Hurricane Sandy is “more serious, and has caused more damage that has affected more shows and movies, than I can remember” from a similar disaster, says Brian Kingman, managing director of Gallagher Entertainment, a leading insurance broker for producers. It’s still too early to say how much the storm will cost media and entertainment companies, or the firms that insure them. Movies and TV shows hit by a weather disaster often lose more from carrying costs tied to shooting delays than from property damage. So a lot depends on how quickly services resume in production sites including New York City, where 1.8M people are without electricity, mass transportation is down, and several major bridges and tunnels are still closed. The NYC Mayor’s Office of Media and Entertainment revoked all film permits for Monday and today. It says that it will approve permits tomorrow for “qualified stages” but not exterior shoots.
Officials are eager to minimize delays following a decade-long campaign to cultivate a production-friendly image for the Big Apple. Producers of films, TV, news, commercials, and digital content spent $7.1B in New York City in 2011, up from $4.2B in 2002, according to a study by The Boston Consulting Group. But the city has struggled to hang on to film production after 2007 when nearby states including Massachusetts, Pennsylvania and Connecticut began to offer tax credits that in some cases were twice as generous as the 15% available from New York State and New York City.
Meanwhile, people who specialize in estimating losses from catastrophes are just beginning to crunch the numbers for Hurricane Sandy. For example, risk modeling firm Eqecat says the total economic damage for all industries could go as high as $10B, about half of which might be covered by insurance. Media and entertainment enterprises will shoulder a meaningful amount of losses from cancelled ads, and movie and theater performances — as well as infrastructure repairs. Last year’s Hurricane Irene, which resulted in an estimated $15.8B in total losses, provides some insight into potential damages: The storm traveled from Florida to New England, forcing about 1,000 movie theaters to close during the August 27 weekend. On a comparatively slow period for box offices, it contributed to a 31% decline in sales vs the same period the previous year. Broadway theaters also suffered after closing that Saturday and Sunday: Over the three-days including Friday, ticket-buyers spent $11.6M, down 28% from the equivalent period in 2010. Casinos and theme parks also lost millions from the storm that hit during the summer vacation season.
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