- Disney’s decision to furlough it’s park employees underscores how much the closures will hurt the business.
- With pain coming from all angles, Disney could become a takeover target.
- Apple has the cash to make a big acquisition and Disney would fit into the firm’s future streaming plans.
On Friday, Walt Disney (NYSE:DIS) announced it would furlough thousands of employees amid coronavirus uncertainty. The move underscores Disney’s precarious position and adds to speculation that Apple (NASDAQ:AAPL) could be considering a takeover bid.
The self-proclaimed “happiest place on earth” had to shutter its parks to comply with lockdown measures, resulting in millions in lost ticket sales. The exact number of park staff affected is still unclear, but it could potentially apply to 177,000 U.S. workers.
While Disney has agreed to continue paying for healthcare benefits and insists the furlough will be a short-term measure, it raises questions as to how much more pain the mouse can take.
Disney Park Closures Hurt Revenue
Disney’s Parks segment makes up a whopping 37% of the firm’s overall revenue. That’s equivalent to $25 billion each year. If the parks remain shuttered for just one quarter, Disney will likely lose more than $6 billion in unrecoverable revenue.
And that’s just parks. While the introduction of the company’s Disney+ streaming platform was undeniably well-timed, Disney’s media empire is also at risk of crumbling. Production for 2021 projects have halted and the windfall that new releases used to generate is little more than a light breeze.
Disney’s “Onward,” which came out on March 6, grossed just over $100 million—that’s a fifth of the $500 million studio execs had expected. The film cost more than that to make.
Lack of Content Kills Broadcast
Things don’t look much brighter for…