Major Hollywood Studios Won't Be Buying Out Movie Theaters Any Time Soon

Can movie theaters survive the COVID-19 (coronavirus) pandemic? With the fall/winter movie season  effectively out for the count after major studios pushed back their big releases to 2021 and state governments keeping major markets like Los Angeles and New York closed, movie exhibitors are struggling to stay afloat. Studios like Universal have reached a compromise with AMC Theaters by striking a VOD window release, but is that enough to keep theater chains from sinking?

Probably not. For theaters to truly survive, the movie industry may need to go back to the Classic Hollywood model of studios owning stakes in exhibitors. But major studios like Warner Bros. and Universal don't have any plans to buy out movie theaters any time soon.

In a Deadline report, Universal Filmed Entertainment Group chair Donna Langley and Warner Bros. CEO and chair Ann Sarnoff both laughed at the idea of their studios buying out movie theaters.

"We have no plans to do that currently," Langley said at a Milken Institute Global Conference virtual panel with Sarnoff and CBS CEO George Cheeks on COVID-19's impact on Hollywood. "We have no plans either," Sarnoff added, with a chuckle. Sarnoff added that they're "rooting for" exhibitors, but despite both companies' commitment to theatrical releases, expressed no concrete plans to aid theaters:

"I'm kind of an armchair sociologist and I believe people want to have communal experiences and especially with certain genres. We're big fans of the exhibitors. They've been good partners of ours for many decades. We're rooting for them. I know it's tough sledding right now. I'm hoping they come out on the other side, probably even stronger."

From the 1920s to 1940s, it was common for studios to have an ownership stake in exhibition chains — spurred on by the 1918 Spanish Flu pandemic which shuttered theaters across the nation. It was common practice for studios to control theaters until the 1948 Paramount decree broke up the monopolies. But history repeats itself yet again — with another pandemic shuttering theaters across the country, but this time, no studios are willing to step in to buy them out even with the 1948 Paramount decree now abolished.

Movie theater chains are on the brink, AMC teetering on the precipice of bankruptcy for years, while Regal Cinemas' parent company reported a $1.6 billion loss in the wake of the coronavirus pandemic. Major studios have turned to streaming and VOD to make back a profit, but theaters are left without an out. Deadline reports that domestic box office is on pace to plummet more than 80% in the U.S. All this while filmmakers have banded together to plea for the survival of cinemas, while chains wait fruitlessly for a bailout plan from Congress.

Langley said Universal remains committed to theaters, citing the studio's historic deal with AMC' which enables titles to leave theaters after a 17-day window — as proof. The Universal chair also mentioned upcoming theatrical release The Croods: A New Age, while Sarnoff cited spring 2021 theatrical release In the Heights. But Langley said there's "no line of sight" on how long the pandemic will go on. And there's no telling whether theaters will emerge from the pandemic either.