Does the theme park industry deserve a bailout?

Robert, while I'm not in 100% agreement with you (our differences are minor and not important in the grand scheme of things), much of what you wrote is spot-on.

The theme park industry is shut down, and Disney's parks (as well as Universal, Six Flags, and regional parks) are HUGE employers and a major part of our economy. Airlines have scaled back, but are still running. Restaurants, while not being able to have dine-in, are still open. But there are a LOT of theme park workers who are just out of luck if their employers stop paying them, and the parks themselves are in financial trouble if they keep paying furloughed cast members/team members or whatever that particular company calls them.

The casino for whom I work has furloughed people without pay. I may or may not get to still get paid to babysit the casino (over the past week, my job has been to just be in the casino to call the cops if someone tries to break in). I literally called my boss 30 minutes ago to ask whether I should be at work tomorrow night, and even he didn't know the answer. And I understand his lack of an answer, because we are in uncertain times. I'm going to show up, and if I am sent home, I am sent home.

I could talk about the movie theater industry or other places involved, but I've already been too long-winded. All of the entertainment industry is hurting right now, and they deserve some of this federal money. Entertainment is important, and something people will NEED when we can all go out again.

And I do thank you, Robert, for your insight during this time. Theme park news may not be the most important thing right now, but for us fans, what you are doing is a great mix of news and theme park content, and it is very much appreciated.

I don't know how someone can vote no for this under the circumstances. At this point its obvious if the federal government doesn't do something to help companies keep people on the payroll, they won't be able to meet payroll, and the economy would collapse. I don't know of any company that's ever been able to stay in business without any customers?

I don’t generally like the idea of bailouts, but there’s a big difference between saving a company that was poorly run, and saving a company affected by a global pandemic. I don’t want companies to become better off than were before thanks to a handout, but a little bit of money to offset the revenue lost is fine. As long as they stay in business for the foreseeable future, and do not lay off or reduce hours.

I'm generally against bailouts, but this is a tough question under unique circumstances. Therefore, I'd probably say yes to a theme park bailout if if carried some pretty strict conditions. Namely, I'd say the following:

-The amount offered is approximately the same as the amount of revenue lost as a result of closures due to the current pandemic
-100% of the cash goes to front line employees or is put directly into the parks in the form of upkeep and capital investments
-Salaried employees making above the median salary within the company are barred from salary increases or taking bonuses until the company is once again turning a profit
-The company must sell all stock bought back in the past five years and may not participate in stock buybacks until the bailout is repaid in full

I'd like to see similar conditions attached to any other corporate bailout as well.

I am against a bailout that will cost the taxpayers money. I do favor loans to Disney or Comcast or another company to buy the regional parks at a bargin basement price provided they pay the employees. I own stock in Seaworld, Six Flags and Cedar Fair and I should not be bailed out, the workers should be. Themeparks are a wonderful form of entertainment but the vast majority of jobs are seasonal and part time. The Federal Government can't afford to save every business and thus if the 2 big boys step up they deserve some help but no taxpayer money. In fact neither Disney nor Comcast should get taxpayer money for their businesses. They can survive without it.

Small businesses ... left on the cutting room floor to wither and die

I think government bailouts are a slippery slope, and should be carefully considered. However, the situation that society finds itself in does not allow for careful consideration nor the time and common sense needed to make rational decisions to get the best "bang for our buck".

The biggest issue is determining which businesses/industries are "worthy" of a bailout. The other complicating factor is timing. The travel and tourism industry is obviously hard hit, and directly/immediately impacted by government decisions to issue and enforce lockdowns in cities and regions that are artificially suppressing the industry's revenue. While the affects of the outbreak will likely linger for years, the travel and tourism industry will eventually return, so any bailout would need to consider the need to get these businesses to make it to the end of the tunnel. There's an obvious need to support the industry so they can survive to be critical tools for our ultimate recovery, but those bailouts cannot prop up businesses that made poor decisions or over-leveraged their positions prior to the crisis (i.e. stock buybacks, lack of financial reserves, over-expanding, and accumulating debt).

Conversely, the construction industry is only slightly affected by the pandemic currently, with many projects (including the massive SoFi Stadium project in Inglewood, CA) continuing, though with some limitations to account for local restrictions and guidelines. However, 1-2 years from now, the construction industry could see severe damage due to other companies pulling back in their investment to account for losses from the outbreak. Does the construction industry get a bailout to compensate for these losses, even though they might not be felt for years?

Ultimately, the whole concept of bailouts ends up being elected officials' power being subject to the highest bidder as we're already seeing lobbyists spending millions of dollars to influence representatives to include their industries in the stimulus package. This giant tug of war doesn't serve anyone except those officials that are treated like kings and the lobbying industry that continues to hum along at absurd levels.

What I think should be done is to allow for ANY business to apply for a low interest loan to be used ONLY for employee wages and benefits (full time, part time, AND contract employees) until the "all-clear is given.

The difference between the US and Europe has never seemed so stark.

