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    Disney profit sinks amid shuttered parks, movies and sports

    By SHOOTUpdated:No Comments1303 Views
    In this March 16, 2020, file photo, the entrance to the parking lot at the Magic Kingdom at Walt Disney World is closed in Lake Buena Vista, Fla. The House of Mouse is struggling. Its second quarter profit dropped as the company took a $1.4 billion hit due to the coronavirus pandemic. For the January to March quarter, Disney's net income dropped 93 percent to 26 cents per share. Excluding one-time items, net income totaled 60 cents per share. Analysts expected 91 cents per share, according to FactSet. (AP Photo/John Raoux, File)

    By Mae Anderson, Business Writer

    NEW YORK (AP) --

    The House of Mouse is struggling amid the coronavirus pandemic. Disney reported a steep decline in profit as many segments of its media and entertainment offerings ground to a standstill. 

    Its second quarter profit dropped 91% to $475 million, down from $5.4 billion a year earlier. Overall, the company said costs related to COVID-19 cut Disney's pretax profit by $1.4 billion. 

    One bright spot was its Disney Plus streaming service, which debuted in November in the U.S. and rolled out to the UK and other parts of Europe in April. As of May 4, the company said Disney Plus had 54.5 million subscribers. Netflix, by contrast, has 183 million subscribers worldwide, a base it has spent years building.

    Disney Plus contributed to an almost $3 billion revenue increase for Disney's direct-to-consumer and international business. Hulu and ESPN Plus, two other streaming servces owned by Disney, had 32.1 million and 7.9 million paid subscribers, respectively.

    Overall Disney revenue rose 21 percent to $18.01 billion, just short of the $18.06 billion analysts expected. The company's shares fell roughly 2% in after-market trading.

    In a conference call with analysts, CEO Bob Chapek said the company plans to reopen its Disney Shanghai park on May 11. The phased opening will include limits on attendance, an advance reservation system, social distancing procedures such as wearing masks, and temperature screening and contract tracing efforts that are mandated by the government.

    The Walt Disney Co. shuttered its parks in mid-March as the new coronavirus spread. Its theme parks furloughed a reported 100,000 workers without pay in the U.S., including 43,000 workers at Walt Disney World in Orlando, Florida. Those workers can keep their benefits for up to a year. Disney Cruise Lines have also been suspended.

    The company's film studios, known for churning out blockbusters, have also suspended production. Disney pushed back most of its 2020 big budget movies, including the live-action "Mulan," "The New Mutants," the horror-thriller "Antlers," and Marvel's "Black Widow," to late this year or beyond.

    Disney-owned ESPN and its streaming arm ESPN Plus are also suffering from the dearth of live sports during the pandemic.

    Chapek said Disney has "substantially reduced" senior executive compensation and will keep the cuts in place until there is a "substantive recovery." He offered no further details. Disney is also suspending its semi-annual dividend, scheduled for July, which will save it about $1.6 billion.

    Tags:coronavirusDisneyDisney Plus



    DirecTV calls off acquisition of rival Dish, possibly ending a yearslong pursuit

    Friday, November 22, 2024
    Dish Network satellite dishes are shown at an apartment complex in Palo Alto, Calif., Feb. 23, 2011. (AP Photo/Paul Sakuma, File)

    DirecTV is calling off its planned acquisition of rival Dish after the offer was rejected by bond holders at that company.

    The deal was reliant on Dish bond holders agreeing to trade in the debt they held for debt in the new company, a swap that would have cost them about $1.6 billion, collectively.

    The retreat by DirecTV this week may end a years-long effort by the company to acquire both Dish and Sling after it announced the bid in September.

    DirecTV was looking to acquire Dish TV and Sling TV from its owner EchoStar in a debt exchange transaction that included a payment of $1, plus the assumption of approximately $9.8 billion in debt. The deal was contingent on several factors, including regulatory approvals and bondholders writing off debt related to Dish.

    "While we believed a combination of DirecTV and Dish would have benefited all stakeholders, we have terminated the transaction because the proposed exchange terms were necessary to protect DirecTV's balance sheet and our operational flexibility," DirecTV CEO Bill Morrow said in a statement.

    The prospect of a DirecTV-Dish combo has long been rumored, and reported talks resurfaced over the years. And the two almost merged more than two decades ago — but the Federal Communications Commission blocked the deal valued at the time at $18.5 billion deal, citing antitrust concerns.

    The pay-for-TV market has shifted significantly since. As more and more consumers tune into online streaming platforms, demand for more traditional satellite entertainment continues to shrink.

    DirecTV says that it will continue to invest in next-generation streaming platforms and offer new packaging options while integrating content from live TV alongside direct-to-consumer... Read More

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