Part of broader industry reaction to coronavirus

The ongoing Covid-19 pandemic has left virtually no one unaffected. Companies big and small have been scrambling to deal with the economic fallout and The Walt Disney Company is no exception. In fact, it was one of the earliest American companies to feel the impact months before the outbreak became apparent in North America. Its parks in Hong Kong and Shanghai closed at the end of January with Tokyo closing a month later. Disneyland Paris closed in mid-March as did the US parks. To its credit, Disney has kept its California and Florida park cast members (employees) on the payroll with a commitment to keep paying their salaries through the middle of April. This has not been the case for workers at the Universal Studios, Six Flags and other theme parks.

On the film production side, the pandemic has not only shut down production of season two of The Mandalorian, it has also put a halt to production of Obi-Wan as well as WandaVision, The Falcon and the Winter Soldier and Loki among other series planned for the Disney+ streaming service. Reportedly, COVID-19 has also halted development of a Warmachine series as well.

Filming of The Mandalorian ended on March 6, right before the various shelter-in-place orders had been issued and retro-active casting announcements for the show were still being teased as of earlier this month. But, the post-production and CGI has been put on hiatus for the duration. However, it’s not been all bad news for the streamer as Disney announced that they had achieved 50 million paid subscribers since its launch in November, a phenomenal milestone in the space of less than five months.

Dark Theaters

Of course, the cinematic arm has also been affected. As part of social distancing, most movie theaters have gone dark. And, it looks like one of the biggest chains, AMC, may have to seek bankruptcy protection according to industry experts. As a result, the Spring opening of the live action Mulan was pushed back from March to a July 24th debut, bumping Dwayne “The Rock” Johnson’s Jungle Cruise to July of 2021. Indiana Jones 5, in turn, got moved over a full year to July 2022, both to avoid competing with Jungle Cruise, but also because production has been delayed due to the coronavirus.

The Marvel Cinematic Universe has been heavily disrupted. Not only do the films of Phases 4 and 5 each set the groundwork for the next movie, the Disney+ series movies set in the MCU also tie into the cinematic releases. The result is that moving one part of the MCU effects the other parts like dominoes. Black Widow was scheduled to launch the summer blockbuster season but now it will be released on November 6, displacing The Eternals to February 12 which in turn will bump Shang-Chi and the Legend of the Ten Rings to May 7, 2021. As Eternals had already wrapped, while Shang-Chi was still filming, this move gives some much needed time for filming and production. Shang-Chi will be taking the spot previously held for Doctor Strange in the Multiverse of Madness, which has reportedly still continued pre-production with its crew working remotely, but it is reliant on the WandaVision series airing before its release.

Despite the rumors, Black Widow is most definitely not going to go direct to Disney+. The same cannot be said for The New Mutants. Originally intended for a 2018 release by Fox, it had already been delayed by major reshoots before the acquisition of 20th Century Fox by Disney in July of that year. Disney execs were reportedly not confident with the resulting film, and given that they were not proceeding further with the X-Men franchise as Fox had created, it was something of a loose end and had been finally been given an August 2019 release date before being pushed to April 2020 and ultimately “delayed indefinitely.” The 94-minute flick is increasingly rumored to be heading direct to streaming. Doing so allows Disney to recoup at least some of the cost (reportedly, its budget was low) without the potential for it to “contaminate” the MCU, especially now that it seems likely that an X-Man will appear in an upcoming MCU movie within the next few years. New Mutants has recently been given a PG-13 rating, meaning that it would fall within the limit set by then-Disney CEO Bob Iger who said that no R-rated content would appear on the flagship service. For that reason, the Deadpool films will appear on the sister streamer, Hulu.

Furloughs and Layoffs

For the rank and file who keep the entertainment industry running, layoffs, pay cuts and furloughs have become an unwelcome reality. While modern technology has enabled a lot of jobs to be conducted remotely, turning homes and apartments into offices, closets into studios, and house pets into welcome guests at teleconferences, there are many supporting roles which cannot be done remotely, or which have now been rendered surplus due to budget belt-tightening or lack of staff to physically support. Disney had previously announced the possibility of furloughs and finally enacted them on Thursday, April 9. Staff at Marvel, Lucasfilm, Pixar, Searchlight (held over from Fox) and other studios were affected. At present, the employees still retain their benefits and retirement plans, but will receive no paychecks.

Disney held on longer than many of its rivals. Lionsgate cut its headcount heavily in late March. WarnerMedia’s reductions cut across all departments, although they launched a $100M relief fund for production staff during the shut down according to Variety. At the same time Disney was announcing its furloughs, Blumhouse Productions, the small studio which produces low-budget horror franchises announced layoffs plus salary reductions for senior leadership. Blumhouse had been recently tasked with bringing Universal’s classic cinematic monsters to new audiences following the failure of Universe’s “Dark Universe” cinematic universe and there has been no word on any effect the pandemic will have on their production schedule.

Ongoing Impact

With the number of new illnesses showing some signs of plateauing in California, it is possible that things may be able to get moving, albeit with allowances for social distancing. However, with Los Angeles extending its health directives through mid-May, it will be slow progress as care is taken to not open society up for a second wave of infections as is happening in parts of Asia. One of the big unknowns is how the industry showcase that is San Diego Comic-Con will proceed – if at all. While the parent organization CCI waited until California instituted its protocols, before postponing (cancelling) Wonder Con in Anaheim in order to not take a major financial hit from cancellation fees, it may have to make a decision before they can cite force majeure.

The E3 convention in Los Angeles only cancelled after major studios cancelled out of health concerns. And, as SDCC can charitably be called a “sea of humanity” with 135,000 people in and around the convention center, social distancing is not practical. The decision may be made for CCI as the convention center is serving as a temporary shelter for 800 homeless individuals and it will require deep cleaning before it is able to reopen for any future events. The local newspaper, the San Diego Union-Tribute, quotes the city’s tourism head Joe Terzi as doubting that the show will go on,

“Based on our knowledge of the event, it will be very difficult for them to have that event in July. With other events you could do things to keep people separate, but Comic-Con is a whole different animal, it’s a massive sea of people.”

San Diego Tourism Authority CEO Joe Terzi, April 10, 2020

No matter when the pandemic ends, the effects will be felt for years to come, both on and off the screen.

-30-