Movie theaters cling to vaccine news after coronavirus cataclysm

News of a potential coronavirus vaccine spiked the shares of movie chains on Monday. For the first time in a long time, it seems, cinema owners and investors are seeing hope for a sector decimated by the public health crisis.

“We haven’t heard good news in a while, and that’s good news without reservation,” says Rich Gelfond, CEO of Imax Entertainment. “This is potentially a game-changer. This allows us to better understand when and how this pandemic can end. “

Supported by the announcement, shares of AMC Theaters rose 51.4%, shares of Cineworld jumped 40.25%, shares of Cinemark climbed 45.17% and shares of Imax increased by 18.61%. To be fair, stock prices were only a fraction of what they were before the pandemic. For example, AMC closed the day at $ 3.77 a share, less than half of the shares traded in February.

Despite Wall Street’s outburst of optimism, the film industry still faces fierce headwinds. Box office revenues have plummeted since COVID-19 began to spread in the United States last winter. While cinemas in 48 states have reopened, many are still digging a very deep hole after being closed for much of the spring and summer and theaters in Los Angeles and New York remain closed. Some are on the verge of insolvency, with the National Association of Theater Owners (NATO) predicting as many as 70% of small and medium-sized theaters are at risk of bankruptcy early next year without federal assistance. That kind of lifeline can be hard to come by given that stimulus talks have largely failed and Congress is now entering a lame session as legislation tends to come to a halt.

“If the vaccine news is on the right track, it’s very exciting and it’s a very bright light at the end of the tunnel, but it’s a long tunnel and a lot of our businesses are barely breathing right now. terms of liquidity, ”says John Fithian, NATO CEO.

While Imax’s Gelfond has speculated that a vaccine could be widely available by April, there is reason to doubt this optimistic timeline. Pfizer, the pharmaceutical company behind the vaccine, is basing the results on preliminary data and is still being tested, although it has been shown to be 90% effective. It will likely be distributed to healthcare and other essential workers first, and the logistics of getting vaccines to hundreds of millions of Americans are daunting.

“It’s a fantastic step in the right direction,” said Eric Handler, media and entertainment analyst at MKM Partners. “The caveat is that full vaccine distribution will take time. We don’t know when it will be available or how long it will take [to administer widely]. It will probably take a few quarters for this to happen. “

There are other barriers to the exposure industry related to timing of vaccination. Some studios, such as Warner Bros. who had planned to make her “Wonder Woman 1984” debut in December, may now be inclined to delay the film’s distribution until a vaccine is in circulation. The logic is simple. Why risk losing tens, if not hundreds of millions of dollars by unveiling a blockbuster while a pandemic rages on when by postponing the start of a movie for a few months, you could be considering a very serious public health situation. different?

“If you ask me if it’s kosher to open [‘Wonder Woman 1984’] in December my answer is no, ”says Mooky Greidinger, CEO of Cineworld, which operates Regal in the United States. “If it happens in February [instead], I think it could be a huge movie. We don’t want to open it up and be disappointed. [By waiting,] the picture of vaccination will be clearer. “

For now, rescheduling “Wonder Woman 1984” would pose problems for cinemas, which are already struggling to find enough movies to play on their screens. Right now they’re trying to lure customers in with a mishmash of streaming service releases, independent tariffs and moldy tentpoles such as Christopher Nolan’s ‘Tenet’, now in its third month in business. rooms.

“The clock is ticking for many theater operators,” Handler says. “The hope is that they can survive and find interim funding that will last them until we get new content and a majority of the population is vaccinated.”

In the short term, however, the public health situation is dire. Coronavirus cases are on the rise in Europe, forcing countries like the UK and Italy to shut down their theaters, and public health experts predict the US is on the verge of being hit by another peak infections. It’s hard to see studios launching great movies in that kind of atmosphere.

“It’s all about controlling the coronavirus,” Tim League, founder of Alamo Drafthouse Cinemas, said in an interview ahead of news of the potential vaccine being announced. “Don’t be too political about it, but it will be difficult to have successful blockbusters until we as a nation have better control over the spread of the virus.”

Most theaters operate with losses which quickly become unbearable. Not only are moviegoers fearful of returning, but theaters are only allowed to operate at limited capacity due to social distancing restrictions. They have also borne additional costs associated with protecting their sites from COVID-19 – these include instituting additional cleanings, updating HVAC systems, and training their staff on new protocols.

“We’re talking about surviving in the space we’re in, not thriving as a business,” says Eric Kuiper, creative director of Celebration Cinema, a regional theater chain based in Michigan. Kuiper, like League, spoke to Variety before any news of a potential vaccine arises, but the difficult financial situation he and many other theater operators face will not be improved just by a positive vaccine trial.

Companies that are able to weather the storm believe film release will rebound significantly once the disease is under control. They point to the large number of major releases, from Marvel’s “Fast & Furious” “F9” sequel to Marvel’s “Black Widow” to Bond’s “No Time to Die” entry, which came in 2021. They also note that in countries such as Japan and China, where the coronavirus is in decline, cinemas are doing solid business.

“Where people feel safe and where they are safe, they are coming back to the cinema in record numbers,” says Gelfond.