Sony cancels release of The Interview

After the Sony hack attackers threatened movie theatres and movie goers if theatres showed the Sony movie “The Interview”, Sony announced today that it was cancelling the release.

USAToday put the production cost of this movie at near $44 Million, which Sony stands to lose if they do not release this movie, but the risks are too great to both theatre owners and Sony if the movie was released and someone – even a copycat – were to blow up a movie theatre.

While some people complained that Sony was giving in to the attackers – and they are – those are the same people that would sue Sony if something happened, so it is a no win for Sony.

As a side note, the Terrorism Risk Insurance Act – the law that was enacted after 9/11 as a backstop for the insurance industry in case of a multi-hundred-million dollar claim as a result of a terrorist act – was not renewed by Congress and expires on December 31st.  While we do not know if Congress will renew it next year, the expiration of TRIA gives the insurance companies the right to cancel terrorism risk policies on January 1st.  Given that a claim could cause an insurance company to become insolvent, it is certainly possible that insurance companies will cancel policies after the 1st, leaving large building owners and events like the Super Bowl on their own to cover risk from a terrorist act that causes a big claim.