The End of Disney?

Not today. Not Tomorrow. Not next year. But COVID is a wound from which Disney will never recover.

Disney is simply too big to recover. Before the Fox purchase, they MIGHT have had enough liquidity to ride it out in the short term without taking on debt but regardless, that wasn’t the case after Iger’s spending spree. The cupboard was bare and Disney has taken on billions in debt. Regardless, even if they had been secure in the short term, the long term outlook for tourist industries is grim. The people who were saying, “We’ll go to Disney World next year,” are now saying, “Maybe we’ll go next year. Maybe.”

Movies are going to go one of two ways, either it is going to be a low budget source of recreation, where tickets cost less than two dollars, popcorn prices will be about the same and nobody cares if the people around you are talking and texting because that’s what you expect from it.

Or it’s going to be a high price experience with tickets prices being north of $70 for the good seats (the recliners) and there is going to be a bar charging bar prices for cocktails. At least the food will be edible.

And the current multiplex, mid-price movie experience will die out. The multiplex was a product of the 1970s because the economics of the 1970s favored that model. Back then there were a number of studios producing a lot more films than get released today. The mega-event on multiple screens was very unusual. Sometimes happening less than once a year. Today, with only four big studios left, having multiple screens showing the same movie is a dire economic necessity for the cinemas. The theater owners are in a death spiral. I’ve gone into that elsewhere. COVID has accelerated a process that was already underway.

The two biggest problems that Disney and the rest of the studios face at the moment are (1) financing. Getting someone else to pay for the production. Nine digit budgets look like a lousy bet right now. And (2) the audiences aren’t going to the theaters at the moment. Tenet made a lousy, $30 million and that is a Christopher Nolan film. Consequently, all of the release dates are getting pushed back to next year. This means that the loans they took out to finance them are going to be piling up interest and these are high-interest projects, to begin with due to the inherent risk.

Another problem is just how Woke the entire industry has gone at this point. Checklists come before everything to include, interest by the audience. The MCU characters that the audiences loved are now gone. What is coming next is the M-She-U. The only upcoming film with any interest behind it is Black Widow, a character that dies after the events in that film.

Then there are James Cameron’s Avatar sequels, with a budget of $ 1 billion, this has a to be a source of terror for Mickey the Great and Terrible because it seems very likely that the age of the billion-dollar money maker is over. Yet another crater on the bottom line.

This week, the film industry started begging for a bailout…after making all kinds of donations to BLM.

Disney was already in the hole over Disney Plus.

Finally, the Disney cruise lines. I honestly have no idea if that industry will recover or not. Cruise line passengers are the “newlywed and the nearly dead.” Families with small kids are going to be panicky about being bottled up on floating Petri dishes and the geezer crowd is utterly terrified of COVID. The cruise business may be as dead as the horse and buggy.

I honestly see no hope for Disney. And I am sad to say that is for the best.