Boxoffice Pro Q1 2021

Industry NATO
FAREWELL
TO 2020
A Year of Pandemic, Pain,
Patience, and Perseverance
BY PATRICK CORCORAN
The pandemic has meant
an ever-changing mixture
of crisis response, managing
expectations, and drawing
on deep wells of experience
and relationships developed
over years.
Bits of news had been trickling out
of China about a new and contagious
respiratory virus at the very end of 2019.
On January 23, 2020, China announced
it was closing all 70,000 cinema screens
as part of its efforts to control the virus.
On January 31, NATO distributed an
updated and revised “Preparing for a Flu
Pandemic,” originally prepared in 2009, as
well as its “Crisis Management Handbook.”
That same day, travel restrictions for non-
U.S. citizens from China went into effect.
Preparations for the 10th-annual
edition of CinemaCon, scheduled for
March 30–April 2, continued, with a
wary eye on worsening case numbers
of the novel coronavirus, now known
as Covid-19. On March 11, the World
Health Organization (WHO) declared the
outbreak a pandemic, and NATO canceled
CinemaCon that same day. NATO, unlike
many organizations and event planners,
had pandemic insurance, meaning that
the organization would incur no losses as
a result of canceling the show.
Within a week, movie theaters across
the country began to close, as audiences
began staying away from public places
and the industry anticipated statemandated
closures. Most observers at the
time anticipated no longer than a six-weekto
three-month-long period of closures. As
we all know now, they were wrong.
For NATO and its members, the
pandemic has meant an ever-changing
mixture of crisis response, managing
expectations, and drawing on deep wells
of experience and relationships developed
over years.
NATO’s Executive Board began
meeting weekly two days after the WHO’s
declaration and before U.S. movie theaters
began to shut down. First priorities were
to understand the extent of the crisis,
state and local mandates, and how to plan
as an industry for what was expected to
be a not-far-off reopening. The theater
industry would make it known that we
would behave as responsible citizens, that
the health and safety of our patrons and
employees were our highest concerns, and
that we would be back.
We called upon industry allies, and
they called on us. Christopher Nolan
asked what he could do. Within three days
of U.S. theaters’ closing, we helped him
place his piece, “Movie theaters are a vital
part of American social life. They will
need our help.” in The Washington Post.
NATO contributed $1 million to a seed
fund for the Will Rogers Motion Picture
Pioneers to provide assistance for movie
theater employees affected by the closure
of movie theaters due to the pandemic.
NATO lobbying was in full swing as
discussions began in Washington over a
potential aid package for businesses and
individuals affected by the pandemic. NATO
coordinated with its regional affiliates on
outreach to local health officials on how to
sensibly and safely reopen.
We began weekly State of the Industry
webinars on April 23 to keep members
informed and to learn their concerns. We
are preparing for our 35th such webinar
as this article is written. There have also
been stand-alone webinars on various
provisions of federal aid packages, as well
as operational, marketing, and other issues.
There has been constant
communication with the studios, large
and small, on the complexities and
challenges of the pandemic release
calendar. While there have been
disappointments in movies going straight
to the home, or in hybrid home and
theatrical “pandemic release windows,”
the vast majority of major titles have
chosen to delay their release in theaters,
rather than abandon it.
The first stimulus package, known as
the CARES Act, provided direct aid to
individuals and enhanced and extended
unemployment relief. The CARES Act
also provided two new loan programs:
the Paycheck Protection Program, which
granted partially forgivable loans to small
businesses, and the Main Street Lending
Program, which made loans available to
companies with up to 15,000 employees
and $5 billion in revenue. The CARES Act
also provided tax relief to businesses of
all sizes, through payroll tax deferral; the
long-sought QIP fix, which corrected an
error that extended capital improvement
expense depreciation to 39 years and
allowed businesses to amend those items
in 2018 and 2019 returns; and the net
operating loss carryback provision, which
allowed businesses and individuals to use
net operating losses against taxes incurred
up to five years before, yielding hundreds
of millions in tax refunds for exhibitors.
As the late spring and summer
stumbled forward in fits and starts of
reopenings and closures, it became clear
that individual company health and safety
protocols were not effective at convincing
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