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Business Insider

Coronavirus shutdown could upset Elon Musk’s $750 million Tesla payday – Business Insider – Business Insider

There’s a twist to Elon Musk’s repeated calls to reopen America: He is on the verge of a $750 million payday, which might not happen if Tesla’s factories stayed closed.

On Tesla’s first-quarter earnings call Wednesday evening, the billionaire warned that shutdowns of the company’s main Fremont plant “should be identified as a serious risk,” before launching into an expletive-ridden tirade.

“I would call it forcibly imprisoning people in their homes against all their constitutional rights, that’s my opinion, and breaking people’s freedoms in ways that are horrible and wrong and not why people came to America or built this country, what the f–k, excuse me, the outrage — it’s just outrage.”

He went on to call the orders, which are intended to slow the spread of the coronavirus until mass testing and vaccination can occur, undemocratic.

“If somebody wants to stay in their house, that’s great. They should be allowed to stay in their house, and they should not be compelled to leave,” he said. “But to say that they cannot leave their house, and they will be arrested if they do, this is fascist. This is not democratic. This is not freedom. Give people back their goddamn freedom.”

Tesla’s stock price has largely shrugged off a broader market rout triggered by the pandemic, leaving Musk on the brink of the massive incentive package first approved by shareholders in March 2018. More importantly: the company’s market value has once again climbed above the key threshold of $100 billion. If sustained for six months, that market value unlocks the first part of Musk’s compensation package.

While Musk is worth some $40 billion (a number that fluctuates based on daily market moves), the chief executive’s income includes relatively little cash. More than half of his wealth is in Tesla stock, of which he’s the largest holder, with another $14 billion tied up in SpaceX, according to Bloomberg estimates. In court last December, Musk told a jury he was short on cash, and has previously mortgaged many of his California homes.

If Tesla can continue to keep its market capitalization above $100 billion — a value well above its Detroit competitors who produce far more cars in a given year — for six months (on a trailing 30-trading-day average), Musk will unlock one of twelve award tranches of 1.69 million options. Once awarded, Musk has to hold the shares, which are worth $350.02, for five years.

“If the value of Tesla’s closing stock price continues near the levels seen in late April 2020, the first market capitalization milestone of $100 billion is expected to be met during the second quarter of 2020,” the company said in a regulatory filing this week.

Alameda County, which includes Fremont, extended its shelter-in-place order through May 31 this week, meaning Tesla could not resume full production until two months into the three month reporting period. That financial impact won’t be reported until July.

“It is startling to us that TSLA shares are again trading at $800 (and as high as $870 in the aftermarket Wednesday),” Ryan Brinkman, an analyst at JPMorgan, said in a note to clients Thursday. That high price suggests “investors are imprudently disregarding substantial risks and negative developments.”

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After April

After the best April for the Dow and S&P 500 in 82 years, is ‘sell in May’ in the coronavirus era a smart strategy? – MarketWatch

In One Chart

It’s shaping up to be the best monthly return for the Dow and S&P 500 since 1987


MarketWatch photo illustration/iStockphoto

Sell in May and go away! It is one of the most well-known maxims in the investing world, but it may not necessarily hold true this time around as investors face one of the most significant public-health crises in history.

The Wall Street adage refers specifically to the six-months on, six-months off seasonal pattern that sees the market, on average, underperform from May through the end of October.

Markets have enjoyed a solid run up April thus far, following a withering bout of selling prompted by the COVID-19 pandemic that has infected well over three million people—1 million in the U.S. alone—and claimed the lives of nearly 230,000 globally, according to data aggregated by Johns Hopkins University.

Meanwhile, the Dow Jones Industrial Average
DJIA,
-1.17%

was looking at a gain of 11.1% so far in April, while the S&P 500 index
SPX,
-0.92%

was headed for a 12.7% return month to date, while the Nasdaq Composite Index
COMP,
-0.28%

was on pace for a 15.5% gain in April, with those returns representing the first monthly advance for the equity benchmarks this year.

The monthly rally for the Dow and S&P 500 would mark their best since 1987 and the best April since 1938, according to Dow Jones Market Data. The Nasdaq Composite’s rise would be its best since 2000 and its best April on record, while the small-capitalization Russell 2000 index
RUT,
-3.68%

is on track for its sharpest monthly rise since 2011 and its best April since 2009.

