Movie theaters in dire straits financially
The flow of films from Hollywood has dried up since the pandemic shut down theaters around the country in March. But that hasn’t stopped Waterworks Cinemas near Aspinwall and other independent movie houses in the region from firing up the popcorn machines and offering older movies like “Jaws” and “Back to the Future” on the big screen for $5 a ticket.
“Everyone wants to get out with friends and family and look for something to do,” said Katie Gancy, vice president of MovieScoop Cinemas, which owns the Waterworks and five other movie houses throughout Western Pennsylvania and Ohio.
Showing reruns of classic movies has kept dozens of Ms. Gancy’s part- and full-time employees working, but the revenue can’t come close to replacing the business a blockbuster movie generates at the regular evening ticket price of $9 or $10 for adult luxury seating.
Last year, about 340,000 people attended movies at Waterworks, according to the company. So far this year, about 80,000 have come — and that’s largely due to a strong first quarter that included pre-pandemic showings.
The lack of new movies comes on top of a litany of COVID-19 restrictions that make it difficult for many theaters to turn a profit — or even open their doors. The
industry is at a crossroads, with owners struggling to keep lights on and movie studios considering ways to bypass theaters and send blockbuster films directly to smaller screens.
But the movie industry’s largest trade organization isn’t betting on any radical disruptions in the foreseeable future. Last year, more than 1.2 billion movie tickets were sold at an average price of $9.11 each. Leaders of the National Association of Theater Owners don’t believe studios can expect that kind of revenue from smaller streaming fees if movie theaters fall out of the picture.
In the meantime, independent movie theaters have been showing classic flicks to crowds of no more than 20 people and scrambling to respond every time a new safety regulation comes from the state or another big film pushes back its opening date.
Tull Family Theater in Sewickley has had to postpone openings several times. The theater reopened on July 24 with screenings of “Cinema Paradiso” and hit Disney films such as “The Avengers” and “Zootopia” for $5 a ticket. The one-screen Hollywood Theater in Dormont is showing “Good Trouble,” the John Lewis documentary. The Manor Theater in Squirrel Hill has not reopened since shutting down in mid-March.
All must limit their audiences to 25% occupancy and follow other official orders related to safety, such as cleaning surfaces and requiring employees and customers to wear masks.
A large theater like the 22screen AMC Waterfront in Homestead could contain about 4,000 seats. Waterworks Cinemas had about 1,900 seats before replacing the old seats with 750 larger luxury reclining seats. The AMC Waterfront Theater and Cinemark theaters in Robinson and the North Hills remain dark.
The stock price for AMC Entertainment Holdings has fallen by about half from close to $8 at the beginning of March to about $4 now. The tumble for Cinemark Holdings Inc. has been worse: Its stock has plunged from around $32 in early March to about $12.
The Washington, D.C.based National Association of Theater Owners, which represents over 33,000 movie screens around the country, said in a recent announcement that most major chains will remain closed until the majority of the country emerges from shelter-inplace orders and theater owners have movies to show.
Waiting for movies
Frank Moses and his brother, George, the owners of New Castle-based Golden Star Theaters, have been unable to reopen a movie theater they own in Cumberland, Md., because that state hasn’t lifted its ban on movie theaters.
They also own theaters in Lawrence and Mercer counties that remain closed because those markets are so small that it wouldn’t make sense to try to open them and run older movies, Frank Moses said.
The only theater the Moses brothers currently have in operation is the Century Square Luxury Cinemas in West Mifflin, which they own through a partnership with MovieScoop Cinemas.
“We opened up [Century Square] to see how classic movies would do, and we found it’s not enough to support a profitable operation,” Frank Moses said.
He’s still hoping to see ticket sales grow: “It’s challenging, but we are trying to provide some entertainment to the market as well.”
The movie industry suffered another setback last week when Disney announced it was indefinitely postponing the debut of its live-action remake of “Mulan.”
The movie was scheduled to hit theaters in March, but as the pandemic dragged on, its release date was pushed back several times. Release dates for dozens of movies are being shifted because there just aren’t enough theaters open to make a profit on films that cost millions to make.
“They’ve postponed the next James Bond movie, too,” said John Harper, owner of MovieScoop Cinemas. “They need to make $1 billion worldwide on that movie. They need all theaters to play it in order to make those numbers. It’s too valuable a franchise to release it to 30 theaters as opposed to 30,000.”
Mr. Harper operates 65 movie screens in six locations. He recently spent heavily to modernize his theaters with oversized luxury seats that recline electronically. Now, state rules require that most of those seats stay empty.
He could still make a profit at 25% occupancy, he said, but he’s not getting that and doesn’t expect to reach it until new releases come out.
Theater operators keep about 43% of ticket revenue on new releases and make high profit margins on popcorn and other refreshments.
Campaigning for help
The National Association of Theater Owners recently started a campaign that inspired moviegoers across the country to send more than 200,000 letters to Congress urging lawmakers to pass the Restart Act. The bill specifically gives movie theaters access to partially forgivable seven-year loans covering six months of expenses.
During the pandemic, Hollywood studios have been experimenting with new ways to bypass movie theaters and deliver movies directly to consumers. Paramount sold “Lovebirds” to Netflix in March, becoming the first major studio to sell a movie that had been slated for theaters directly to a streaming service.
Ms. Gancy doesn’t believe movie studios will abandon theaters anytime soon because studios need ticket sales to support their big-budget films.
“Overall, it’s concerning to the industry that studios could do direct releases,” she said. “But we are taking a cautious approach to that due to the times we are in now. It’s hard to say where we’ll be six months from now.
“Some of the plans being made now may not be permanent going forward once the business comes back.”