Disney to double investment in theme parks and cruises over next decade
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Disney plans to nearly double its investments in its popular theme parks and cruise line, the company said in a securities filing Tuesday.
Why it matters: Profits from theme parks have helped offset Disney's streaming losses for years.
- Disney's parks segment suffered dramatically during the height of the COVID-19 pandemic, but made a strong comeback after lockdowns were lifted.
Details: The company will spend roughly $60 billion in the next 10 years on its parks and cruise line segments, nearly doubling the investment it's made in those areas in the past 10 years.
- Those investments will be used to advance its storytelling capabilities, expand its parks, resorts and cruise line, and reach new fans, the company noted in a presentation to investors.
- Disney pointed out that strong historical investments in its intellectual property have helped to consistently grow revenues at its parks, experiences and resorts segment.
- It highlighted the strength of its investments over the past 20 years in franchises such as "Star Wars," "Toy Story" and "Cars."
Between the lines: Disney's parks, experiences and products revenues last quarter increased 13%, but that was mostly thanks to increased results at its international parks and resorts.
- A decrease in attendance at Walt Disney World Resort in Florida last quarter, coupled with higher costs, resulted in lower operating income from the company's domestic parks.
- The company remains embroiled in a protracted political spat with Florida Gov. Ron DeSantis.
- It canceled plans for a new, nearly $1 billion employee campus in Orlando in May, citing "changing business conditions."
The big picture: Disney and other Hollywood giants are under enormous pressure to streamline their focus and make their streaming businesses profitable.
- Disney CEO Bob Iger said in July the company is considering selling off its linear TV assets as it looks to prioritize parks, streaming and movies.
- Broadcast and cable networks have struggled with major viewership declines as cord-cutting intensifies.
What to watch: Investors reacted mildly to the news, sending Disney's stock down 3% Tuesday after the announcement.
- Shares in Disney are down nearly 8% year-to-date. The company's stock has declined nearly 60% from its all-time high in March 2021, when Disney+ subscriber growth drove short-term investor optimism.
Go deeper: Disney dilemma underscores media's existential crisis
