The cost of building and operating a theme park on the scale of Westworld has been considered since the shows inception. CNBC published such a cost estimate by finding the revenue generated and computing the associated profits/costs from that figure back in 2016. However, in Season 2 we learned that the value of the park is not in the direct revenue stream from visitors but rather the data generated on the guests. This is the greatest market research that money can buy, or be paid for.
By point of comparison. The advertising revenue for Google was $134.81 Billion and for Facebook was $69.66 Billion in 2019. This is multiples of the $20.45 Billion revenue considered in the original CNBC analysis. As there is no clear scheme to monetize the data collected, we will assume that the data is worth the lower bound of these values, i.e., $70 Billion. Thus the total revenue is $90.45 Billion instead, an amount that would have otherwise taken over 4 years to accumulate by Delos Incorporated. Using the same computations from our favorite CNBC analysis, the $24 Billion of annual costs are now completely reasonable with an additional $66.45 Billion in which to pay other operating costs and from which to collect profits.
Now that a robot uprising and massacre has happened, the insurance premiums considered previously will spike as occurs after any large risk. The question is less whether Delos remains solvent following these events, but rather if Westworld would be able to afford to reopen its doors to guests. In short, would Delos be able to purchase insurance, and if not, what payouts would be expected every time an uprising occurs?
With the inherent risks of running Westworld now clear to the world, insurance premiums would likely be similar to flood insurance in the United States. That is, insuring against costly events causing extensive property damage that occur regularly. In order to keep areas prone to flooding affordable, the National Flood Insurance Program was established to provide insurance to private individuals and businesses. Without such a program for robot uprisings, it is unlikely any insurance company would be willing to underwrite any policy post-Season 2.
However, Delos could afford to keep Westworld open so long as guests still want to visit. The 9/11 attacks caused roughly $40 Billion in insurance losses. As the profits from the park are potentially over $65 Billion, this would be affordable so long as massacres occur less than 3 times every 2 years. And with that frequency the guests would surely stop arriving.
We on the internet have talked ad nauseum about the destruction caused by superheroes in movies, see, e.g., . Let’s do that again. But let’s look at the financial implications of that destruction beyond the simple dollar values of loss of property. Specifically focusing on the Marvel Cinematic Universe [MCU]. Before continuing, one important point about the MCU is that it takes place within a world functioning economically much like our world.
With damages over a 5 year period valuing well into the hundreds of billions on top of the usual claims, it is unlikely that the major insurance companies could survive. In 2008, the US government bailed out the insurance giant AIG to the tune of $180 Billion. Thus once losses reached into the hundreds of billions, which was greatly surpassed by the time of the events of Ant-Man, all insurance companies would need to be bailed out!
In The Avengers, neither Loki nor the Chitauri ever expressed intentions to overthrow a government while surrounded by someone who could testify in court. Loki, in captivity in Asgard watched by his brother Thor, would also not be available to testify in open court as to his plans. Though Loki states his intentions to rule over Earth to his brother Thor, the closest statements that Loki makes to someone who could testify in open court are claims of wanting to free humanity from freedom and telling a gathering of people that kneeling is easier and their natural state. As the Chitauri invasion occurs in New York City, which is not the center of any government, the purpose of the invasion could be contested in court, and with good lawyers, could be decided either way.
In Captain America: The Winter Soldier, it is our heroes — Captain America, Black Widow, Falcon, and Nick Fury — who express interest in taking down the quasi-government entity of S.H.I.E.L.D.. However, since four soldiers generally would not be considered an entire army, and as they express no wish to rule in the place of S.H.I.E.L.D. (instead releasing S.H.I.E.L.D.’s secure documents to the internet), this also may not ultimately count as an act of war.
As per the Terrorism Risk Insurance Act, an act of terrorism would need to be stated by the US government (when occurring within United States jurisdiction) as a terrorist act. To qualify, the attack must be part of a scheme to change policy of the United States or otherwise coerce civilians. In my estimation, this would potentially apply to Iron Man 3, Captain America: The Winter Soldier, and Ant-Man.
In fact, since much of the destruction in Iron Man 3 is believed to be the work of a terrorist named the Mandarin, this is likely the outcome for insurance claims. This means that a government backed reinsurance contract would be called upon for large financial losses to the insurance companies. Even upon learning of the actual goals, i.e., the goal of Aldrich Killian, the terrorism designation will likely hold — Dr. Killian was attempting to coerce the actions of the United States government.
