $11.4 billion domestically, the pandemic reveals how crucial Hollywood’s underlying health is to the global film business. “A lot of the world relies on Hollywood movies. The countries that have done the best have local content. It's a chicken-and-egg situation. No studio wants to be the first to risk releasing a big-budget picture especially after the results for Tenet," notes Mitchell.

Adds a frustrated Hollywood studio exec: “New York and L.A. are about more than just moviegoing. Not having them open is murder because they are the cultural centers of America. When they aren’t open, the business overall feels dead.”

A version of this story first appeared in the Oct. 7 issue of The Hollywood Reporter magazine. Click here to subscribe.