On top of that, the major benchmarks are roughly 30% off bear-market lows put in on March 23.

Apparently, stock-market investors are betting that the viral outbreak that has devastated the jobs market, pushing the total number of Americans to around 30 million and likely driving the unemployment rate to the worst levels since the Great Depression, is likely to eventually subside.

So what does that mean for investing at the beginning of May.

While this strategy has been true over the long term, as MarketWatch’s Mark Hulbert points out here, it hasn’t been true in recent history, with seven of the past eight years (see attached table), producing positive gains in the six-month sell period, as shown below in data compiled by LPL Financial.

Over the longer term, the strategy is a time-tested one, writes Ryan Detrick, senior market strategist at LPL Financial, who says that the coming six-month period has “indeed been the worst six months of the year, up only 1.5% on average,” (see attached table):

That said, Detrick says the April bounce for stocks means “a well-deserved pullback during these troublesome months is quite possible.”

That thinking gibes with some other strategists, reports MarketWatch’s William Watts, who notes that Barry Bannister, chief institutional equity strategist at Stifel, who had one of the most bullish calls at 2,950 on the S&P 500, believes that stocks may struggle for further gains after the Federal Reserve’s monetary policies laid the groundwork for the current rally.

The S&P 500 presently stands at 2,905, down 1.2% from Wednesday’s close as stocks face headwinds Thursday afternoon.

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interrupts NASA-SpaceX

Elon Musk interrupts NASA-SpaceX call during question about his coronavirus views: ‘Move on’ – CNBC

Elon Musk, CEO of Tesla and SpaceX.

Peter Parks | AFP | Getty Images

Elon Musk is having issues with conference calls lately.

Thursday afternoon, the SpaceX CEO unexpectedly spoke up during a NASA conference call after the agency’s administrator, Jim Bridenstine, was asked about Musk’s recent comments on the coronavirus pandemic.

On Wednesday night, Musk, also CEO of Tesla, called shelter-in-place orders because of the virus “forcibly imprisoning people in their homes against all their constitutional rights,” on the automaker’s earnings call. He’s also made controversial comments on Twitter about the subject.

A day later, The Atlantic’s Marina Koren asked NASA’s Bridenstine for his view on Musk’s statements, given the agency’s notably more cautious approach to the coronavirus crisis.

“I would need to see specifically what was said,” Bridenstine said. “What I’m in charge of is how NASA responds and I’ll let SpaceX answer for how they respond to coronavirus.”

Koren asked for clarity on how that might change the agency’s close working relationship with SpaceX. Then Musk cut in.

“I think this is a different subject,” Musk said. “Wrong press conference, move on.”

NASA had not yet introduced Musk on the call, which was discussing nearly $1 billion in contract awards that the agency had just announced to companies including SpaceX. The contracts are for work on lunar landers that NASA wants to use to land astronauts on the Moon by 2024. Near the end of the call NASA introduced Musk. He gave a statement of appreciation toward the agency for its support of SpaceX. 

Bridenstine noted during his response that NASA employees have died to Covid-19.

“We at NASA have taken the coronavirus pandemic very seriously,” Bridenstine said. “We’ve had a number of people infected by it and, in fact, we’ve lost lives because of it at the agency.”

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Amazon beats

Amazon Q1 beats on net sales of $75.5B but posts net income of $2.5B, down $1B on a year ago – TechCrunch

Amazon has been one of the biggest names synonymous with how the consumer masses are experiencing life under lockdown: its site lets you buy anything from soup to nuts, from books to baking pans for all your sourdough; and via its streaming services, it gives you many ways to stay entertained. But it can also be a source of major frustration when you find yourself unable to book slots for deliveries, or are facing an army of sellers trying to price gouge you for hot items like masks or toilet paper.

Today, the company reported first quarter earnings that bore out the first of these in spades, but at a cost to profitability as it works to serve a public under a whole new set of challenging conditions.

The company reported net sales of $75.5 billion, up 26% on a year ago, a huge boost on the $59.7 billion it made in net sales in the first quarter a year ago. Indeed, $41 billion of the sum was attributable to product sales and $33 billion to services (which includes AWS, but also streaming and other non-physical goods).

But earnings per share took a hit, with basic EPS at $5.09 and diluted EPS at $5.01, and net income declining down to $2.535 billion versus $3.561 billion a year ago.

Operating income was also down, to $4 billion versus operating income of $4.4 billion in the same quarter a year ago.

