Disney Saves $500 Million A Month With Temporary Furlough

Posted on by Mathew Corn Disney Parks

Company-wide furloughs went into place for all U.S. based, non-essential Cast Members and employees (including Disney Parks & Resorts, Walt Disney Imagineering, Disney Cruise Line, Disney Store, and Walt Disney Studios)  April 19. Disney has secured full health benefits for their employees during the temporary furlough as well as auto-enrollment for all Florida Cast Members into the unemployment benefits system. With over 100,000 employees no longer getting paid, Disney will be saving up to $500 million a month across its many theme parks and hotels worldwide, which have now been closed for up to five weeks.

Despite leaving nearly half of its workforce without any income beyond unemployment benefits and a $600/week CARES Act bonus (available through July 31), the company remains protecting bonuses for its executives, as well as a $1.5 billion dividend payment going out to its investors in July.

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. The company’s senior executives took pay cuts starting on April 5th, with Executive Chairman Bob Iger forgoing 100% of his salary and current CEO Bob Chapek reducing his salary by 50%. Bob Chapek’s base salary is currently $2.5 million, according to a document filed with the Securities and Exchanges Commission. He is also eligible for a bonus of “not less than 300% of the annual base salary.” Cutting or suspending dividend payments would likely cause further turmoil for Disney within the market, with an increased likelihood of plummeting stock prices in the future. The company currently has accrued $13 billion in debt and credit agreements in order to mitigate the financial effects of closing down its parks and film studios.

Walt Disney Company Stock Rebounds After Reopening Guidelines Released

Posted on by Mathew Corn Disney Parks

With Disney’s parks and resorts shuttered across the globe due to the ongoing COVID-19 pandemic, and movie theaters across the nation sharing a similar fate, the conglomerate’s revenue has been severely compromised, giving temporary leeway for companies like Netflix, which are focused on “stay-at-home” products like video streaming, to gain a financial advantage. In fact, just this Wednesday, Netflix had officially passed Disney in terms of worth, with stocks for the company hitting an all-time high at market close. However, the Mouse is back, with Disney shares rising 4.5% today, closing at $106.63 a share. It seems the prospect of a phased reopening has reinstated shareholders’ faith in the company after the initial damage of the still-ongoing health crisis, boosting market capitalization for Disney to over $192 billion.

The White House issued new federal guidelines for the “Opening Up America Again” effort, listing the three phases each state will eventually go though before clearing Phase 3, which would be considered life after a COVID-19 vaccine or at the very least a full drop-off in cases. In our analysis of the new guidelines, it isn’t until the state enters Phase Two that we’d imagine the parks could truly reopen, with Non-Essential Travel resuming at that time, and only moderate social distancing required.

It was shortly after the announcement that Netflix ended its brief two-day stint on top of the entertainment market.

While these new guidelines will certainly pave the way to a potential reopening, that doesn’t necessarily imply that it will happen anytime soon. According to BMO Capital analyst Dan Salmon, he doesn’t expect Disney’s theme parks to begin reopening before July 1. (The earliest any state can begin to progress through the Phases outlined above is May 1.) Regardless of their market worth, Disney is still facing an uphill battle, as 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.

Walt Disney Company Gets $5 Billion Credit From Citibank

Posted on by Mathew Corn Uncategorized

With the Coronavirus (COVID-19) pandemic not going away any time soon and The Walt Disney Company still facing an uncertain financial future, the company has secured a new credit line of up to $5 billion, according to Seeking Alpha.

Disney revealed in a new SEC filing on Monday that it entered into a 364-day credit agreement with Citibank for up to $5B just last Friday, with the option to extend the maturity beyond April 9, 2021 if lenders consent.

Due to the size and short term nature of the credit line, it’s apparent that the credit agreement is to offset COVID-19’s impact on company-wide operations. The 2021 maturity date also confirms that both parties believe the company will be back on its feet within a year or so, aligning with what other analysts have inferred regarding park attendance levels and revenue.

The Walt Disney Company also recently announced a $6 billion U.S. debt offering as well as a $1.3 billion Canadian debt offering in March. At the end of the previous fiscal year, Disney had long-term debt worth over $38 billion. Disney is far from the only media company seeking to raise money, with Comcast, owner of Disney’s chief theme park rival, Universal Parks & Resorts, also raising money to offset COVID-19’s impact on their operations.

