COVID is still costing independent cinema a burden – The Hollywood Reporter
Vaccinations are up, hospitalizations are down and, as evidenced by the throngs of international shoppers at the Lowes Hotel for AFM this week, global travel is back. But for the industry, COVD, and the complications it brings to independent film financing, insurance and production, is here to stay.
“The financial impact of COVID, logistics, COVID insurance, testing costs, etc. are going to be a long time in the making,” notes Thunder Road Pictures partner Erica Lee (John Wick, Sicario), speaking this week at the AFM. “Which is frustrating, because it’s more money not getting on screen.”
Well-established COVID protocols — from regular testing, mandatory masks for off-camera crew, and “bubble” systems that isolate different sections of a production to contain any potential outbreaks — have been standard practice and have dramatically reduced the risk of a total shutdown. But the associated costs, which can represent up to 10% of a film’s budget, can be crippling. And that’s before often expensive COVID insurance policies are factored in.
“When it comes to insurance, it gets better,” notes Kirk D’Amico, president and CEO of Myriad Pictures. “A year ago, bond companies required at least $1 million in COVID coverage. Now, for the same type of project, you might be able to get by with around $500,000.
But in the United States, the lack of insurance market regulation means that prices for COVID insurance can vary widely. Myriad has started filming her western directed by Walter Hill Dead for a dollar, featuring Christoph Waltz and Willem Dafoe just as new COVID variants were on the rise, driving up insurance premiums.
Even if you have COVID coverage, collecting on these policies can be tricky. In September, a federal judge dismissed a lawsuit filed by The morning show producer Always Smiling Productions v Chubb National Insurance Company, claiming $44 million in COVID-related damages.
The insurer had agreed to pay only $1 million. The courts dismissed similar lawsuits brought by Creative Artists Agency and United Talent Agency against their insurers, ruling that their policies did not provide the coverage the agencies thought they did. Paramount successfully settles with Federal Insurance Company for COVID costs on Mission: Impossible – Dead Reckoning Part 1whose financial details have not been disclosed, remains the exception.
In several countries, including Canada or Australia, governments have stepped in to provide safety nets to cover COVID-related costs, if an actor falls ill or production has been halted. Efforts to pass similar legislation in the United States have so far stalled.
Last year, Congresswoman Carolyn Maloney (D-NY) revived plans for a federal Pandemic Insurance Act (PRIA) that would require insurers to provide COVID coverage (many are still refusing) and would see the government take on 95% of insurers’ pandemic-related claims. But the PRIA remains in limbo, a victim of Washington’s partisan deadlock.
“Regulation would help stabilize the market,” D’Amico notes. “It’s not like it would save the industry, but it would make things less volatile.”
Without the legal clarity that federal legislation would provide, independent producers continue to hedge their bets.
“Looking at the packages here on the market, you see key attachments, like the main thread, coming with COVID exceptions,” says John Freidberg, president of production, sales and distribution Black Bear International. “So you’re guaranteed Star X. Unless…COVID.”
This story first appeared in the November 4 daily issue of The Hollywood Reporter at the American Film Market.