Analysts on average were expecting EPS of $6.25 on revenues of $73.61 billion in sales. It was a repeat of the pattern we saw from eBay’s earnings yesterday, albeit on a much, much bigger scale.

On top of all this, the company provided guidance that indicated that it could swing into an operating loss in Q2. It said it expected net sales of between $75.0 billion and $81.0 billion, or to grow between 18% and 28% compared with second quarter 2019 (but largely flat with this quarter). But operating income is expected to be between negative $1.5 billion and $1.5 billion, versus $3.1 billion a year ago. “This guidance assumes approximately $4.0 billion of costs related to COVID-19,” the company said. 

The results sent Amazon’s stock up nearly 5% in after-hours trading.

Jeff Bezos, Amazon’s colourful founder and CEO, acknowledged the challenges even the mighty Amazon is facing, but also reiterated, similar to Q2 guidance, that the company plans to double down on spending to face up to serving people during the COVID-19 pandemic, whatever it might bring. It’s a long statement (in what is a very, very wordy press release overall):

From online shopping to AWS to Prime Video and Fire TV, the current crisis is demonstrating the adaptability and durability of Amazon’s business as never before, but it’s also the hardest time we’ve ever faced. We are inspired by all the essential workers we see doing their jobs — nurses and doctors, grocery store cashiers, police officers, and our own extraordinary frontline employees. The service we provide has never been more critical, and the people doing the frontline work — our employees and all the contractors throughout our supply chain — are counting on us to keep them safe as they do that work. We’re not going to let them down. Providing for customers and protecting employees as this crisis continues for more months is going to take skill, humility, invention, and money. If you’re a shareowner in Amazon, you may want to take a seat, because we’re not thinking small. Under normal circumstances, in this coming Q2, we’d expect to make some $4 billion or more in operating profit. But these aren’t normal circumstances. Instead, we expect to spend the entirety of that $4 billion, and perhaps a bit more, on COVID-related expenses getting products to customers and keeping employees safe. This includes investments in personal protective equipment, enhanced cleaning of our facilities, less efficient process paths that better allow for effective social distancing, higher wages for hourly teams, and hundreds of millions to develop our own COVID-19 testing capabilities. There is a lot of uncertainty in the world right now, and the best investment we can make is in the safety and well-being of our hundreds of thousands of employees. I’m confident that our long-term oriented shareowners will understand and embrace our approach, and that in fact they would expect no less.

Of note: Amazon Web Services accounted for $10.2 billion in sales, up 33% on the same quarter a year ago. North America accounted for about $44 billion of the company’s net sales, versus $19 billion for the international segment.

And while services are not quite yet overtaking product sales, the company is seeing its services revenues are growing much faster, at 33% versus 22%. Services include not just video streaming, but grocery delivery and other non-physical paid products that Amazon provides.

At a time when we’ve seen tens of thousands of people laid off across the technology sector, Amazon has been one of the few companies to hire, specifically to staff up with 100,000 extra workers across warehouses and its logistics network to meet surging demand from buyers. That has not always been smooth sailing however, with accusations of poor and potentially health-threatening working conditions.

This has been a thorny issue for the company, so it’s no surprise that in its earnings report, it prominently reminded investors that it has made “over 150 significant process changes in our operations network and Whole Foods Market stores to help teams stay healthy — and we conduct daily audits of the measures we’ve put into place.”

It also noted that it has procured 100 million face masks (presumably not on Amazon itself, where economical ones have been very hard to find) and are requiring that they be worn by all associates, drivers and support staff in our operations network. “We purchased more than 1,000 thermal cameras and 31,000 thermometers, which we are using to conduct mandatory daily temperature checks for employees and support staff throughout our operations sites and Whole Foods Market stores,” it noted.

Those thermal cameras have also, however, been a point of contention: Reuters this week reported that those cameras were sourced from Dahua, a Chinese company currently blacklisted by the U.S. government.

More to come.

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Bloomberg Cuomo

Cuomo, Bloomberg detail plan to trace Covid-19 contacts – POLITICO

Andrew Cuomo

Andrew Cuomo. | John Minchillo, File/AP Photo

ALBANY — New York is preparing to deploy thousands of state workers and others to trace the movements of those who have come into close contact with individuals with Covid-19.