ABC To Air “The Disney Family Singalong” On Thursday, April 16th

Posted on by Mathew Corn Uncategorized

Gather up the family and get those singing voices ready! Thursday night, April 16, will be a fun experience for all Disney fans. ABC is airing “The Disney Family Singalong” which will feature favorite Disney songs along with characters and celebrities! Check out the details below from The Walt Disney Company:

ABC announced it will air The Disney Family Singalong, a magical one-hour television special celebrating family, music and the love of all things Disney. Ryan Seacrest will host the nationwide singalong event airing Thursday, April 16 (8–9 p.m. EDT), which will feature celebrities with their families as they take on their favorite Disney tunes from their homes. Special guests confirmed for remote performances and appearances include Christina Aguilera, Erin Andrews, Bobby Bones, Michael Bublé, Kristin Chenoweth, Auliʻi Cravalho, Luke Evans, Jordan Fisher, Josh Gad, Derek Hough, Julianne Hough, Carrie Ann Inaba, Little Big Town, Kenny Ortega, Donny Osmond, Thomas Rhett, Amber Riley, John Stamos and many more from across The Walt Disney Company portfolio, including The Walt Disney Studios, Walt Disney Television, Disney Music Group, Disney Theatrical Productions and beyond. Additional guests and performances will be announced soon.

With an animated character to guide the on-screen lyrics, audiences, families, roommates and loved ones can follow along in perfect harmony with their favorite celebrities as they sing beloved melodies from Disney classics, including Beauty and the Beast, The Little Mermaid and Toy Story, as well as more recent fan favorites like Moana, Frozen and High School Musical.

“If there’s something that we’ve all learned in the past few weeks, it’s to cherish every moment and the importance of connection, whether through laughter, stories or music. We hope that we can help create some new unforgettable moments in everyone’s home in a way that only the magic of Disney can,” said Karey Burke, president, ABC Entertainment.

The special will also air PSAs with talent from across Walt Disney Television to raise awareness about Feeding America’s vast network and resources for people in the country who are finding themselves in unfamiliar circumstances and facing hunger for the first time due to COVID-19. Families and vulnerable members of the community who need help can visit FeedingAmerica.org/FeedTheLove to learn more about Feeding America’s COVID-19 response and how to locate local food banks for help.

The Disney Family Singalong is one of many ways The Walt Disney Company is bringing the magic of Disney into homes right now. At DisneyMagicMoments.com, fans and families can find more entertaining stories, videos and activities from Disney, Pixar, Star Wars, Marvel and National Geographic that inspire imagination and discovery.

Bob Iger Takes CEO Responsibilities Back From Chapek

Posted on by Mathew Corn Disney Parks

The Walt Disney Company has seen a number of changes in quick succession in the past few weeks, from appointing Bob Chapek as new CEO to facing the crippling economic effects of the ongoing Coronavirus (COVID-19) pandemic. Throughout the current crisis, however, only one voice from the upper echelons of the company has spoken out, and that’s former CEO Bob Iger. A recent post by the New York Times delves deeper into the current circumstances surrounding leadership at Disney, from Bob Chapek’s deafening silence to the potential of a downsizing and restructuring within the company.

In the New York Times piece by Ben Smith, he covers how Bob Iger, in an attempt to transition into retirement, has been faced with reasserting control and reimagining Disney in a time of crisis. Essentially, he’s quietly taken back his responsibilities while Chapek is still CEO:

“And now, Mr. Iger has effectively returned to running the company. After a few weeks of letting Mr. Chapek take charge, Mr. Iger smoothly reasserted control, BlueJeans video call by BlueJeans video call. (Disney does not use Zoom for its meetings for security reasons.)

The new, nominal chief executive is referred to, almost kindergarten style, as “Bob C,” while Mr. Iger is still just “Bob.” And his title is “executive chairman” — emphasis on the first word.

Mr. Iger is now intensely focused on remaking a company that will emerge, he believes, deeply changed by the crisis. The sketch he has drawn for associates offers a glimpse at the post-pandemic future: It’s a Disney with fewer employees, leading the new and uncertain business of how to gather people safely for entertainment.”

With the pandemic wreaking havoc on the economy and still no opening date in sight for many Disney Parks, Iger has commented on new health and safety screening measures for guests at the parks. The Times piece goes on to infer that the company will be downsizing following the pandemic to streamline its operations and be better prepared to weather a similar situation down the road:

“Mr. Iger, meanwhile, is trying to figure out what the company will look like after the crisis. One central challenge is to establish best practices for the company and the industry on how to bring people back to the parks and rides while avoiding the virus’s spread — using measures like taking visitors’ temperatures.

Mr. Iger also sees this as a moment, he has told associates, to look across the business and permanently change how it operates. He’s told them that he anticipates ending expensive old-school television practices like advertising upfronts and producing pilots for programs that may never air. Disney is also likely to reopen with less office space. He’s also told two people that he anticipated the company having fewer employees. (Mr. Iger said in an email on Sunday evening that he had “no recollection of ever having said” that he expected a smaller work force. “Regardless, any decision about staff reductions will be made by my successor and not me,” he added.)”

The full piece goes into far greater detail and can be read in full here.