There’s Gotta Be Something Better Than This: Covid-19 Regulations and Relief Now and To Come for Arts and Entertainment

The rollercoaster ride of 2020 has sure had its ups and downs, and 2021 is destined to continue this trend with regulatory action expanding and contracting in order to attempt to contain the spread of Covid-19. This article examines regulations that have been put in place primarily in New York to deal with Covid-19, and future regulatory projects and related trends and repercussions that are expected in 2021 for arts and entertainment, including movie theaters, live theaters and concert venues.

Concert venues in New York remain closed by mandate with little detail about when they will collectively reopen. Globally, the live events industry has lost around $30 billion in 2020 due to Covid-19, which includes $9.7 billion lost at the box office. And in regards to theater, Broadway productions have shutdown live performances until at least May 30, 2021. There is little effort to push for reopening of Broadway because any significant social distancing efforts would be challenging to allow the theatrical producers to obtain any profits. Already as many as three out of every four Broadway shows fail to make a profit, and so selling fewer tickets to accommodate extra room in what are traditionally very crowded audience seat layouts is impractical. For additional insights about Broadway’s reopening challenges, see my article Another Op’nin, Another Show: What Will It Take for Broadway to Reopen?

Smaller theaters may be able to profit even with capped patrons below capacity. However, New York has not allowed other smaller indoor theatrical venues to open either, which has caused some of them to take legal action against the government, claiming a lack of due process and unconstitutional unequal treatment, where indoor dining and bowling alleys have been allowed to be open for months. These off-Broadway theaters claim that they can adhere to required CDC and other safety measures. Given that Covid-19 transmission rates have surged and the government is given a fair amount of discretion to enact emergency measures that do not violate First Amendment rights, the theaters have an uphill battle. To read more about the lawsuit brought by small theaters pushing to reopen, see my article No More: Off-Broadway Theaters Bring Litigation to Obtain the Same New York Reopening Rights Granted to Restaurants and Bowling Alleys.  However, some theaters have gotten creative and have been able to hold compliant socially-distanced theatrical performances earlier in the year outside. The stage actors’ union, Actors’ Equity Association (AEA) approved union stage productions beginning over the summer for performances both indoors and outdoors in front of live, paying audiences in states that allow it, albeit with heavily mandated restrictions. For more details, see my article Waving Through a Window: Precautions for Live Theater During the Pandemic. At the same time some non-union theaters across the United States moved to transition from their traditional use of union actors to using non-union actors, allowing productions to proceed without restriction from AEA. Furthermore, numerous virtual theatrical performances and concerts have also been shown on streaming platforms, the frequency of which is expected to continue to increase next year.

Next year, we will hopefully see increased efforts to boost outdoor theatrical performances, once the weather begins to warm up in the spring. Local governments will hopefully be enlisted to assist with such efforts. For example, NYC Local Law 2068 is a bill that could help. It was introduced at the New York City Counsel but its passage is currently stalled. The bill would require New York City to create an open culture program that would allow art and cultural institutions affected by Covid-19 to use parks, pedestrian plazas, roadways, or public parking areas and other approved open space as temporary performance and rehearsal space. For additional details on Local Law 2068 and related regulatory measures to increase public outdoor performance space utilization, see my article The Parks Are Alive With the Sound of Music. Furthermore, we also may see some financial help provided to theaters and other entertainment venues and organizations, which have been lobbying Congress to enact grants and other legislations that could help avoid many bankruptcies. One such bill titled Save Our Stages, a $15 billion federal grant program, was introduced in Congress in July and, though not passed, has since reemerged as part of another relief bill aimed at small businesses entitled the Heroes Small Business Lifeline Act, introduced in the Senate in October by Democrats. On December 15th, a congressional hearing was held where senators, venue owners and members of the entertainment community could testify about the relief needed for the live entertainment industry. Many witnesses highlighted the need for the Save Our Stages bill to pass immediately and for unemployment assistance to be extended. Although recently passage has gained traction, it is still unclear whether such federally funded relief efforts will come to fruition, at least until a new Congress and president take their seats next year. On the more local front, the Department of Cultural Affairs in New York City is awarding a $47.1 million grant that will be distributed to over 1,000 of the City’s non-profit organizations. Entertainment venues including the Apollo Theater, Metropolitan Opera and the New York Philharmonic are among the 93 recipients that will receive grants over $100,000.

New York State’s movie theaters were allowed to reopen at 25% capacity under state guidance beginning on October 23rd. No more than 50 people are allowed in front of each screen in each movie theater at once. Because movie theaters can only open outside of New York City in counties that have Covid-19 positivity rates of less than two percent on a 14-day average and do not have any cluster zones, with increased Covid-19 infection rates, it is unlikely that many of New York’s movie theaters will be able to remain open extensively, at least into the spring.  Some movie theaters in the country have forgone opening due to too low revenue expectations, even where those theaters are allowed to open under local governmental regulations. “Wonder Woman 1984”, a blockbuster action sequel, is set to open in some theaters on Christmas, which may provide a revenue boost to those theaters open and presenting it, but at the same time Warner Bros. is releasing the movie on HBO Max, thus allowing patrons who subscribe as an alternative to watch from the comfort and safety of their homes. Other studios have forgone standard theatrical releases and opted to bring new films only to digital platforms, and Covid-19 may cause more studios to do so in the future, or at least to offer contemporaneous releases both in theaters and via streaming platforms.

While New York City movie theaters wait for permission to reopen, some have gone digital as well. For example Metrograph, an independent two-screen cinema on the Lower East Side of New York City has, in an effort to bring in revenue, provided digital offerings of on demand screenings of films like the “Phantom Thread” and “Raising Victor Vargas” while coupling them with discussions among cast members, filmmakers, and critics. Additionally, some movie theaters in the United States have been offering private watch parties which have allowed private groups to rent out a theater. To date, Cinemark, which owns 525 theaters worldwide, has sold out at least 50,000 of these private screenings, which has helped keep it afloat. Next year may bring an increase in these private watch parties until reopening is fully allowed and customers are willing to return en masse, but these private showings may also take up a more permanent home in the movie theater industry model thereafter.

According to Variety, it is estimated that globally movie theater box office revenues will drop 65.6% to an estimated total of $15.5 billion, the worst result in decades. If big movie theater conglomerates can hold out for patrons to be vaccinated against Covid-19, they may be able to survive, but many small town theaters in the United States are going to be hard pressed to make it that far without declaring bankruptcy or closing. Next year is certainly expected to leave us with a smaller number of movie theater venues in the United States, which may further transform the shift of how and when studio film releases are made. In fact, last week, Warner Bros. announced that it will release all 17 of its 2021 films simultaneously in theaters and via streaming.

There is little doubt that entertainment venues will be further accessible and utilized later in 2021, but the makeup of those venues and how they are utilized may very well be altered from before.

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