Gov. Andrew Cuomo said Thursday that the tracing effort, led by former New York City Mayor Mike Bloomberg, will require anywhere from 6,400 to 17,000 tracers depending on projected cases, a baseline of about 30 for every 100,000 people in infected areas. The tracing effort will be a key part of the state’s reopening strategy.

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Some public health experts have cautioned that focusing too much on large-scale contact tracing could divert needed resources and attention away from other important efforts to combat the spread of Covid-19.

Cuomo told reporters that the “army” of tracers will be needed.

“Yesterday we tested 4,681 people who were positive. … How do you do now communicate with 4,681 people, trace back all the people they’ve been in close contact with in the last 14 days and contact those people?” he said at a morning news conference. “That is an overwhelming scale to an operation that has never existed before.”

The governor noted that even with thousands of tracers, it will remain challenging to trace, contact and isolate all individuals who may have been exposed to the virus over the two-week period, particularly those who were in public settings.

“My instinct is, if you were in Target and you don’t know any names of who you came into contact with, I don’t know what you would do with that,” he said.

Bloomberg Philanthropies will work with Johns Hopkins University and the state Department of Health to immediately begin recruiting, interviewing and training tracers, who will be sent out across the tri-state region. Cuomo said the state will tap DOH employees and other government workers for the effort, in addition to hiring new tracers.

Bloomberg, who joined Cuomo via video conference for the announcement, said he’s working with a staffing organization, as well as with SUNY and CUNY, to recruit and identify contact tracers. Once hired, those individuals must complete and pass a training class developed by Johns Hopkins, which can be done remotely.

Bloomberg said a “comprehensive playbook” for the tracing strategy — which utilizes new smartphone reporting and data collecting applications — will be made available to all local, state and international leaders looking to track the spread of Covid-19.

“That way the work we do here in New York really can help fight the virus globally,” he said.

New York City Mayor Bill de Blasio, who also spoke briefly at Cuomo’s news conference, noted that the city is hiring 1,000 contract tracers with health care backgrounds “to supercharge this effort.” De Blasio and Cuomo both announced plans to ramp up contact tracing for the coronavirus last week.

“The test and trace approach is going to change everything,” the mayor said via video conference.

But Marc Lipsitch, a professor of epidemiology and director of the Center for Communicable Disease Dynamics at Harvard University’s T.H. Chan School of Public Health, said he believes contact tracing “in this current setting, is going to be a fairly modest contributor [to reopenings] because it quickly can overwhelm.”

“It’s easy to overwhelm a relatively constrained group of people trying to do contract tracing,” he said in a call with reporters. “And because it’s so resource-intensive, it diverts public health efforts away from other activities.”

Anna Gronewold contributed to this report.

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COVID symptoms

“COVID toes” and other skin symptoms may be a sign of coronavirus – CBS News

There is still much to learn about the novel coronavirus, including a wide range of symptoms that appears to be expanding. Common symptoms of the respiratory illness include fever, cough, shortness of breath and chills, but some doctors have reported less obvious symptoms in some patients — including what some are calling “COVID toes” and other skin ailments.

Esther Freeman, director of Global Health & Dermatology at Massachusetts General Hospital and an assistant professor a Harvard Medical School, said “COVID toe” cases look similar to pernio or chilblains, a condition of inflamed blood vessels caused by cold temperatures.

“We’re seeing this inflammatory response that we would normally see when someone was exposed to the cold temperature… like someone who has been playing outside with wet socks,” Freeman told CBS News. “However, in this setting, we’re seeing it in warm climates and we’re seeing it in patients who have been indoors and sheltering in place.”

Freeman said it’s not unusual for a virus to cause a rash, so most dermatologists aren’t surprised that COVID-19 could cause skin symptoms. “What is surprising to me are these ‘COVID toes,’ these pernio-like lesions…because we haven’t seen as many reports of these in other viruses.”

Freeman is a practicing dermatologist at Massachusetts General Hospital who has been seeing patients via tele-health video appointments. “I have seen more toes in the past two weeks in my clinic than I have in my entire previous career combined,” said Freeman, who is a member of American Academy of Dermatology (AAD) COVID-19 task force. 

Aside from seeing skin symptoms in her own patients, Freeman has also received examples of these symptoms from health care providers all over the world. The AAD COVID-19 task force set up an international registry for physicians to send in examples of dermatological manifestations of COVID-19, to help further the study of these symptoms. Physicians from 21 different countries have sent in information to the registry so far.

