Walt Disney Company Credit Rating Downgraded Due to Concerns Over Delayed Reopening

Jessica Figueroa

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Walt Disney Company Credit Rating Downgraded Due to Concerns Over Delayed Reopening

The Walt Disney Company has seen a whirlwind month within the market, getting out-performed by Netflix only to gain advantage shortly after with the White House’s announcement for a phased reopening of businesses to potentially begin in May. However, investors haven’t fully regained hope in the company, and more news coming out regarding the future of the entertainment giant paints an even bleaker image.

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S&P Global Ratings has downgraded The Walt Disney Company’s credit rating from an A to an A-minus due to concerns over the ongoing effects of COVID-19. Given the company’s reliance on its theme parks, government-imposed social distancing and consumer concerns about attending public events will further delay the recovery of a rather large sector of the company. Lower theme park attendance in the coming months and years means the company could potentially recover at a slower rate than the overall global economy.

In a report, S&P Global Ratings believes the impact of COVID-19 will persist even after the easing of social distancing guidelines and stay-at-home mandates:

“Disney’s theme parks won’t likely return to normal capacity utilization at the same rate as the overall economy even after stay-at-home restrictions are eased and the theme parks are allowed to reopen.”

Disney’s debt load is expected to climb over the next two years, leveling out at some point in 2022. To date, the company has accrued $13 billion in debt and credit agreements in order to mitigate the financial effects of closing down its parks and film studios.

Source: The Hollywood Reporter

9 thoughts on “Walt Disney Company Credit Rating Downgraded Due to Concerns Over Delayed Reopening”

  1. no surprise there, expect many valuable companies to be downgraded and eventually lost to bankruptcy along with the jobs.

    • I think it’s got more to do with terrible business decisions on Disney’s behalf. They are in a ridiculous amount of debt from the Fox deal.

  2. Can’t wait until someone sues WDWNT after someone makes a financial decision from their poorly interpreted financial editorials on Disney. Does anyone at WDWNT even have a 401k?

    • Do you have a company you started from nothing? Do you get to do what you love?

      The story is also from The Hollywood Reporter, if you take the time to read instead of trying to be a smart-ass.

      • None of this changes the fact that your website has been pushing financial editorials about TWDC that have seemingly been spun and reworded to skew the reality of certain situations. Only a matter of time before some amateur investor shorts Disney stock or goes too deep in leveraged puts and gets blown up … then points an overzealous lawyer to WDWNT.

        Maybe think twice before peddling an article from THR which has been mounting yearly losses of $10M+ and just laid off a sizable amount of staff.

        But that’s all just my opinion – didn’t know someone would get so emotionally hurt over it!

    • There’s no WDWNT opinion here. It’s a story already printed by another news agency. If you were intelligent enough to have read and understood the article, you probably would not have made such an asinine statement. If you rely on WDWNT to make a financial decision, well I’ll just leave it at that.

  3. WDWNT, when you find an article you want to share, please use more trustworthy sources. For example, Barron’s and MarketWatch published similar articles to this one you could have cited. They’re much more well known in finance and business than THR. I also think you should open the article with the source to make things more transparent to the readers.

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