Roundup: U.S. movie theater owners applaud stimulus package
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E-mail Xinhua, March 29, 2020
by Julia Pierrepont III
LOS ANGELES, March 28 (Xinhua) -- Movie cinemas may have historically weathered the storms of depressions, world wars, and the predations of digital media and streaming services, but they met their true nemesis in COVID-19.
With theaters shuttered for the foreseeable future, unpaid bills piling up and no ticket sales in sight, the COVID-19 pandemic has threatened to end the era of the shared cinematic experience.
In response to the frenetic clamor of thousands of theater owners on the verge of bankruptcy, U.S. lawmakers included them in their 2-trillion-USD stimulus package that had passed the Senate on Wednesday, the House of Representatives on Friday, and was signed into law by U.S. President Donald Trump Friday afternoon.
"Without this stimulus package, the entire exhibition industry was facing massive liquidity issues and certain bankruptcies," John Fithian, CEO of the National Association of Theater Owners and the industry's head lobbyist, told Xinhua.
"We are grateful for the work of Congress and the administration and those, in and out of the entertainment industry who have supported our efforts on behalf of this industry that is so central to our culture and civic life," said the association.
The bill's provisions include a 454-billion-USD loan guarantee fund that provides access to funds to enable movie theaters and other businesses to pay their bills while normal operations remain shuttered.
"It's fundamentally not a bailout. The federal government is not granting money to big corporations to stay alive. This is a loan guarantee system. The federal government is acting as the lender of last resort in circumstances where banks can't," Fithian said.
The association said the bill will also expand the Small Business Administration's expense categories eligible for loan forgiveness and it is purported to include provisions permitting the deferral of payroll taxes and provide tax credits for businesses that suffer massive sales losses or that retain and pay their workers during business closures.
It also includes a substantial increase in unemployment insurance benefits to the entire entertainment industry which is largely consisted of independent contractors and workers who go from gig to gig.
"This bill makes sure that workers can get through this crisis and that there are jobs for them when they're ready to go back to work," said Fithian. "This isn't going to go on forever."
The association's members applauded lawmakers for this bill, which will help the 150,000 entertainment industry workers who have been pink-slipped or furloughed without pay during the crisis.
"With this aid, movie theaters can get through this crisis confident in being able to re-open, knowing their vital, trained workforce is able to weather this pandemic and have jobs waiting for them when it is safe to reopen," the trade group said.
The association has been lobbying for government loans since traditional lenders like banks were unwilling or unable to extend theater owners lines of credit.
Banks refused to lend to them, citing the uncertainty surrounding how long the coronavirus outbreak would last, when theaters could safely reopen, and even how many theatergoers would be willing to come back when they did reopen.
The bill's provisions are envisioned to last through July, which Fithian believed will be sufficient time for the coronavirus outbreak to subside and for theaters in the country to reopen.
He pointed out that some Chinese theaters have reopened, though people there are not flooding into theaters yet and seem to be in "a wait-and-see" pattern.
"There's never been a situation like this," said Eric Handler, an MKM Partners analyst. "Fear of the unknown is never a good thing for stock prices. We will return to normalcy at some point, but as we ride this out, there's going to be near-term pain."
Industry analysts reported that the five largest theater chains in the country suffered an average 50 percent drop in market value just in the first two weeks of March, while Imax slipped by 41 percent.
But many industry insiders remain bullish on the survival of the theatrical exhibition market.
Movie fans "have demonstrated time and time again a desire to experience the magic and wonder of a larger-than-life immersive cinematic experience that can only happen in a large darkened auditorium among fellow moviegoers, enthralled in the on-screen action," Cinemark CEO Mark Zoradi assured investors recently.
"Without a doubt we will get to the other side," said Jim Orr, president of domestic theatrical distribution for Universal Pictures. "How long is all of this lasting? Nobody knows."
And Paramount Pictures Domestic Distribution President Chris Aronson told Variety, "I think theaters will survive... The landscape might be different, but it'll survive." Enditem
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