Future World Construction

Disney Announces $900 Million Decrease in Capital Expenditures Mostly Due to Postponed, Cancelled Construction and Refurbishment Projects at Disney Parks Around the World

During today’s Walt Disney Company Q2 earnings call, it was revealed that there will be a $900M decrease in CAPEX spending anticipated for FY20, mostly due to postponed construction and refurbishment projects during the closure of the Disney Parks around the world.

This is obviously related to the ongoing construction delays and how much longer they are expected to go on for, but it also likely indicates the cancellations and budget cuts being made to some ongoing Disney Parks projects, possibly those not yet announced or where ground hasn’t been broken. At the very least, it indicates that many projects will be substantially delayed, possibly with work not resuming until the next fiscal year.

The announcement included refurbishment projects as well, which would include, for example, the “reimagining” of Spaceship Earth and Snow White’s Scary Adventures, among other upkeep measures. When and if the announced Spaceship Earth overhaul will happen remains to be seen, but the announcement is not positive news for the project as far as it moving forward on schedule, if it even does move forward.

A lot of this is speculative, but $900M is certainly a large sum that is not being spent on construction and refurbishment projects at this time.

Finally, in the Q&A segment of the call, Chapek indicated that they would be running a “fine-tooth comb” through the budgets of these projects moving forward. “Big plans” are still in the works for the parks, but they will be reduced. This all seems to admit to the assumptions we have made above.

We will surely keep you in the loop as announcements regarding individual projects are made down the road.

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alex bailey
alex bailey
30 days ago

Will this just leave the Mary Poppins “attraction” to just a fancy room with no ride in it?

Robert
Robert
30 days ago

Assuming the Snow White’s Scary Adventures project, already underway at Disneyland, is going to get finished.

Jeremy
Jeremy
29 days ago

I think Spaceship Earth is best left untouched for now. People will be craving nostalgia to comfort them when they are willing and able to return to Epcot. I’m sure the Mary Poppins project will be shelved for now as well. Keep in mind a few rides had mechanical issues in MK prior to the parks closing, so I believe those should take priority over other projects minus already underway Tron construction in MK, and Guardians of Galaxy in Epcot.

Frank W
Frank W
29 days ago
Reply to  Jeremy

I hope they leave SSE alone for the time being. You are right, there will be some level of comfort with a classic attraction. beside, I would be very concerned that if they went ahead with the refurbishment, they would cut corners and we would end up with something that would not be worthy of the effort or the guests.

Emily
Emily
29 days ago
Reply to  Jeremy

I agree, they should just leave it as is for now.

Doug
Doug
29 days ago

I guess the multi million dollar question is what’s gonna happen with the Star Wars hotel? I have to believe there’s gonna be some serious soul searching regarding it.

Frank W
Frank W
29 days ago

The term “fine toothed comb” concerns me. I hope they don’t cheapen down projects. I’d rather they do what ever they do well rather than taking the cheap way out.

Jen
Jen
29 days ago

I am glad they a considering scaling back, instead of just raising Ticket prices Again!

Mark Bell
Mark Bell
29 days ago
Reply to  Jen

I’m pretty sure they are NOT mutually exclusive options. Scaling back capital projects helps cash flow. Increasing ticket prices helps cash flow AND net income, something investors are always concerned with. So don’t think for a second that at some point in the next 12 months there won’t be an increase in hotel rates, tickets prices, food prices, etc. Disney’s goal is shareholder wealth maximization, not the maximization of park visitor happiness.

Erica Denny
Erica Denny
28 days ago

Too bad they already started painting the castle. Even though it’s not a “major” project, they probably could have saved a few bucks by scrapping that project. The new paint is such an eye sore.

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