New York State Theaters to Reopen at 25% Capacity

New York State Theaters to Reopen at 25% Capacity

New York Governor Andrew Cuomo announced this weekend that cinemas outside of New York City will be allowed to reopen at 25% capacity Friday, October 23rd.

Theater stocks jumped on Monday in reaction to the governor’s announcement, as the populous northeastern state has one of the biggest theater markets in the country and is necessary for the screening industry to rebound.

Cinemas will have to limit audiences to 25 percent capacity with a maximum of 50 people per showing, though exhibitors viewed the news as much needed relief.

Sector stocks rose in early Monday trading, with AMC shares jumping 11.8 percent to $3.40 as of 9:35 A.M. Easters, and Cinemark rising 6.6 percent to $8.38. Meanwhile at the London exchange, Regal owner Cineworld‘s stock went up 4.8 percent.

AMC said in a statement on Monday that “several AMC locations throughout New York state will resume operations beginning Friday” as a result of the governor’s announcement, with a full list of venues to be released later this week.

“The reopening of movie theatres around the country is essential to the theatrical industry and the entire entertainment ecosystem,” said AMC Theaters CEO Adam Aron. “It has become clear that movie studios are not willing to release blockbuster product until key major markets are open. Therefore, it is a monumental step in the right direction for our entire industry that theatres are starting to open across the state of New York. We thank Governor Cuomo and local leaders in our New York communities for allowing guests to return to AMC at several locations throughout the state.”

Industry analyst Eric Wold wrote in a recent economic report that “With Governor Cuomo reportedly allowing concessions to be sold at the theaters, we believe this represents a more meaningful move toward reopening the industry in that state versus the more restrictive moves taken by Mayor London Breed a couple of weeks ago toward theaters in San Francisco, with exhibitors in San Francisco opting not to reopen even with that ‘green light’.”  Wold’s report added that, “Although movie theaters within the key five New York City boroughs will still remain closed for the time being, we view this as a positive step toward reopening those theaters in the coming weeks.”

He noted that the New York City “designated market area alone typically [represents] as much as 7-10 percent of domestic box office revenues.”

Wold further argued that the news could have a positive effect on studios’ film release dates. “Given that the major studios have been continuously pushing out the 2020 film slate, or shifting titles to streaming platforms, because of the uncertainty around major market reopenings, we remain optimistic that visibility into near-term reopening timelines for New York City, Los Angeles and San Francisco could put a halt to those moves and drive stability in the 2021 – and possibly even November/December 2020 – film slates,” he said.

After Disney opted to release Soul on Disney Plus instead of in theaters, the only major films remaining on the 2020 calendar are Universal‘s The Croods: A New Age, Fox‘s Free Guy, and Wonder Woman 1984 from Warner Bros.

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