In dark portent for U.S. movie theaters, Warner Bros. postpones ‘Tenet’ amid coronavirus concerns

The move marks a hoisting of a white flag for a studio that had hoped to charge ahead after many others had long since surrendered. Disney, the only other major studio with a movie scheduled in the next six weeks, will probably also postpone its two August films, “The New Mutants” and “Mulan.”

With coronavirus cases surging in California and other large states, no major new films are likely to be released in the United States until at least September. That will deprive consumers of entertainment and, critically for the entertainment business, theaters of badly needed revenue.

Warner Bros. executives said they had no choice as they looked at the landscape.

“We’re grateful for the support we’ve received from exhibitors and remain steadfast in our commitment to the theatrical experience around the world,” Toby Emmerich, chairman of the studio’s Pictures Group, said in a statement. “Unfortunately, the pandemic continues to proliferate, causing us to reevaluate our release dates.”

Another planned late-summer Warner Bros. release, “The Conjuring 3,” will move to next June, the studio announced.

The studio did not specify new dates for “Tenet,” but a person with knowledge of the situation who was not authorized to talk about it publicly, and so spoke on the condition of anonymity, said the company is eyeing Aug. 26 overseas and Labor Day weekend in the United States, another postponement of two weeks, with an added cushion of a third week domestically.

The decision came about as the studio, parent AT&T and others involved with the release jostled over the best course of action. Nolan, his wife and producing partner Emma Nolan, and the WB distribution team have been pushing to release the movie now to bring entertainment to consumers and at least some revenue to the studio and theaters.

But Emmerich and executives at AT&T, looking at the numbers, have been worried that their investment, which runs to $200 million in production costs and perhaps nearly as much in marketing totals, will return a minimal figure in a corona-pocked world.

The moves do not alter the long-term calendar for now. “Wonder Woman 1984” remains on schedule for Oct. 2, and “Dune,” a splashy new take on the science fiction novel, is on track for a Dec. 18 release. Competitor Paramount Pictures plans to release “A Quiet Place Part II” over Labor Day weekend.

But the “Tenet” postponement deals a blow to any hope that one of the country’s premier forms of public entertainment would soon return and undermines significantly the chance for theaters to gain the lifeline they’ve cried out for.

Movie theaters have found themselves in a pandemic purgatory — potentially safe enough to plan a reopening, but grouped by many states with bars and restaurants, among the first to close down and the last to reopen. About three-quarters of the country’s 5,000 movie theaters remain closed, even in areas that have been reopening, because studios have not released any new films to make reopening worthwhile.

This month, the theater giant AMC, which earlier said it had enough cash to last into the fall, restructured its debt to give it breathing room into 2021. Still, the move will add to an already highly leveraged balance sheet and does little to address the company’s longer-term ability to pay its creditors.

Other theater owners may need their own forms of creativity.

About 10 days ago, the regional chain Classic Cinemas, which includes some 115 screens at 15 locations in Illinois and Wisconsin, closed down again after reopening last month. Traffic, the company’s executives said, was just too slow amid the lack of new releases and fears about the virus — with receipts at only about 10 percent of revenue on the same weekends in 2019.

The theaters will stay shuttered until “Tenet” or a comparable big release comes on the calendar.The cost of running the theater for so little revenue just does not make it worthwhile, said Chris Johnson, the company’s chief executive.

Johnson said that the firm technically has enough money to make it until the end of the year but that it will require some creativity if Hollywood can’t make good on its promise for fall films.

“I think there’s a way of navigating through, but we’re going to have to pull some creative levers,” he said. And beyond December? “That’s a worst-case scenario.”

The release backstory of “Tenet,” which stars John David Washington as a man trying to prevent a worldwide disaster, has become almost as mind-bending as one of its director’s films. Originally scheduled for July 17, the film held onto that date even as many others moved, in large part on Nolan’s hopes that the movie could reopen theaters around the United States. But coronavirus surges across the country forced a push to July 31 and then Aug. 12.

The decision by California Gov. Gavin Newsom (D) last week for all theaters to remain closed indefinitely because of the resurgent virus forced a rethink. Los Angeles is the second-biggest movie market in the country after New York, with San Francisco also in the top tier.

John Fithian, president and chief executive of the National Association of Theatre Owners, said studios will have to adopt new and often bolder strategies involving fewer available screens than the usual 3,000 or 4,000.

“Waiting until everything will be open won’t work, because what happens if there’s a massive spike somewhere?” he said in an interview. “These things come and go. You have to find a safe way to open a movie during the era of a pandemic.”

He said that by the group’s calculation, 43 states will be sufficiently open to accommodate moviegoing by the beginning of August. That should be enough for many studios to feel comfortable going ahead with movies this summer, along with the fourth quarter, packed with big-budget releases.

Meanwhile, the question about the overseas release remains a tricky one. Over the past decade, studios have moved more toward globalization, releasing movies in an ever-greater number of countries, usually simultaneously with the United States to stave off piracy and plot leaks and maximize marketing budgets.

The staggered “Tenet” plan is an attempt to do things differently. But there are many questions about whether the strategy could work in normal times, let alone during a pandemic.

“Tenet” faces an additional hurdle in China, the world’s second-largest movie market, where many theaters will reopen this week. But the government is requiring that movies run no longer than two hours to limit social interactions. “Tenet” clocks in at about 2 hours 30 minutes.

It is not expected that “Tenet” will land an online release in the United States. While some fans clamor for that opportunity, such a move, in addition to being vehemently opposed by Nolan, would limit the film’s economic upside.

There is little chance that collecting 80 percent of a $20 or $30 digital rental, as a studio usually does, can rival box office numbers that in 2019 reached $42.5 billion worldwide and $11.4 billion in the United States. Warner Bros. would rather collect half of a $1 billion gross worldwide even if it means waiting months or longer to put a movie in theaters.

But theater owners say they don’t have that luxury. And they argue that if studios postpone movies significantly with the hope of eventually making more money in theaters, there soon won’t be many theaters left to make money in.

One entrepreneur, who spoke on the condition of anonymity to discuss sensitive financial information, said banks are likely to start putting more pressure on theaters, potentially bringing about closures in the coming months.

“There was hope we could open and start generating revenue. Now these guys have to start pushing,” the owner said.

Fithian noted that pressure was building.

“Every month a theater stays closed adds to the strain,” he said.