Two Big Announcements We’re Expecting from Disney This Week
Get READY — some big Disney announcements could come out soon!
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We’ve already got Destination D23 to look forward to in September and the IAAPA Expo in November which could bring some theme park updates. But there’s an important date to know before then — August 9th. On August 9th, Disney will hold its earnings call for the third quarter of fiscal year 2023 (Q3 of FY 2023) and that could give us some MAJOR updates on a few different things. Here’s what we’re expecting.
1 — Writers’ and Actors’ Strike
First up, Disney could provide some important updates about the two entertainment strikes happening right now — the writers’ strike and the actors’ strike.
WGA (Writer’s Guild of America) and SAG-AFTRA (Screen Actor’s Guild — American Federation of Television and Radio Artists) — basically, the writers and actors that bring a bunch of your favorite shows and movies to life — are currently on strike.
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We’ve already seen some Disney-owned productions shut down as a result of the strikes, and reportedly Disney is considering delaying some of its movies because of the strikes.
But perhaps most importantly, Disney CEO Bob Iger’s statements regarding the strike are part of what transformed him (in the eyes of some) from a hero to a villain in 72 hours. During a CNBC interview, Iger commented on how devastating an actors’ strike would be (at the time he spoke, the actors’ strike had not been officially announced but was expected).
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Iger shared that the industry is still trying to recover after COVID-19 shut down many productions. He went on to say “This is the worst time in the world to add to that disruption.”
In addition, Iger said that the strike was “very disturbing” to him, and he claimed that there was a level of expectation held by the union that was not realistic. Though he said he respected the unions’ rights to get more compensation for their members, he said they also needed to be “realistic about the business environment.”
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Iger has since received a heavy amount of criticism about his comments from a variety of individuals. Fran Drescher, SAG-AFTRA President, said that Iger’s comments were “repugnant,” “out of touch,” and “tone-deaf.”
©Disney | She-Hulk on Disney+
So, we expect a few things could happen during this earnings call. First, Iger typically begins the call with an overview statement about the financial state of the Company and other updates. It’s possible that during this initial portion of the call, he will clarify his earlier comments, make further comments about the strike, or potentially even shift his tone and approach toward the situation.
It’s possible that Iger will also give an update as to how the strikes have impacted Disney’s current slate of movies and series, whether the release dates for some of these will be delayed, and just how Disney’s finances may be affected.
Asha from the new Disney Wish Movie
It’s possible that Iger will also be asked about the strikes by an investor and will have to address it in that way. It’s certainly a huge matter that major entertainment studios are having to handle in some way right now, so it might be top of mind for many shareholders going into this meeting.
Click here to see more about Iger’s comments, those who have criticized what he had to say, and more
2 — Financial Situation at the Disney Parks
Disney should also provide us with an update on the financial situation of the Company as a whole and its various sectors, one of which is Disney Parks, Experiences, and Products. This is something we generally see released within the earnings report, but elaborated on during the earnings call itself.
For quite some time, while Disney’s direct-to-consumer section has struggled financially, the Disney parks division has proven to be a highly profitable business. But, last quarter we saw some mixed results and a warning about the future.
EPCOT
Disney Parks, Experiences, and Products revenues for the quarter increased 17% from $6.6 billion in April 2022 to $7.8 billion in April 2023. That was good news. But, the financial results at Disney’s domestic parks were “slightly unfavorable” from the previous year.
Interestingly, there was a decrease at Disney World that was largely offset by growth at Disneyland. Disney indicated that some of the results at Disney World were unfavorable due to “higher costs reflected cost inflation, increased expenses associated with new guest offerings and higher depreciation.”
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During a past earnings call, then-CFO Christine McCarthy noted that “Per cap growth was more moderate this quarter.” In other words, things had slowed down a bit.
McCarthy also warned that in the “back half of this fiscal year, there will be an unfavorable comparison against the prior year’s incredibly successful 50th-anniversary celebration at Walt Disney World.” She shared, “We typically see some moderation in demand as we lap these types of events, and third quarter-to-date performance has been in line with those historical trends.”
Slinky Dog Dash
Basically, because the 50th Anniversary celebration has ended in Disney World, things might be slower than they were last year. It’s one of the several indications we’ve had that could point to an EMPTIER Disney World this summer.
McCarthy’s statements, along with the various discounts Disney has offered, the continued availability of Annual Passes, the large availability of Park Passes, and even some of the unusual crowd levels are some of the things hinting at an emptier Disney World this summer, and we could see the impacts of some of that on the Q3 earnings results.
Disney’s Hollywood Studios
Iger, however, has indicated that he’s not worried about Disney World seeming emptier this summer. Instead, he has said that a few things could be impacting Disney World’s attendance levels, including an increased number of attractions that have reopened post-pandemic, decreases in tourism to Florida as a whole (pointing to lower hotel tax revenue), and discounts offered by Disney’s competitors.
But, Iger previously said, “We’re not wringing our hands over it.” He indicated that Disney does NOT have “long-term concerns” about the parks business.
Disney’s Animal Kingdom
While Iger might not be worried, investors could be, especially if the earnings report reveals that the parks haven’t performed as well as hoped. So, we’ll be watching for any important updates there regarding the financial state of the parks, whether demand has significantly changed, and what Iger’s plans for the future of the parks might be.
MORE!
But wait…there’s MORE! Here are some other things we might hear about during this upcoming earnings call:
- An updated look at the number of subscribers Disney+ has now (and whether things are moving toward more subscriber growth)
- How Disney’s direct-to-consumer division is doing in terms of its finances and whether it is getting closer to being profitable
- More details on the Disney+ price increase (for the ad-free tier) which will hit users by the end of the year
- Whether any of Disney’s cost-cutting measures (and its removal of certain content from Hulu and Disney+) have impacted the Company’s finances during the last quarter
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- Any update on the acquisition of the remaining 33% of Hulu that Disney does not yet own (and where things stand in terms of the negotiations with Comcast)
- Any updates on Disney adding Hulu content to the Disney+ app
- News about the Reedy Creek Improvement District (now the Central Florida Tourism Oversight District), the ongoing lawsuits involving the District, and any more about Disney’s feud with DeSantis
- More updates about Iger’s goals surrounding the cable networks (like ABC) that Disney owns and the potential of selling those off
- Any updates on the potential of finding a partner to assist with certain things with ESPN
We’ll be listening to the earnings call closely to give you ALL the updates you need, so mark down August 9th on your calendars and stay tuned for more!
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What news do you hope Disney reveals during the earnings call? Tell us in the comments.
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