For Captain America: The Winter Soldier, it is a much murkier designation — similar to it being an act of war. Since an act of terrorism would, by definition, require a terrorist — and our heroes are free to continue rescuing the Earth in Avengers: Age of Ultron it seems likely that the US government never designated the events of that film as an act of terrorism.
Within the film Ant-Man, the titular hero — Ant-Man — along with fellow conspirators plan to, and succeed in, blowing up the Pym Technologies Headquarters. If this is viewed as an attempt at coercing the United States government in some way, then it would likely be classified as a terrorist attack. However, this is not a clear decision to make.
While act of God is a well understood legal statement, never before has an actual god (Thor, Loki) been available in person. In order to avoid liability, insurance companies might make an effort to claim any damage caused by the Asgardians (Norse gods) is in actuality an act of (a) god. In that eventuality the court system would rule on the question: Is Thor a god? Possibly the greatest court case for television ratings!
These court cases can go either way. The next question is: can those who have been damaged (individuals, property owners, insurance companies, etc…) sue the Avengers? Overall if it went to court our heroes would attempt to use Good Samaritan laws to their advantage. But more specifically:
Iron Man would potentially be personally liable for a large amount of destruction. Having unmasked himself in Iron Man and with a net worth of $12.4 Billion, Tony Stark would prove an obvious target for lawsuits. Additionally, while he works with S.H.I.E.L.D. and the US government on occasions, he is a private individual. Finally, he is a well-known alcoholic, which could color his attempts at a defense, even when attempting to invoke Good Samaritan laws (which will depend on the jurisdiction). On the other hand, his sometimes partner James “Rhodey” Rhodes (War Machine), as a member of the United States Armed Forces, would be protected from personal liability (though only to the extent he was acting in an officially sanctioned governmental capacity).
Thor would likely be protected from lawsuits by either being ruled a god (see above) or, since he is a prince of Asgard, through diplomatic immunity.
Captain America and his partner Falcon (Sam Wilson) may be able to use their positions within S.H.I.E.L.D. and the United States Armed Forces for liability protections (see War Machine above for limitations).
Black Widow and Hawkeye would likely attempt to use the liability protections likely offered by being members of S.H.I.E.L.D. (see War Machine above for limitations).
Ant-Man (Scott Lang) and Hank Pym, wealthy founder of Pym Technologies, may be personally liable for their destruction of the Pym Technologies Headquarters.
Scarlet Witch may be found liable for her actions, though as she joined S.H.I.E.L.D. at the end of Avengers: Age of Ultron, she may attain retroactive immunity for her actions in Johannesburg, Seoul, and Sokovia.
Finally S.H.I.E.L.D. and worldwide governments may face liability as well for their actions in the MCU.
The Financial Aftermath
In the aftermath of all this economic destruction there are two main possibilities:
The first is that the insurance companies are victorious in their court cases, in which case they avoid paying out damages. In this situation, having insurance may be worthless in the MCU. If you live in a major metropolitan area (especially New York) you can be rest assured that your insurance will no longer be worth the paper it is written on because of superheroes and intergalactic conflict, potentially involving gods.
The second is that the insurance companies are unsuccessful in court. In such a situation, the entire insurance industry would likely be on the brink of failure and would require government intervention to stay afloat. This intervention can consist of bailouts (as was done with AIG in 2008), government backed reinsurance (as with the Terrorism Risk Insurance Act in 2002), or full-on nationalization of the insurance industry (as with flood insurance).
The secondary effects are around the financial situation of our heroes. Most notable is the economic well-being of Tony Stark, who may end up defeated and bankrupt due to his own personal liability. And without his financial resources, he would not be able to afford to construct and maintain his Iron Man suits. Additionally, if he attempted to use the resources of Stark Industries, a publicly traded companylisted on the New York Stock Exchange, for this purpose, he may be guilty of several felonies. Hank Pym would likewise be impacted, but his ability to influence superheroics with his wealth remain limited at this juncture. It could be that some form of “Superhero/Vigilante insurance” is created for such individuals, though the premiums would likely be set to such high levels to not be economically realistic — a death spiral would exist.
So the attacks within the MCU are debilitating to the US and global economies. Is any corporation going to be able to take advantage? Yes! Damage Control, a company which handles the cleanup of exactly these events, is poised to become a global economic powerhouse. They may also become an overly dominant force in the construction industry, though due to the aforementioned exodus from major cities may focus solely on (so called) bridges to nowhere.