Movie theaters struggle to cover rent, utilities in an industry that typically operates with narrow profit margin | TheUnion.com
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Movie theaters struggle to cover rent, utilities in an industry that typically operates with narrow profit margin

By the numbers

As of May 28

Number of COVID-19 cases: 41

Number tested: 2,857

Number in western county: 12

Number in eastern county: 29

Number of active cases: zero

Number of recoveries: 40

Number of deaths: 1

Learn more at http://www.theunion.com/coronavirus

Nevada County’s movie theaters have taken a devastating financial hit since the onset of COVID-19, with revenues dropping sharply even before March shelter-in-place orders went into effect.

“When news of the coronavirus hit, this community responded quickly,” said Michael LaMarca, who co-manages Sierra Theaters with his wife, Azriel LaMarca. “Our attendance numbers dropped precipitously as early as February, when people started staying home and staying safe. We sustained at least four to six weeks’ worth of suppressed revenues, even before we were shuttered on March 17.

“We entered this phase in a depressed state to begin with, then the lockdown exacerbated things.”

The financial impact on the global film and entertainment industries continues to grow. Consequences range from lowered attendance to disruptions in film distribution to delayed or canceled movie releases and changes to on-location film shoots. Financial ramifications will likely be felt by studios, filmmakers and theater owners for months or even years, say industry insiders, and Grass Valley’s theaters are tied to this global industry.

With movie theaters included in Phase 3 of California businesses reopening, Azriel LaMarca said they hope to open — in a limited capacity — in mid- to late June. Sierra Theaters includes three Grass Valley theaters — Sierra Cinemas, Sutton Cinemas and the Del Oro.

“We will be opening with limited seating capacity,” said Azriel LaMarca. “We do feel we can meet the health and safety requirements. With our large auditoriums people can easily sit six feet apart. We have 360 seats at the Del Oro. Even with a third of the capacity, that’s a lot of seats. We feel we can start operation and keep people feeling safe and comfortable.”

Sierra Theaters will be setting up an online reserved ticketing system that ensures each party has at least two seats between groups. Seats can be picked out in advance or at the box office.

“This online system has become the norm in most places, but many customers here had been resistant to the idea in the past,” said Michael. “Someone recently said that with COVID-19, we’re seeing five years’ worth of disruption in society in just two months. Whatever was going to inevitably happen in the next five years just happened. Things have accelerated that were already underway.”

Fortunately, Sierra Theaters was able to secure two loans, one through the Paycheck Protection Program (PPP) and a second through the Small Business Administration’s Economic Injury Disaster Loan Program (EIDL). However, the caveats, limitations, stipulations and conditions of each loan do not make the average small business owner rest easy, said Azriel LaMarca, and theaters typically operate with a thin profit margin under normal conditions.

“The loans were good news and we were very pleased,” she said. “But they are complicated and we want to make sure to meet the criteria to get forgiveness on the loans. Our employees are doing OK with unemployment insurance, so our biggest concerns while being closed are the rent obligations and the outstanding bills that are not payroll. We are negotiating with our landlords. For example, air conditioning bills in the summer at the Del Oro are through the roof and even if we can’t fill the theater, we still have to run the AC. It’s things like that, along with a 30% insurance premium increase, that have us looking at things differently in the future.”

Despite the challenges, the LaMarcas say they have received “an incredible amount of information, guidance, moral support and concern” as well as an “outpouring of assistance” from county superintendents, Grass Valley, the Grass Valley Chamber of Commerce and the Grass Valley Downtown Association. Additionally, the county health department has been “proactive and communicative.” The National Association of Theatre Owners has also been providing best practices for theaters going forward.

Some employees have been hired back and are busy cleaning and sanitizing the theaters, said Michael. The Del Oro was the first to open its doors on Thursday, and is currently selling “family home movie night packages” with popcorn and candy to go, as well as gift certificates. Hours are 3 to 6 p.m. Thursdays and Fridays, and 1 to 6 p.m. Saturdays and Sundays until further notice.

In June, Sierra Theaters plans to show older film favorites until larger studios begin their major movie releases. The first highly anticipated blockbuster is the action thriller, “Tenet,” written and directed by Christopher Nolan. Scheduled for release by Warner Bros. pictures on July 17, the film stars John David Washington, Robert Pattinson, Elizabeth Debicki, Dimple Kapadia, Michael Caine and Kenneth Branagh.

“You can buy snacks and gift certificates right now on certain days,” said Azriel LaMarca. “But down the road, the best way to support us is to go see movies.”

“One thing I look forward to personally is how people in Hollywood will write about this crisis — that’s the bright side,” said Michael LaMarca. “Right now people are writing scripts that will be very different from last year. We’re a new nation all of a sudden. In the end, we just want to keep showing movies.”

THE ONYX THEATRE

With just 29 seats in each of its two theaters, The Onyx in Nevada City is a completely different animal than Sierra Theaters’ three large auditoriums. The 21-and-over art house cinema has established a reputation for bringing the best offerings of independent first-run titles from Hollywood and around the world. But the small venue makes social distancing a bigger challenge once theaters are given approval to open back up, said general manager Celine Negrete.

“We’re so small and intimate that if we opened at 25% capacity, that would translate into about six seats per theater,” she said. “There’s really no reason to open under those circumstances.”

But Negrete was quick to note that the small movie house is fortunate to be able to weather the COVID-19 storm and will only reopen once conditions are deemed truly safe for both patrons and staff. The theater’s 15 employees, most of whom have always been part time, are currently collecting unemployment and will be back on payroll once unemployment insurance runs out. The Onyx is committed to bringing all of its employees back, she said.

“Small is mighty — we’re a tiny, two-screen theater, so our overhead is minimal compared to larger theaters,” she added. “Our smallness has worked to our advantage. There is no reason to push for an opening until we feel really, really comfortable.”

In the interim, The Onyx is now offering a curated selection of first-run independent films and documentaries via virtual screenings. This gives film lovers a way to watch newly released titles at home, while directly supporting The Onyx. The cost of the digital “ticket” is split between the film distributor and the Onyx — just like with a ticket purchased at a box office. Proceeds from online streaming will help defray the cost of maintaining operations while the theater is temporarily closed. Films are available to watch through the internet browser on a home computer, phone or tablet. They can also be viewed on a TV for those who have AppleTv, Roku, Firestick, Chromecast, or if a laptop or home computer has an HDMI port. Ticket prices tend to range from $9.99 to $12 for a 48-hour rental. More information can be found at http://www.TheOnyxTheatre.com.

“We realize there are a lot of people in Nevada County who can’t stream, but this is one way to help support theaters and these very small distributors — they’re the ones who are struggling right now,” Negrete said. “Their entire income stream disappeared when movie houses closed.”

The Onyx is part of The Art House Convergence, a national nonprofit association whose mission is to help foster sustainability in community-based, mission-driven media exhibitions, including small, independent cinemas. It was through this network that The Onyx became involved in the streaming option. The support of an organization that includes more than 750 independent art houses has been invaluable, said Negrete.

“No one goes into this business to get rich — we’re here because of our love and passion for film,” she said. “We would love to be open and showing movies, but if this is what we have to do, we’re OK with that. We’ll be here when the time comes.”

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RELATED RESOURCES

http://www.TheUnion.com/coronavirus

http://www.MyNevadaCounty.com/coronavirus

Coronavirus Guidance for Businesses/Employers

Nevada County Relief Fund for Covid-19

To contact Staff Writer Cory Fisher, email her at cory@theunion.com or call 530-477-4203.


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