Freeman said “COVID toes” have been seen in both children and adults. They are sometimes present along with more typical coronavirus symptoms, and sometimes they are the only symptom the patient is experiencing. “Actually, about half of the registry is experiencing something other than toes,” Freeman said. 

Some physicians have also reported seeing skin conditions that look like morbilliform (measles-like) rashes, hives or chickenpox. 

In fact, one of the first case series of dermatologic manifestations included 18 Italian patients with several skin abnormalities including redness, hives and rashes, often on their torsos, Freeman and her colleagues write in the Journal of American Academy of Dermatology.

Freeman says her own patients tend to come to her with two main concerns. “The first thing they want to know is ‘My toes are purple, am I going to get really sick?’ I can be reassuring that most of the patients in our registry, most of the data that we’re looking at, are doing really very well,” Freeman said. “The second thing my patients want to know is, ‘Am I potentially infectious? Could I be infecting my family members?'”

Freeman said it is important to be cautious because some “COVID toe” patients might still be infectious and should talk to their doctor about getting a coronavirus test.

“The overall message I want to tell the public is not to panic,” Freeman said. “Most of our patients who have these ‘COVID toes’ are doing extremely well.”

“If you need to go to the ER because you’re otherwise sick or you have other symptoms you need to be evaluated for, that’s fine. But if the only symptom you have is purple toes, you don’t need to go rushing into the ER,” Freeman said, adding that if a patient does experience toe or skin abnormalities, they should talk to their physician. 

screen-shot-2src2src-src4-3src-at-1-31-23-pm.png
A group of researchers from Belgium and Oregon published a study documenting a case of so-called “COVID toes” in a 23-year-old man.

JAAD


A team of dermatologists from Brussels, Belgium and and Portland, Oregon have also studied toe and skin infections in relation to COVID-19. In a case report published in JAAD, they say it’s important for dermatologists to recognize the signs.

The researchers write about a 23-year-old man who had “acute-onset” purplish and painful plaques on his toes and the outer side of his feet for three days. For several days before that, he’d also had a low-grade fever and dry cough.

After a complete skin examination, the patient tested positive for COVID-19. The researchers say he was diagnosed with “COVID-19 infection–induced chilblains,” the medical term for the skin sores. Similar cases have been observed by French and Belgian dermatologists, but had not been previously reported due to lack of testing, the researchers said.

“Young patients presenting with chilblains have lacked criteria sufficient to allow for a COVID-19 PCR test,” according to the study. “Because of the recent outbreak of chilblains, concurrent with the increase of COVID-19 cases, COVID-19 has been widely suspected as the etiology,” or cause, they write.

This study looked COVID-19 chilblains cases in children and young adults, whose feet have been more affected than their hands.

“Chilblains may be the inaugural symptom of COVID-19, and a fever and dry cough may be minimal or even absent,” according to the study.

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CeeDee prestigious

CeeDee Lamb to wear prestigious No. 88 for Cowboys, formerly worn by Dez Bryant and Michael Irvin – CBS Sports

Being a first-round pick already comes with a great amount of pressure. When you add that not only are you a first-rounder of the Dallas Cowboys, but are also donning a number most recognized with greatness at your position, you’re kicking in the nitrous to those expectations. That doesn’t seem to bother Dallas’ first selection at the 2020 draft in CeeDee Lamb as the receiver will be following a similar path to a number of Cowboys greats and wear No. 88. 

Of course, this is an extremely prestigious number in the franchise’s history as three former No. 88s (Drew Pearson, Michael Irvin and Dez Bryant) are currently in the top five of the club’s all-time receiving yards list. 

Lamb wore No. 2 during his days at Oklahoma and expressed publicly that he’d be interested in wearing No. 10 in the NFL, but owner Jerry Jones seems to have persuaded him to pick up the mantel to not only follow in that tradition, but to also honor one of Jones’ old teammates at Arkansas in Jerry Lamb, who wore No. 88 and recently passed away. 

“I said in honor of my great friend who just passed this year that we’re going to have his namesake come on here and wear old number 88. Just like Michael and Dez and those guys,” Jones said last weekend. “And we’ve got us a wide receiver. And let me tell you one thing, if he’s got the competes and heart of that Jerry Lamb, he’ll be bad to the bone.”

