Hollywood strikes put movie theaters at risk, again

Movie theater operators are the businesses most at risk from a protracted writers' and actors' strike, Moody's Investors Service concludes in a note out Monday.

Why it matters: Theaters rely on new releases, more so than TV networks or streamers do. If the strikes go on much longer, the pipeline of fresh content may run dry.

State of play: While movie production had been muddling along, even with a writers' strike, the actors' strike that began last week changed the game — grinding all film production to a halt.

The big picture: Theater operators like AMC, Vue Entertainment, and Cineworld are only just emerging, and have not yet recovered, from the horror show of the COVID economy.

• "In a prolonged strike in which new theatrical Hollywood tentpole product is spread more thinly or runs dry, these companies could face earnings, cash flow and liquidity pressures," write the authors of the Moody's note.
• The strikes “have impacted the industry at a difficult time," Bobbie Bagby Ford, the executive vice president of midsize chain B&B Theatres, told the New York Times.
• Meanwhile: There were hopes that this summer would mark the industry's "return to glory," but so far it's looking like those days might never come back, Axios' Tim Baysinger writes. (h/t to Tim for the chart above.)

What's next: The last actors' strike, in 2000, lasted around 180 days.

• If the current strikes go past the fourth quarter — there are 166 days left to the year — there will be bigger reverberations in other sectors of the entertainment industry, including the studios and the TV networks, per Moody's.

• But things could get dire before that. Studio chairs told the New York Times that if the work stoppage goes past Labor Day, it would have a serious impact on next year's release calendar.

Yes, but: For the theater companies, the impact of the strikes isn't likely to be as bad as the hit from the pandemic, when theaters were fully shut down and folks debated if the movies would ever come back.

What to watch: "Barbie" or "Oppenheimer." Theatergoers are expected to flock to these films — Barbenheimer-style — which open this weekend. It could be the industry's last gasp before the strike impact hits.