Coronavirus’ Financial Impact on Hollywood

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.

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.

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.

On Friday, Disney announced that it will “pause” a number of productions for “a short time,” including Marvel Studios’ Shang-Chi and the Legend of the Ten Rings, which is shooting in Australia, and the live-action Little Mermaid film in London.

Sources say a production shutdown on films like Shang-Chi and Little Mermaid would set back Disney about $300,000-$350,000 a day. “It’s not like you can stop on a dime,” says one producer. “You need to keep department heads going and maybe a level down from there through the hiatus.”

Warner Bros. halted preproduction on its Elvis Presley biopic, which was slated to shoot in Australia, after star Tom Hanks tested positive for COVID-19.

Meanwhile, it is unclear any of the losses will be covered by insurance. “If we are talking in terms of protecting lost revenue due to enforced shutdown or scale-down of operations, some property policies may offer limited amounts of coverage, although many have specific communicable diseases exclusions,” said attorney John Tomlinson, who specializes in insurance and risk management law.

—
Photo Credit: Gabriele Maltinti / Shutterstock.com