How Hollywood Joined the Global Movement to Isolate Russia Within Hours

As reported in TheWrap.com by Jeremy Fuster, March 2, 2022

Meetings were held across Hollywood on Monday to work out the process of pulling films from Russian cinemas

After a Monday filled with meetings throughout Hollywood, the film industry joined the growing list of businesses and governments moving to isolate Russia over President Vladimir Putin’s decision to invade Ukraine.

As violence continued to escalate in Kyiv, Kharkiv and other Ukrainian cities, and the Russian ruble hit record lows against the American dollar, studio insiders told TheWrap that Russia was the main topic in motion picture group meetings across Los Angeles as they discussed the logistics of pulling their films out of Russian cinemas.

Over the weekend, the consequences for Russia’s invasion quickly spread beyond government sanctions and into other fields of business and culture. Tech giants like YouTube and Meta cracked down on ad revenue for Russian state-owned channels among other measures; and in the world of sports, perhaps the one closest connected to Hollywood, various governing bodies like FIFA, the International Olympic Committee, and the International Ice Hockey Federation moved to ban Russia from competition.

But unlike sports, Hollywood doesn’t have a single authority that can make such sweeping moves. The Motion Picture Association is a lobbying group, not a governing body; and Hollywood’s top five legacy film studios have very different theatrical slates with films at different stages of the release process and different levels of money already spent on marketing and distribution costs depending on how close a film is to release.

While Russia isn’t as famously lucrative as China, it’s still one of the top markets in the world. According to data from the MPA and Comscore, Russia ranked ninth among all countries in annual box office grosses in 2019 with $946 million grossed. Last year amidst the COVID-19 pandemic, Russian totals reached $600 million, accounting for 2.8% of the $21.4 billion grossed globally and ranking seventh among all countries.

“Russia is not like China where all movie theaters are state-owned,” Boxoffice editor Daniel Loria said. “It’s a bunch of privately-owned chains just like the rest of the world, and they’ll all now find themselves without a lot of major films to screen for the foreseeable future.”

But it’s not just the theater owners in Russia that studios have to notify. Film producer and industry consultant Kathryn Arnold says there’s a long list of individuals and companies that must be contacted when a film is pulled from release with less than a month’s notice.

“If there’s any distribution partners in their output deal, they have to tell them. They would have to contact local publicists and any advertising and media companies to halt their marketing and publicity campaigns,” Arnold said. “Sometimes they’re able to negotiate credit for future dates, though I don’t know if they’d be able to do that in this unique situation.”

“And then beyond theatrical, there’s any streaming, pay-one and television broadcast partners that signed deals to carry these films on TV and digital,” she added. “They were expecting to get these spring blockbusters sometime in the summer, and now it’s not looking like that will happen.”

Compounding the problem is that unlike the release delays forced by the pandemic over the past two years, studios cannot provide home release or theatrical partners with a rescheduled date, as the decision stems from a geopolitical crisis with no clear outcome. Regardless, sources at multiple studios told TheWrap that the discussions among their executives were not about whether or not to pull their films but simply how to go about it and when to make the announcement they would do so.

“It’s an incredibly fluid situation. It’s not changing by the day. It’s changing by the minute,” one studio exec told TheWrap under condition of anonymity. “I can’t speak for all studios, but it was pretty clear for us early Monday that we were not going to be releasing our next film in Russia. It was just a matter of figuring out how we’d carry out that course of action.”

As sunset approached in Southern California while a large Russian military convoy was spotted heading toward Kyiv overnight, the first domino fell from the industry’s biggest studio: Disney.

“Given the unprovoked invasion of Ukraine and the tragic humanitarian crisis, we are pausing the release of theatrical films in Russia, including the upcoming ‘Turning Red’ from Pixar. We will make future business decisions based on the evolving situation,” read Disney’s statement on Monday afternoon.

That announcement triggered the same trend seen in the industry throughout the COVID-19 pandemic: Once one studio makes a move, others quickly follow.

Within three hours of Disney’s statement being released, Warner Bros. and Sony swiftly announced that they would pull their own March releases “The Batman” and “Morbius” from Russia, the former particularly being notable considering it was set to be released in Russia along with dozens of other countries this weekend. Meanwhile, the MPA released its own statement condemning the invasion and pledging its “strongest support for Ukraine’s vibrant creative community who, like all people, deserve to live and work peacefully.”

Early on Tuesday, Paramount joined the growing chorus, announcing it would pull its next upcoming films “The Lost City” and “Sonic the Hedgehog 2” from Russia, with Universal pulling the Michael Bay film “Ambulance” later that afternoon. All studios declined to comment for this story beyond the initial statements.

Hollywood has prided itself for decades on providing escapism during troubled times. But now that escapism, along with much of the world’s financial, social and cultural resources, will be denied to the Russian people as part of efforts by the U.S., European Union, NATO and other major governments to build public pressure against Putin to end the violence in Ukraine.

As with everything connected to the crisis, the long-term impacts the Hollywood lockout will have on Russian exhibitors is impossible to discern at this point. But Loria believes that the financial impact on those theaters isn’t on the mind of even the owners of those businesses.

“I think their focus, as it is with everyone else, is on Ukraine and the violence that is happening there,” Loria said.