In times of pandemic crisis and economic catastrophe, we look for words of encouragement.
Here are seven words wholly unqualified for that job: “Default imminent, with little prospect for recovery.”
On April 2, Standard & Poor’s Globalfinancial analysts downgraded the already discouraging credit rating of the world’s largest movie theater chain, AMC Entertainment, to a CCC — “Default imminent, with little prospect for recovery,” in other words.
Does this hold true for moviegoing itself?
When AMC’s 11,000 screens in 15 countries worldwide reopen for business, along with the company’s competitors Regal, Cinemark and other currently shuttered venues, will millions of rattled customers return to moviegoing after months of moviestaying?
In mid-March, AMC Entertainment CEO and President Adam Aron announced a chain-wide shutdown. “It seems like an eternity ago,” he said Friday, at home in Kansas City. Aron is one of 600 AMC corporate employees furloughed on March 25. Like everyone below him on the command chain, he’s wondering when he’ll be back in business.
Initially AMC announced a six-to-12 week shutdown, “and we knew six weeks was the optimistic case,” Aron said. “Even then a three-month shutdown certainly seemed possible.” Now, he said, “mid-June seems possible but optimistic. The closure could extend beyond that.”
Aron declined to discuss S&P’s recent downgrading and a possible, widely speculated Chapter 11 bankruptcy restructuring for AMC. “We’re one among many companies all across the U.S. who still have costs and literally have no revenues,” he said. With the help of the federal $2.2 trillion coronavirus relief package on the way, he said, “we’ll see together how the economy builds back up.”
In the meantime, multiplexes remain dark. And not in an enticing, romantic, cinematic way. Just dark.
“Here’s my guess,” said Classic Cinemas CEO Chris Johnson, whose Chicago-area regional chain includes the Downers Grove Tivoli Theatre. “The earliest theaters can reopen in a meaningful way? I’d say June 15. If that’s the case it’ll be throwbacks, classics, old movies people love, since it’ll be another few weeks at least before the (fresh) studio product comes into play.”
The Warner Brothers summer title “Tenet,” the latest brain-bender from Christopher Nolan, remains on the studio release schedule for a July 17 launch.
For now, Johnson said, the Classic Cinemas ushers and concession counter staff are on furlough, though office staff and managers remain salaried even though, “as I like to say, I’m 100% revenue-free at present.”
Asked to contemplate a longer shutdown period, well into summer or into the fall, Johnson said: “Well! It could be devastating, even though we’re in a better position for a comeback than most. Let’s just say my hope is the holiday season will be bigger than ever, because people will have been cooped up a long time.” Johnson takes heart from longtime customers who’ve bought gift cards as a gift to the movie theaters, as much as to any one friend or relative.
“They have faith we’re going to be here when the movies return,” he said.
Since last month, the U.S. COVID-19 crisis has wreaked cinematic havoc like a ’70s disaster movie, featuring a villain visible only by microscope. But the film industry, begun in the late 19th century, has been courting death, dying and ruthless adversaries ever since.
“You can tick off the years when the industry went from death to life overnight,” said Columbia College associate professor Ron Falzone. “1927, sound comes in. 1948, United States v. Paramount Pictures: The U.S. Supreme Court rules against the studios owning their own theaters. 1952, that was the year the impact of television really hit hard, and Hollywood’s response was to go bigger with CinemaScope and stereophonic sound. Today it’s IMAX.”
Falzone’s crystal ball envisions “the coronavirus speeding up the process I thought was 10 years away, the point at which the movies are basically going to be either IMAX in theaters or streaming at home, straight to Netflix or the equivalent. We may not have the collective audience experience. But we’ll have the work itself.”
Needless to say AMC’s Aron disagrees.
“Not the likely scenario,” he said. “Movie theaters will resume operation. The question is when and how they’ll reopen. There are so many films in the pipelines right now, there’s be a tremendous amount of product in theaters. “
Clearly, Aron said, “social distancing is going to remain an important consideration when we reopen.” That suggests “we ought to put (the new movies) in more auditoriums, so that we can lessen the density of moviegoers in any one theater, so they’re not shoulder to shoulder with a stranger.”
Once it’s “safe to be communal again,” Aron said, “I think people are going to flock to venues away from home. They can only do that when it’s safe. But there’s going to be pent-up demand.”
Like Falzone, Northwestern University associate professor Ariel Rogers, who teaches in the Department of Radio, Television and Film, takes heart from cinema history’s “Perils of Pauline”-style death defiance. The early days of television, the mass consumption of VHS and home video — somehow the movies survived as a brick-and-mortar destination experience.
“As much as people get something from watching at home,” Rogers said, “there’s an appeal to theatrical exhibition that endures. Maybe it’s the big screen. Maybe it’s the communal experience. I think both will be especially appealing once we get out of this moment.”
On the other hand, Rogers said, during the nickelodeon era of moviegoing, “the fear of unsanitary surroundings was everywhere. And then came the so-called Spanish flu. The ‘picture palace’ era of moviegoing that flourished in the 1920s was partly a response to those fears.” Rogers’ books include “On the Screen: Displaying the Moving Image, 1926-1942,” an examination of various exhibition environments. “I’m someone who values cinematic experiences,” Rogers said.
Yet she spends a lot of her life teaching students for whom, as she said, “the standard way of experiencing movies isn’t in a theater. I think that’s why I wonder how much of a difference this (pandemic) will make to them.”
Classic Cinemas CEO Johnson imagines the 2020-2021 post-pandemic movie audience this way: “I bet one-third comes back strong. One-third doesn’t. And one-third, somewhere in between.” Those percentages sound fiscally daunting. And yet, he said, “even our little chain of 15 theaters, we have more attendance than the (Chicago) Cubs. We sell 3.6 million tickets a year. The Cubs do 3.1 million. Movie attendance is still pretty massive. I don’t think it’s going away.”
There’s this, though. The numbers Johnson cites belong to the pre-pandemic era of entertainment. The numbers for 2020 and beyond have yet to be tallied.