Disney Hit With $6.9 Billion Losses in 2020 Due to Park Closures

Disney has been hit with $6.9 billion in losses due to the 2020 park closures. These details were reported during the company’s fiscal full year and fourth quarter 2020 financial call today. Many observers thought that the coronavirus pandemic would hit Disney’s operations fairly hard because of their theme park presence, cruise ship business, and reliance on movie theaters. From these results, it looks like the parks were an area that took a blow because of the safety measures in place across the globe. Disney CEO Bob Chapek also addressed the ongoing situation around California’s decision not to open Disneyland Resort during the pandemic. The head man cited Walt Disney World’s regulations and the general success of the other parks that were able to open overseas.

“Unfortunately, we are extremely disappointed that the State of California continues to keep Disneyland closed, despite our proven track record. Our health and safety protocols are all science-based and have the support of labor unions representing 99% of our hourly Cast Members," Chapek said. "Frankly, as we and other civic leaders have stated before, we believe the State leadership should look objectively at what we’ve achieved successfully at our parks around the world – all based on science – as opposed to setting an arbitrary standard that is precluding our Cast Members from getting back to work, while decimating small businesses in the local community.”

The company also mentioned during the call, “Parks, Experiences and Products revenues for the quarter decreased 61 percent to $2.6 billion, and segment operating results decreased $2.5 billion to a loss of $1.1 billion. Lower operating results for the quarter were due to decreases at both the domestic and international parks and experiences businesses. We estimate the total net adverse impact of COVID-19 on segment operating income in the quarter was approximately $2.4 billion."

When talking about the parks as a whole, however, the CEO delivered a very hopeful tone about the task ahead. To Disney’s credit, the reopening in Orlando, Shanghai, and other venues have gone off pretty well, all things considered.

“On the Parks side, we have proven over many months that we’re able to operate our parks responsibly, following strictly enforced guidelines provided by healthcare experts – successfully reopening our parks in Orlando, Shanghai, Tokyo, and Hong Kong,” he added. “We also reopened Disneyland Paris for several months, although the resort is now temporarily closed due to President Macron’s recent lockdown order, in response to a resurgence in COVID cases in Europe. People have shown a willingness to visit our parks, which I believe is a testament to the fact that they feel confident in the measures we've taken. And we are very encouraged by the positive news earlier this week on the progress of potential vaccines.”

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