According to an article in the FT, Disney has laid off 100,000 cast members this week. 70,000 in Orlando alone. They will keep their health benefits, but Florida pays only $275 a week in unemployment, for just 12 weeks. The $600 extra from the CARES act would help. But keep in mind that Florida has processed a whopping 6% of their unemployment claims. These cast members are going to have to get in line behind everyone else.
The part of the article that caught my eye was that Disney will save 500 million dollars per month on labor. They have raised 20 Billion in credit to get through the downtown. They made 7 Billion in profits in the parks last year, which is roughly half of their operating profits. So, completely shutting down is likely cheaper and smarter for Disney right now.
An analyst in that sector said this...."Disney over the past month has raised debt and signed new credit facilities, leaving the company with about $20bn in fresh cash to draw upon for a downturn. “They could afford [not furloughing staff]," said Rich Greenfield, analyst at Lightshed Partners. However, he cautions that Disney is probably braced for a “very prolonged shutdown”.
They may try a slow, 1/4-1/2 speed opening later this summer....maybe? But again, if I read the article correctly, they're saving 500 million a month in labor costs. 6 Billion a year. That's a big incentive to just stay closed until they can be sure that their guests are safe.
Unfortunately, they may be forced to shut down again if the CDC Director is right. In an interview with the Washington Post today, he warns that the second wave of COVID-19 next fall/winter will be far more deadly as it will coincide with the flu season. That's terrible news from a public health/human life perspective of course, but it has to be next to impossible for Disney to map out a strategy with such uncertainty in the weeks and months ahead. They've raised that boatload of cash, in case they need to ride this out for that prolonged period I'm afraid.
The part of the article that caught my eye was that Disney will save 500 million dollars per month on labor. They have raised 20 Billion in credit to get through the downtown. They made 7 Billion in profits in the parks last year, which is roughly half of their operating profits. So, completely shutting down is likely cheaper and smarter for Disney right now.
An analyst in that sector said this...."Disney over the past month has raised debt and signed new credit facilities, leaving the company with about $20bn in fresh cash to draw upon for a downturn. “They could afford [not furloughing staff]," said Rich Greenfield, analyst at Lightshed Partners. However, he cautions that Disney is probably braced for a “very prolonged shutdown”.
They may try a slow, 1/4-1/2 speed opening later this summer....maybe? But again, if I read the article correctly, they're saving 500 million a month in labor costs. 6 Billion a year. That's a big incentive to just stay closed until they can be sure that their guests are safe.
Unfortunately, they may be forced to shut down again if the CDC Director is right. In an interview with the Washington Post today, he warns that the second wave of COVID-19 next fall/winter will be far more deadly as it will coincide with the flu season. That's terrible news from a public health/human life perspective of course, but it has to be next to impossible for Disney to map out a strategy with such uncertainty in the weeks and months ahead. They've raised that boatload of cash, in case they need to ride this out for that prolonged period I'm afraid.