According to a new report from the Hollywood reporter, with “social distancing” guidelines being instituted to deal with the global coronavirus pandemic, Hollywood may take a $20 billion dollar industry hit.
Hollywood reporter reports taking wide-release tentpoles off the schedule doesn’t come cheap, nor does shuttering production on hundreds of scripted and unscripted TV series — and what happens to the unemployed workers?
On March 12, the London premiere of Mulan had just wrapped when the film’s director Niki Caro received the call everyone was anticipating. Executives in Los Angeles had made the decision to pull the Disney tentpole and were about to make the announcement, scuttling plans for a European junket that had just kicked off. The move didn’t come as a surprise.
After all, less than a day before, President Donald Trump announced a new ban on most travel from Europe, aimed at stopping the spread of the coronavirus. That travel ban torpedoed any plans to promote the $200 million film in the lucrative European market. And with 70,000 theaters still shuttered in China and U.S. cinemas looking iffier by the minute, Disney had no alternative.
The dust is far from settling on the economic impact of the coronavirus pandemic. But early estimates indicate that the blow will be unlike anything Hollywood has experienced before and losses will well eclipse the eleven-figure mark, even if conditions remain the same instead of taking a turn for the worse.
As it stands now, the global box office has already taken a coronavirus hit of at least $7 billion. If the remainder of March, April and May are included, lost revenue would climb another $10 billion, making a total loss of approximately $17 billion. And if the crisis continues beyond May, all bets are off.
But taking wide-release films off the schedule also doesn’t come cheap. MGM pushed the upcoming James Bond outing No Time to Die to November, a move that will likely cost $30 million to $50 million considering that ad buys are made in advance and make-goods are not a given as several studios are in the same boat, having pulled ads at the last minute. A Quiet Place II’s abrupt cancellation eight days before release will cost Paramount some $30 million (unlike with Mulan, A Quiet Place II director John Krasinski and the producers were involved in the decision-making process to hold off on releasing the film until the global pandemic has subsided).
With A Quiet Place II, insiders were stunned by how fast the postponement happened. “As of [Wednesday], we were all systems go. In less than 24 hours, it was over,” a source said. One source pegged the total at less than $10 million. Mulan, No Time to Die and Universal’s Fast and Furious 9, which is shifting to 2021, all took out Super Bowl ads, a collective $15 million wiped out. Because F9 was more than two months from release, its losses will be smaller than those of others.
But with large swaths of theaters across the world having been shuttered in recent weeks, stretching from Japan to Italy, studios were looking at major box office losses if they released the films. In the case of No Time to Die, that could have resulted in a minimum of 30 percent shaved off the final box office tallies — a possible $300 million out of a likely $1 billion global haul. Mulan likely was looking at an even greater sum given that the film was specifically aimed at Chinese moviegoers.