The problem with No Time To Die’s release delays further lays bare the fundamental problem at the heart of cinema at the moment. Namely, how can movie studios justify massive budget films at a time when audiences are unwilling to leave the house, let alone to go and watch movies indoors. If a long-running franchise like Bond is battling, then it seems that no studio is safe at the moment. Whether cinemas will survive in the end is a question for another time, but this situation is further proof that the pandemic has thrown the movie business into complete disarray.
A new report reveals just why MGM was so desperate to sell. THR reveals that for every month of delay, MGM is incurring $1 million in interest charges. The studio financed No Time To Die with a large loan, something typical of many movies, but the delay means that interest has come due, and won’t be able to be paid off until the movie is released. The report quotes Hal Vogel, CEO of Vogel Capital Research, who says “MGM is suffering” and the loan repayment was one of the main reasons the studio explored a streaming sale. You can read his full comments below:
MGM is suffering. Every major distributor at this point has a pile of unreleased expensive movies. The pile grows larger by the day. These films are inventory. They are sitting there with no return on their investment. Even with low interest rates, the interest costs are piling up. So going the streaming route is not that crazy. You’ve spent the money. And you’re not getting it back anytime soon.