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Disney Suffers $3.5 billion Hit Due to Theme Park Closures

Disney Suffers $3.5 billion Hit Due to Theme Park Closures

  • Disney has a 3.5 million loss as its theme parks remained closed during the third quarter.
Disney Suffers $3.5 billion Hit Due to Theme Park Closures

The Walt Disney Company revealed on Tuesday their third-quarter earnings which showed the impact of the theme park closures causing a loss of $3.5 billion.

The domestics parks were closed for the whole quarter which accounted for the 85% decrease. Disneyland in California remains closed, while its Downtown Disney shopping district opened last month. Walt Disney World in Florida fully reopened last month and is the only Disney park running in the U.S. Shanghai Disneyland, Tokyo Disneyland, and Disneyland Paris have all reopened but Hong Kong Disneyland recently closed for a second time due to new COVID-19 cases.

“Parks, Experiences and Products revenues for the quarter decreased 85 percent to $1.0 billion, and segment operating results decreased $3.7 billion to a loss of $2.0 billion,” according to the Tuesday fiscal report. “Lower operating results for the quarter were due to decreases at both the domestic and international parks and experiences businesses and to a lesser extent, at our merchandise licensing and retail businesses.” 

During the earnings call, Disney CFO Christine McCarthy noted that the surge in Florida’s COVID-19 cases hurt airline travel, which impacted the company’s initial park projections. However, the park is seeing a “positive net contribution” with its reduced capacity.

Disney CEO Bob Chapek made it clear that a park would not reopen if it would lose money. Meaning that if a park would not have a decent flow of foot traffic, it would stay close until they felt confident it could turn a profit.

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A new reopening date or other news for Disneyland was not announced. The previous date of July 17 was scrapped with cases increasing in California and petitions by cast members. California paused its reopening phases leaving Disneyland in limbo.

Also announced in the call was Mulan moving to Disney+ although the company still plans to release the movie in theaters.

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