Tale of two fates for movie theaters

Independent chains benefit from stimulus bill while larger ones receive no assistance

When Congress passed the coronavirus relief bill Monday, William Barstow had a very specific reaction: unrestrained glee.

“God, this is good news and God, do we need it,” he said.

Barstow owns six movie theaters, primarily in the Omaha, Neb., area. He was overjoyed at a provision in the bill that would grant eligible theater owners as much as $10 million to cover losses from a pandemic-stricken 2020. “Save Our Stages,” as the provision is known, allocates $15 billion to in-person entertainment venues as part of its $900 billion spending plan.

On that same day, however, AMC, the country’s largest movie theater chain, with 11,000 screens, was engaged in a very different action: restructuring how it elects board members with the aim of preventing a hostile takeover. The financially battered company would receive no stimulus money because the bill prohibits large or publicly traded companies from partaking. Regal and Cinemark, the country’s other two major theater chains, also would be left on the sidelines.

Though the 5,593-page stimulus bill passed with overwhelming margins in both houses of Congress, President Donald Trump has been harshly critical of perceived excesses in the proposed legislation, and it remains unclear whether he’ll sign it. Many of those excesses, however, fell under the broader spending plan to which the relief bill was attached; he did not mention “Save Our Stages.” It’s also possible that lawmakers have the votes to override a veto.

If Trump does sign the bill, it would conjure a tale of two movie theater fates. Independent entities, which make up half of the country’s 40,000 screens, would celebrate a cash infusion that could save businesses.

But large chains would be left staring into the abyss, inverting the 21st-century entertainment industry narrative that favors large corporate players.

“This bill causes mixed feelings,” said Patrick Corcoran, spokesman for the National Association of Theatre Owners. Through its lobbying efforts, the group secured the funds for theaters, which were not originally part of the package. “This grant is going to really help this industry,” he said. “But it will not help publicly traded companies, and they employ a lot of people, too.”

He called the restriction “shortsighted.”

The money offers theater owners a bright spot in a year that has seen screens go dark, customers stay away and studios withhold new releases, forcing theaters to renegotiate terms with lenders and landlords. The few theaters that have reopened have had to make do with minor movies — and audiences at 10 percent or 20 percent of their normal volume. The pandemic stopped in its tracks the dominant form of American in-person entertainment: In 2019, 268 million Americans and Canadians, or 76 percent, visited a movie theater at least once, according to the annual report of the Motion Picture Association; those moviegoers bought tickets to an average of nearly five films during the year.

In comparison, 150 million Americans went to at least one annual sporting event, according to a study of 2018 consumer behavior by the U.S. Travel Association.

Streamers rushed to fill the gap, increasing content and bolstering subscriber numbers. One studio, Warner Bros., has opted to move all its releases for the next 13 months, beginning with Wonder Woman 1984 this week, to its streaming service at the same time as in theaters.

The stimulus bill would ease the sting of all of those losses. Eligible theaters would be given up to 45 percent of their lost April to December revenue, capped at $10 million, in grants overseen by the Small Business Administration. They could then use that money to cover rent, payroll and other costs.