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Could Movie Theaters Reopen by Early June? That’s the Optimism of NATO

A blockbuster summer is not impossible, according to the industry association — but theaters would likely follow 50 percent capacity rules.

The Aksarben Village movie theater is closed in Omaha, Neb., due to the coronavirus outbreakVirus Outbreak Nebraska, Omaha, United States - 18 Mar 2020

The Aksarben Village movie theater in Omaha, Nebraska is closed March 18.

Nati Harnik/AP/Shutterstock

Top brass from the National Association of Theatre Owners struck an optimistic tone during a webinar Friday, as VP Patrick Corcoran said he expects movie theaters to begin to reopen by late May or early June and ramp up to a summer blockbuster season beginning in July.

The webinar, hosted by NATO magazine Boxoffice Pro and viewed by exhibitors, concessionaires, theater vendors, and journalists from around the world, represented the latest effort by the trade group to offer guidance and soothe an industry facing an unprecedented crisis during the coronavirus pandemic.

According to NATO president John Fithian, “We anticipate when we first open cinemas back up anywhere in the world, we’ll have social distancing.” This would include enforcing 50 percent auditorium capacity, a measure that was common if brief, before US theaters closed their doors in March. “We’ll return to the very intense cleaning procedures and anything else the health officials recommend.”

His hope is that within a couple of weeks of reopening of theaters, they’ll be on “full blast.”

“We essentially need to go through the period where the government is confirming that the threat has been abated,” Fithian said.

That timeline coincides with the pandemic picture painted by President Donald Trump, who last week abandoned his earlier hope that things could return to normal by mid-April and extended social distancing guidelines through the end of the month. He suggested that by June 1, “a lot of great things will be happening.”

Other governments have less hopeful projections. In New York, the epicenter of the US outbreak, Governor Andrew Cuomo last month forecast the coronavirus’ spread could last up to nine months, with up to 80 percent of the population contracting the virus. And California Governor Gavin Newsom on Wednesday confirmed that school campuses will be closed for the remainder of the academic year, which runs through mid-June at some institutions.

Here are some key takeaways from the NATO webinar.

Government programs are a key source of relief

NATO is urging its theater-owner members to rely on government programs created as part of the $2 trillion stimulus bill to ease their pain. The group said they lobbied Congress to ensure theaters could enjoy some of the benefits. “We wanted liquidity for our members so they can get through this,” Corcoran said.

Among those are Small Business Association loan and grant programs, some of which are partly forgivable contingent on businesses retaining employees and keeping payroll going.

“The first thing I would say is you should be talking to your banker right now,” Corcoran said.

Moving forward, NATO expects to see some conflicts arise surrounding the number of programs in which businesses can participate. The group is lobbying officials to ensure rules are clear, and discussing additional stimulus programs in the pipeline.

Employees aren’t being paid, but retention is key

Nearly all of the 65,000-plus employees of the country’s three largest circuits, AMC, Regal, and Cinemark, have been laid off or furloughed. There’s also tens of thousands more who worked at small chains and local theaters.

“Taking care of the employees is equally important, and a key concern because we want them to stick with us,” Fithian said. “We want employees that are trained and believe in the cinema experience.”

For that, NATO is again counting on government assistance. The Will Rogers Motion Pictures Pioneers Foundation on Monday launched a fund with an initial $2.4 million to provide grants to exhibition workers facing financial needs due to the coronavirus outbreak.

To start, $300 grants are available to experienced workers — those with at least five years in the business. (Larger grants may be available on a case-by-case basis.) The money is meant to supplement government relief, such as the additional $600 per week for unemployment claims provided by the stimulus bill.

They don’t believe theatrical windows are in jeopardy

Closed theaters presented studios with a choice: Push back theatrical release dates or send movies straight to VOD. The most prominent example came when Universal announced last month it would release the animated musical “Trolls World Tour” for premium rental April 10. Fithian took pains to draw a distinction between the VOD debut of “Trolls” — which he described as a mistake — to on-demand movies that saw their theatrical runs cut short by theater closures.

"Trolls: World Tour"

“Trolls: World Tour”

Universal

Fithian downplayed the idea that the “Trolls” move represented a threat to theatrical.

“I’m very confident that for almost all distributors, almost all movies will get postponed,” he said. “We believe that was a bad decision, but one movie does not change a model. All the other movies are being postponed for later theatrical release.”

That assessment overlooked another film, the Kumail Nanjiani and Issa Rae-starrer “The Lovebirds,” which was scheduled for release by Paramount April 3 and is now heading straight to Netflix — theater chains’ public enemy number 1.

Asked what he’s been hearing from studios, Fithian said “The conversations are not suggesting significant changes in the business model. The conversations are how do we survive as an industry.”

They expect audiences to return to theaters en masse, but it will take an effort

Fithian cited the Gulf War as a would-be analog to the current pandemic; during that time, Israeli cinemas were closed. When they reopened, the population flocked to cinemas for months.

“We strongly believe there will be a rush to cinemas to see all kinds of movies because people will just want to connect with their family and friends once it’s safe to do so,” he said.

However, the Gulf War happened three decades ago — a time when the exhibition business was very different, and VOD didn’t exist. Also, the threats of war are very different than a pandemic.

Bobbie Bagby, executive VP at Texas chain B&B Theatres, said it’s key for cinemas to engage with their audiences online. She also suggested launching an industrywide campaign that rallies people behind a message of seeing movies together. It would encourage them to sign a pledge that they’ll head to the theater once the threat dissipates, and to sign up for an alert that lets them know when their local theaters open.

Tom Brueggemann contributed reporting.

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