'There's No Revenue Coming In' Says National Association of Theater Owners
The movie theater industry, which had already been suffering from declining ticket sales and competition from streaming services, is asking for financial relief from Congress as theaters have had to close their doors for the foreseeable future in an effort to slow the spread of coronavirus.
Industry group National Association of Theatre Owners is asking for government-backed loans from Congress to offset fixed costs of doing business, such as paying rent, according to a statement Wednesday.
Among the organization’s requests are tax benefits to help theaters support their employees, tax measures that would allow theaters to recover revenue losses during their closings, and financial relief from costs that are “ongoing despite closures,” according to the statement. The National Association of Theatre Owners said it has separately pledged $1 million to help theater employees recuperate lost wages.
“Theaters are pretty much everywhere; they’re a really big part of the fabric of our life,” Patrick Corcoran, the organization’s vice president and chief communications officer, said in a phone interview. “The whole purpose of asking for this help in the short term is when things get back to normal, things can really get back to normal.”
Movie theaters are the latest industry to seek help from the federal government as the U.S. and global economy reels from the fall out from coronavirus, which has sent stock markets tumbling and forced cities and countries into isolation or full lockdown to try to slow the spread of the illness. Retailers, hotels, airlines and cruise operators are among others seeking financial assistance to survive this period and open up again when the pandemic resolves. Congress has passed some relief bills and officials have said they are in discussions to pass another helping some businesses and industries.
The theater closures come at a time of broader struggle for movie theaters as a whole and could create even bigger challenges for the theaters trying to keep their doors open.
Between 2019 and 2020, the volume of movie ticket sales dipped by 5%, entertainment industry news outlet Deadline reports. Movie theaters are still figuring out how to weather the storm of competition from affordable streaming services such as Netflix and Hulu.
Movie studios have had some limited flexibility in adapting to this new era, as Americans are opting to stay home and practice self-isolation to further prevent the spread of COVID-19. Universal Studios announced it would make some of its theatrical releases available for at-home streaming starting as early as March 20.
Other studios announced they are postponing release dates for major films including Walt Disney Co.'s "Mulan" and Universal's "F9," the ninth film in the "Fast and Furious" franchise.
Movie theaters, meanwhile, solely depend on ticket sales and concessions for their revenue, Patrick Corcoran, the organization’s vice president and chief communications officer, said in a phone interview. AMC and Cineplex, a Canadian theater chain, have on-demand video services, but those platforms are hardly a drop in the bucket for the theaters’ overall financial health.
“There’s no revenue coming in,” Corcoran said. “Their business is people gathering in their place of business.”