Hollywood box office earnings will drop by as much as 70% this year according to analysis by Eric Handler of research firm MKM Partners.
Handler cites delays to wide releases of films such as Disney’s Mulan and Christopher Nolan’s Tenet due to the pandemic as reasons for the fall off. Tenet was supposed to kick off the box office season on August 12 after already having been delayed several times. That date now appears unlikely as well.
September is now seen as the earliest date theaters will be able to receive audiences nationwide.
“The near-term outlook for exhibition-related stocks remains extremely clouded,” Handler writes. “It would be surprising to see theaters able to re-open nationwide before September, at the earliest.”
According to Handler, earnings will fall nearly 70% compared to the $11.4 billion taken in last year, the second-highest grossing year in box office history. Handler is also projecting box office receipts of $9.1 billion in 2021, still well below last year’s levels, but then a return to normal in 2022.
“Beyond this year, we do believe there is pent up demand for consumers to get out of their houses for entertainment although the ramp-up in attendance will likely be gradual,” Handler wrote. “With box office revenue likely remaining at a near-zero level well into the third quarter, the focus is once again shifting towards liquidity and cash burn.”
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