Pearson was first to put the No. 88 on a pedestal with the Cowboys, spending his entire ten-year NFL career in Dallas. Over that time, he was named to three Pro Bowls and led the league in receiving in 1977. He was later named to the NFL’s All-Decade team for the 1970’s and was inducted into the Cowboys Ring of Honor in 2011. 

After Pearson put down the number, Michael Irvin picked it up and sent it into legendary status as he enjoyed a Hall of Fame career with Dallas, winning three Super Bowls and finishing his career as the team’s leading receiver with 11,904 yards. 

Upon being selected in the first round in the 2010 draft, Dez Bryant took the baton and had his own stellar career wearing No. 88 for Dallas. For a four-year stretch between 2011-2014, Bryant was one of the most feared receivers in the entire NFL, averaging around 1,215 yards receiving for a season to go along 84 receptions and just over 12 touchdowns. He’s also the club’s all-time leader in touchdowns with 73. Speaking of Bryant, who has been flirting with the idea about coming back to play with the Cowboys, this number assignment could be an indication that Dallas is moving on. 

As for Lamb, he comes to Dallas with tremendous talent, tallying 62 receptions for the Sooners in 2019 for 1,327 yards and 14 touchdowns. Alongside Amari Cooper and Michael Gallup, not only will he have a chance to start living up to that No. 88 title, but could form one of the deadliest receiving trios in the league.  

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quarreling Universal

Universal and AMC are quarreling: What it says about Hollywood and its future – CNBC

Temporarily closed signs hang on doors at an AMC Entertainment Holdings Inc. movie theater in the Georgetown neighborhood of Washington, D.C.

Bloomberg

Tensions are running high in the film industry.

Studios and exhibitors have been faced with difficult decisions in the wake of the coronavirus pandemic, as both are grappling with how to keep their businesses afloat long enough to weather movie theater closures and social-distancing restrictions.

Theater owners had been understanding when movies that had already been in theaters went to the home video market early or theatrical releases that had already done the bulk of their marketing skipped theaters for a video on-demand launch. However, the relationship between exhibitors and studios reached a boiling point Tuesday, resulting in the world’s largest theater chain announcing that it would no longer play movies from one of the biggest studios in Hollywood. 

This quarrel has brought to the surface decades-long concerns over the vitality and longevity of the traditional theatrical experience and called into question if movie theaters will truly be able to go back to normal after this outbreak ebbs. It’s also created a crowded calendar of movie releases for studios to puzzle over as they look to maximize profits. The result could be a rethinking of this longstanding relationship. 

Trolls World War

After taking a victory lap in the press over the digital success of “Trolls World Tour,” NBCUniversal CEO Jeff Shell suggested on Tuesday that the studio may start to do more simultaneous releases of its movies in theaters and on-demand, even when theaters reopen.

Exhibitors were already feeling antagonized by Universal after the studio announced that “Trolls World Tour” would have simultaneous release, even before theaters had officially closed. Shell’s new comments only exacerbated theater owners’ fears and frustrations.

The National Association of Theatre Owners quickly responded, saying the performance of “Trolls World Tour” was indicative of hundreds of millions of people being isolated in their homes and seeking entertainment, not a shift in consumer viewing preferences.

AMC took it a step further, saying it would no longer showcase Universal’s film slate at its more than 1,000 locations.

Still from “Trolls World Tour.”

Universal

“AMC’s position in this matter, which is to never show Universal pictures again, is absolutely not only the correct response for a theater chain to have, but really it’s their only response,” Tom Nunan, a lecturer at the UCLA School of Theater, Film and Television, said. “That kind of comment from Jeff Shell could be a death knell for theater chains.”

Since 2010, when Netflix shifted from renting DVDs to launching a streaming service, the theatrical model has become increasingly threatened. Consumers typically are only venturing out to theaters three to five times a year, and with more content becoming available on more streaming platforms, there’s a fear that movie theaters could continue to take a hit.

Of course, there are studies that suggest the people who go to see movies in theaters more frequently are also the people who consume more streaming content.

What’s at stake

Theater owners are in a particularly vulnerable position during the coronavirus outbreak because their cinemas are closed and their revenue has shrunk to essentially zero. Major players in the space have been forced to layoff and furlough employees, suspend dividends, cut salaries and draw down on debt revolvers in order to keep bankruptcy at bay.

“We are dealing with a wrecked business,” Jonathan Kuntz, who teaches film history at UCLA School of Theater, Film & Television, said. “And AMC knows it, and their investors know it and it’s why you are seeing an imminent risk of death to that company.”

