With reports arising about deep financial losses and even a potential extension of current park closures, things are looking more and more volatile for The Walt Disney Company, and a new statement released by the company to the Securities and Exchange Commission today confirms that the company has in fact hit hard times due to the sudden hit of the Coronavirus (COVID-19) pandemic.
According to CNBC, Disney is warning investors that the Coronavirus pandemic has affected so many of its business segments that it’s becoming more challenging for the company to estimate its future performance:
“We have closed our theme parks; suspended our cruises and theatrical shows; delayed theatrical distribution of films both domestically and internationally; and experienced supply chain disruption and ad sales impacts,” the company said in a filing with the Securities and Exchange Commission Thursday.
“In addition there has been a disruption in creation and availability of content we rely on for our various distribution paths, including most significantly the cancellation of certain sports events and the shutting down of production of most film and television content,” the company said.
Yesterday, it was reported that with Disneyland closed, the financial impact could mean a $400 million loss for Southern California area hotels, restaurants, and the overall tourist economy in the area––and that’s just based off of the estimated 18-day Disneyland closure period alone. In terms of projected recovery time for the company, The Walt Disney Company said this in the SEC note:
“We expect the ultimate significance of the impact of these disruptions, including the extent of their adverse impact on our financial and operational results, will be dictated by the length of time that such disruptions continue which will, in turn, depend on the currently unknowable duration of the COVID-19 pandemic and the impact of governmental regulations that might be imposed in response to the pandemic. Our businesses could also be impacted should the disruptions from COVID-19 lead to changes in consumer behavior. The COVID-19 impact on the capital markets could impact our cost of borrowing. There are certain limitations on our ability to mitigate the adverse financial impact of these items, including the fixed costs of our theme park business. COVID-19 also makes it more challenging for management to estimate future performance of our businesses, particularly over the near to medium term.”
As a reminder, the latest CDC guidelines recommend against public gatherings of over 50 people for the next 8 weeks, which could very well extend the closure past April, despite it only applying to certain businesses.
We’ll be keeping our eyes on developments here in Florida and in California, as well as in Paris, and Tokyo, Shanghai, and Hong Kong regarding the COVID-19 pandemic’s effect on Disney Parks operations and beyond. For all of the latest Coronavirus-related Disney Parks news throughout the ongoing pandemic, continue to check here.