New York governor is holding off on plans to reopen movie theaters, which could close off a major market that blockbusters need for box office success
Plans to revive the movie theater business could begin to unravel after New York Gov. Andrew Cuomo announced this week that several types of businesses will not be able to reopen on schedule, including movie theaters.
Cuomo’s decision, combined with news of COVID-19 infections surging in a number of major markets, may force Disney and Warner Bros. to reconsider releasing their $200 million-plus blockbusters next month — “Mulan” and “Tenet.”
While New York remains one of the few U.S. states to not see COVID-19 infections surge in recent weeks, Cuomo late Tuesday made the decision to delay openings of theaters, gyms, casinos, amusement parks and skin care services in response to record numbers of daily new infections throughout the U.S. On Wednesday, a new record of over 38,000 new infections was reported nationwide.
Exhibitor Relations analyst Jeff Bock noted that the latest COVID-19 surge has been especially concerning in California, Texas and Florida, three states that also rank alongside New York as major contributors to the domestic box office. If either “Mulan” or “Tenet” moves, that creates a major problem for thousands of theaters that are banking on those two blockbusters to bring back some revenue after months of closures.
“We’re four weeks out from ‘Mulan,’ and there needs to be advertising,” Bock said. “Not having New York, possibly not having Los Angeles or San Francisco, and Florida surging in infections again are all bad news. Unless things taper off over the next two weeks, I can’t see Disney having any choice but to move again.”
Over the past month, studios and movie theater owners have remained optimistic both publicly and privately about getting cinemas open again by late July. Even the surprise move by Warner Bros. to move Christopher Nolan’s “Tenet” back from July 17 to July 31 was no cause for concern, as the studio also announced that it would re-release Nolan’s 2010 film “Inception” with sneak peek footage from “Tenet” in an effort to promote the film.
Major theater chains AMC, Cinemark and Regal all announced timetables to reopen their locations, later adding the requirement for moviegoers to wear masks after a social media backlash.
But in his announcement, Cuomo raised concerns about infection rates in states that have more aggressively reopened businesses, and said that more information is needed about how COVID-19 can spread in theaters and other businesses where people are indoors and in close proximity to groups for prolonged periods of time. It’s unclear whether he might be confident that theaters in the biggest U.S. market are safe to reopen in time for the current schedule of new releases.
“We are continuing to study malls, movie theaters and gyms,” Cuomo told reporters during a press briefing on Wednesday. “We’re looking at what happened in other states. There are some reports that malls, bars, certain social clubs with air conditioning — that air conditioning may not be cleansing the air of the virus and just recirculating the virus. As soon as we get some more information we will make an informed decision.”
There are other factors compounding Disney’s “Mulan” dilemma. Two weeks ago, the Chinese government backed off of plans to reopen theaters in Beijing after an outbreak was reported in the capital. President Xi Jinping has not indicated when theaters might be able to reopen anywhere in China, a market that is especially critical to Disney’s box office hopes for “Mulan.” Even if the infection rate in the U.S. were to miraculously taper off before July 24, not having a simultaneous release in China would be a major blow to the film’s bottom line due to the prevalence of piracy in the country.
Then there’s the other big reopening plan Disney is struggling with: its theme parks. On Wednesday evening, the company announced that it was postponing its plans to reopen Disneyland on July 17 with no new reopening date set. The announcement came hours after the Coalition of Resort Labor Unions, which represents about 17,000 Disney theme park workers, scheduled a protest in Anaheim this weekend against the reopening. Meanwhile, in Florida, Walt Disney World employees have circulated a petition asking Disney to back off of plans to reopen the Orlando resort starting on July 11.
While going on Big Thunder Mountain and going to see “Mulan” aren’t the same experience, Bock notes that Disney is relying on families for the success of both their parks and their films. This lack of confidence in family turnout to movie theaters is believed to be one reason why another kids’ film, Paramount’s “Spongebob Movie: Sponge on the Run” was pulled from an August theatrical release earlier this week and moved to a streaming release on CBS All Access in 2021.
“If Disney moves back the date for theme parks, I don’t know how they cannot do the same for their movies,” Bock said. “Given how quickly the virus has spread in so many parts of the country, I think it would be irresponsible for Disney to say that families are safe being out in these public environments.”
For Warner Bros., releasing “Tenet” isn’t quite as complicated. The cryptic sci-fi film isn’t aiming for families. It is aiming for adult audiences, particularly millennial and Gen X males. These demographics have indicated in surveys that they are less concerned about the virus than women and older age groups and may be more likely to turn out to see Nolan’s latest film, even if they may not do so in the first few weeks of its theatrical run.
But the possibility of not having New York theaters open by the film’s July 31 date is still a big risk for any blockbuster. Combined, Los Angeles and New York City can account for up to 20% of a film’s opening weekend, and the general consensus in Hollywood is that both markets would need to be open for major films to be released again.
With Nolan adamant on having “Tenet” released as soon as possible to help support movie theaters, one rival distribution head who spoke to TheWrap on condition of anonymity said that Warner Bros. may move forward on releasing the film even if New York isn’t ready by July 31 depending on how other markets look.
“If only New York City is closed a month from now but the rest of the state remains open, I could see WB moving forward,” the distributor said. “Even if the whole state is closed, they might still go as the film will be in theaters for months.”
But Bock warns that this would put greater pressure on other major markets to perform. In California, movie theaters have been given the clear to reopen with the exception of the Bay Area. Meanwhile, hospitalizations in Los Angeles County have begun to rise again after weeks of decline, topping 2,200 for the first time since May 15. Even if these surges in California and other states don’t lead governors to pump the brakes on theaters reopening the way Cuomo has, it could make general audiences more reluctant to return to theaters even if big films are on screens.
“What’s going on with COVID right now is something that is going to reverberate through the walls of all the studios,” Bock warns. Even now, nobody knows what the right thing to do is, and it’s near impossible to make marketing spends that require weeks of preparation when we don’t know what the pandemic is going to look like even a few days from now.”