Theaters thrive on having the exclusive first window for a film. It’s what drives consumers out of their homes. If studios were to start releasing films in theaters and on-demand at the same time, it would not only take ticket revenue away from exhibitors, it would also mean concession revenue would take a hit.

Last year, the movie theater industry took in $15 billion in revenue domestically, a combination of around $11 billion in ticket sales and $4 billion in concessions. Globally, ticket sales soared to a new high of $42.5 billion.

“Theater Closed” signs are posted in front of the AMC Montebello, as the US chain of AMC movie theaters closes for 6 to 12 weeks, On March 17, 2020 in Montebello, California, as the coronavirus (covid-19) epidemic leads to restaurant and school closures and workers working from home in an effort to encourage social distancing.

Frederic J. Brown | AFP | Getty Images

Some theaters have rallied behind AMC’s statement, like Cineworld’s CEO Mooky Greidinger, who agreed that if a studio did not respect the traditional theatrical windows and decided to release a film on-demand and in theaters on the same day, Cineworld would not show that film.

Similarly, Sonny Gourley, the senior vice president of film at Marcus Theaters, said his chain does not currently do the simultaneous ‘”day-and-date” releases, but would still show theatrical exclusive releases.

While the coronavirus still has theaters on lockdown, there is an expectation that more studios will opt to place films on-demand or on their own streaming servies.

…The majority of movies, whether we like it or not, are being consumed at home, and it’s not realistic to assume that we’re not going to change.

Jeff Shell

CEO, NBCUniversal

So far, only a handful of films have decided to forego the theatrical experience and go straight to the home market. Warner Bros. “Scoob” will arrive on-demand in May, Disney’s “Artemis Fowl” will go to Disney+ and Paramount Picture’s “The Lovebirds” was scooped up by Netflix. To be sure, none of these films are trying to open in theaters and through streaming or on-demand at the same time. 

“We are going to get to a point where the public is going to clamor for a VOD release,” Eric Schiffer, CEO Patriarch Organization and Reputation Management Consulting, said. “There’s such a craving for something that will hold you and take you on a journey and help you escape the reality that we are in today.”

When theaters reopen

It’s no surprise that studios are looking for alternative release strategies during this time. The lack of movie theaters has resulted in the majority of film titles being pushed to later dates on the theatrical calendar. 

Not to mention, there is growing concern that while consumers may be itching to leave their homes, they may not be ready to flock back to theaters. A survey by Coresight showed 44% of those polled would look to avoid movie theaters even after lockdown orders are lifted, and cinemas are allowed to reopen. 

“Universal has a good reason to move forward with far more VOD offerings,” Schiffer said. “To me, that’s the future anyway. Right now people would rather chew glass than go into a theater.”

Theater owners are already planning for what happens when they are able reopen to the public. Currently, most are looking at doing reduced capacity seating, either allowing people to distance themselves or only selling every other seat in each theater. Masks will likely be optional, unless the local government has said otherwise, but will be encouraged. Employees will wear protective gear and conduct more frequent sanitation.

Gourley said ticket prices at Marcus will be lowered in the weeks that there are no new releases and the cinema is showing library movies. There will also be concession deals available for movie-goers.

He said Marcus is looking to have “epic-type movies” like “Indiana Jones” and the “Harry Potter” films to draw people back to theaters ahead of the first new movie release of Christopher Nolan’s “Tenet” in July.

What the future holds

While theater owners are confident that customers will return in droves, others as skeptical. Some predict that movie theaters will become a place only for big budget blockbusters and franchise films while smaller budget comedies, dramas and genre films will move to on-demand.

In this scenario, there is an expectation that there will be filmmakers that are looking to be Oscar contenders that will still seek out theatrical releases for their films as well as those that see the big screen as the place they want to showcase their work. Think, Nolan, Wes Anderson and James Cameron, among others.

“I spent a big chunk of the last decade in the film business, and there’s no question that theatrical is someday again going to be the central element to our business in the film business,” Universal’s Shell said during an earnings conference call Thursday. “It’s how people make their movies and how they expect their movies to be seen.”

“But the flip side is the majority of movies, whether we like it or not, are being consumed at home, and it’s not realistic to assume that we’re not going to change,” he said. “That this part of the business isn’t going to change like all parts of the business are going to change.”

