Theater chains get smacked in wake of shootings

Shares of Cinemark, which operates the Aurora, Colorado theater where the massacre took place, fell 4.6 percent. Regal, another publicly held theater chain, lost 4.4 percent. The overall market was also down today, but not nearly as much in percentage terms. Stocks of companies that go through one of these events - airlines comes to mind after a crash - will often take a beating for the first few days. In the calculus of Wall Street, a tragedy of such dimensions is bound to result in lost business. Just as travelers might select another carrier, moviegoers could choose another cineplex. There also might be unexpected costs to cover lawsuits and beefed-up security. None of this, however, is likely to have a big effect on overall industry earnings. From THR:

MKM Partners analyst Eric Handler said the effects of the shootings on exhibitors should be "negligible near-term." He explained: "I think right now there is so much interest in The Dark Knight that people aren't going to be scared out of going to the movies this weekend." But there could be some pressure on profits. "From a cost perspective, maybe we see an increase in spending for added security," Handler said.

Calls for stringent security measures, including metal detectors, are predictable in the aftermath of the tragedy, but it's not going to happen. It's not only too expensive and inconvenient, but probably unnecessary. Going to the movies has become a most unpleasant experience (cell phones, talkers, etc.), but it's seldom dangerous. The CEO of Cinemark called the shooting an "isolated incident" involving an "isolated, deranged gunman." Perhaps not the most politic way of putting it, but you can understand the pushback. From the NYT:

Historically, there have been remarkably few major incidents of movie-theater violence, given the vast number of attendees -- about 1.3 billion tickets were sold in the United States last year. In 2010, one viewer stabbed another in the neck with a meat thermometer at a showing of "Shutter Island," in Lancaster, Calif., and a man shot himself to death a screening of "Watchmen" in Eugene, Ore., the year before. But incidents have usually been isolated, contained and showed little or no relationship to what was showing on-screen. Following the 9-11 terror attacks, exhibitors briefly flirted with the idea of banning backpacks in theaters. But the notion was largely dropped as unworkable, especially in New York City, where the many thousands of fans who do not drive cars often show up at the movies with a bulging bag.