An employee fills a bag of popcorn in the concessions area inside a Cineplex Cinemas movie theater.

Bloomberg

The increased tension between studios and movie theaters could also lead to new negotiations over the split of ticket sales.

Universal revealed that it was able to keep 80% of the rentals of “Trolls World Tour” instead of the 50% deal that studios have with movie theaters. So, while “Trolls World Tour” has garnered less money than its predecessor “Trolls,” Universal has actually been able to pocket more money.

Of course, part of that is due to the fact that parents are stuck at home and looking for new content to keep their kids occupied. So, it’s unclear if the film would have seen the same success had the coronavirus not forced people to remain inside. 

Still, the disparity between what studios stand to make percentage wise from video on-demand is tempting. Sure, a film like “Avengers: Endgame” would not be able to make the $2.8 billion in sales it tallied in theaters from an on-demand market, but smaller budget films certainly could have lucrative runs using this strategy.

“Theaters need to have a more attractive model,” Nunan said, noting that studios pay all of the marketing and production costs for a film, but only haul in 50% of a film’s ticket sales.

Since 1948, studios have not be allowed to own chains of exhibition locations, so they’ve been forced to work with theaters in order to have national showcases of their films. However, that church-and-state relationship is seen as outdated to many in the industry.

For the most part, industry experts predict that the relationship between theaters and studios will continue; that cooler heads will prevail and Universal and AMC will be able to come to some sort of agreement.

“There has to be some middle ground here,” Nunan said. “It can’t continue going the way it is.”

Disclosure: Comcast is the parent company of NBCUniversal and CNBC.

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Gavin Governor

Governor Gavin Newsom Closes Orange County Beaches, Even As Many States Begin To Open Up – Deadline

Citing images of beachgoers crowding the sand at Newport Beach last weekend, California Gov. Gavin Newsom announced Thursday that he would close the beaches in Orange County.

“We’re guided by health,” the governor said while calling the closing a “temporary pause” and citing the need to “meet the conditions as they change.”

It had been reported that Newsom would close all the state’s beaches from the Mexico border to the northern boundary with Oregon. Those reports were based on a police memo obtained by media. Asked about the memo, Newsom said with a smile, “That was their memo, but that memo never got to me.”

On Monday, Newsom signaled concern about Newport Beach and some beaches in Ventura County.

“We can’t see images like we saw, particularly on Saturday, in Newport Beach and elsewhere,” Newsom said Monday. “This virus doesn’t take the weekends off. This virus doesn’t go home because it’s a beautiful sunny day around our coasts.”

On Tuesday, despite Newsom’s admonition, the Newport’ Beach City Council voted to keep its beaches open, with additional enforcement of physical distancing.

L.A. County Coronavirus Update: 733 New Cases As CDC Issues Guidelines For Disinfecting During Reopening

Later, a member of the Orange County Board of Supervisors called news of Newsom’s expected Friday announcement an “overreaction.”

This as, according to CNN, at least 31 states have plans to begin loosening restrictions in the next few days. Ironically, despite the beach order, California is among them.

On Tuesday Newsom revealed a “California Resilience Roadmap,” which plots out a four-stage reopening. According to the Roadmap, the state is currently at stage one.

The next stage will be “gradually reopening low-risk workplaces,” such as retail, manufacturing, offices and more public spaces. These first reopenings could happen within weeks. Movie theaters and sporting events (without crowds) would open in stage 3.

CA has made progress bending the curve but the risk of #COVID19 is still very real.

Today, Governor @GavinNewsom announced details on how CA plans to modify the Stay-At-Home order in the future.

These modifications are based on science, health & data & will happen in 4 stages: pic.twitter.com/KUDhu7sowk

— Office of the Governor of California (@CAgovernor) April 28, 2020

Newsom announced that officials are contemplating a July or August start for the fall school term. “We have made no decisions,” the governor said at his daily briefing, but noted officials “recognize there’s been a learning loss.”

NYC Mayor’s Office Leads Early Talks About Road Back For Film And TV Producers In COVID-19 Epicenter

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Bollywood Irrfan

How Bollywood Icon Irrfan Khan Changed Hollywood – VICE News














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Published on 30-Apr-2020

Irrfan Khan was one of India’s most recognized actors best known for his roles in “Slumdog Millionaire,” “Life of Pi” and “Jurrasic Park.”

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