Here in the UK we have recently elected one of the most right-wing governments we have seen for a long time, led by a man who is an out-and-out free-marketeer and a staunch defender of and advocate for capitalism. And yet the UK government has simply stepped up to the mark and promised to support its population. Billions of pounds worth of loans have been made available, all manner of business rates relief announced, a £10,000 grant to be paid automatically to smaller businesses (like my own), but most of all a promise to pay 80% of employees' wages if their jobs are furloughed as a result of the mass close-down of the economy. Similar measures are due to be announced today for the self-employed. This is an issue that far transcends traditional party policy or orthodoxy. Boris Johnson and his government simply know what is required to ensure there is a chance of an economy still being there after all of this and they are doing it - 'whatever it takes'....

The poll has one yes option and two no options. Should have included two yes options with the 2nd option being Yes but not for mega corporates like Disney and Comcast. Nonetheless, the two no options added together is larger than the one yes. Pretty telling considering this is a theme park website. Living in Orlando, I have grown more than tried of the ravenous greed of the corporate tourist & hospitality industry (esp. Disney) with the accompanying extreme overgrowth. Development out of control, affordable housing gone, traffic gridlock, etc. With tourism being the engine of Orlando, it's all come to a shocking & grinding halt due to the pandemic. While the coronavirus will eventually come to pass, the tourism & real estate industry here will suffer a long-term or near permanent contraction; the corporate greed monster will become the mouse that it should be.

Your post is ridiculous.
-Disney and Universal are losing billions of dollars and still paying their employees.
-Theme parks are not doing anything immoral or illegal by expanding. Yes affordable housing and traffic are issues but there's also a major problem in cities like Orlando and Miami where people don't want to change their lifestyle or the tax structure in order to support more sustainable development and better public transit (just like every other major city in the country facing similar problems). Disney subsidizes a huge portion of their Lynx bus routes. People still have the ability to vote, but much like the rest of the USA they'd just rather sit in traffic in their own car then ride the bus or the train.
-NIMBY's like you only make the problems worse by trying to block projects instead of having a positive mentality towards economic development and try to do the right things to make life better for workers. More housing and schools are being built all over Central Florida, compare that to San Francisco (a city filled with NIMBYs) where they can't even take down a laundromat and build apartments because of NIMBY's and the average house is over $1 million and rent is $3,700 for a two bedroom apartment.
-It's not Disney's fault tons of people from the northeast view a $300,000 house as cheap keep moving here and buying real estate.

Thanks for the insightful and interesting article, Robert. I am generally against bailouts, but as many have said, this is a very unusual circumstance. I quibble slightly with the statement "we are the government" as justification for government action only because that can quickly descend into the rule of the majority if not balanced out, but that is mostly semantics.

Good read!

Definitely if a theme park remains committed to paying it’s employees like Disney and Universal has, the company should receive some sort of tax break or relief option.

Maybe I'm out of line here, but it's awfully suspicious how Bob Iger left his post 'effective immediately' and apparently left Bob Chapek to handle the looming crisis.

Iger reportedly has political aspirations, maybe he could generate a huge amount of good will if he donated some of his millions to help the front line cast members.

I've read news recently about how celebrities are choosing not to leave their vast fortunes to their children, but rather to charities, it would be very charitable for Iger to help the cast members. This would certainly please Abigail Disney, who has criticized Iger recently for his huge salary.

When I see how this is being handled elsewhere, I think even more the UK Government's scheme is genious. David Brown has already summarised it, and for most sectors I think its going to basically allow stop-start operation... and ordinarily I agree very little with him and his government.

When it comes to the tourism industry, I'm not convinced this is going to be so push-button. Yes, Domestic tourists will start to come as soon as they can (I want to get away to a small hotel in a small town and support some small restaurants as soon as I reasonably can), but I'm not convinced that governments are going to remove the restriction on international travel so fast - If, as we're hoping the UK can come out of "lockdown" early June, and cases are still increasing in the US, then obviously those flights will not be running.

Those concerns obviously exist in Orlando too. If I were in the marketing team there I'd be preparing a major domestic campaign now, as those would be the potential consumers I could be confident of reaching.

Maybe a bit offbeat but now a crazy story growing on "Apple will soon buy Disney if stocks fall further" which just shows how wild some folks jump on things right now....

@David Brown - Hear! Hear! I fully endorse your post. Bozza & Rishi are providing leadership of the highest calibre. Leaders are ultimately defined by how they respond to crises. Here in the UK, we could not have any better leadership at such crisis times irrespective of any political affinities.

I'm having trouble following some of the logic being used in some of these posts and even in parts of Robert's opening argument.

First of all, when governmental entities put their fingers on the scale and deem some businesses essential and they should stay open and they order other businesses to close their doors because they are determined to be not essential, there is nothing free market about the resulting economy. If the government is going to assume control of the economy, then the government bears the responsibility, financial and otherwise, of the results of that action.

So, in all fairness, who are we to say that there are good actors and bad actors in the situation? If the airline industry spent a good portion of their profits over the last decade on stock buybacks that enriched their shareholders, are we to say that they are responsible for being under-capitalized to deal with a crisis of this magnitude when what they were doing at the time appeared to be good business? Are we going to punish them for not being prepared for the Covid-19 pandemic?

If punishment is being doled out (or rather evaluation of worthiness for assistance) for not being prepared for the down times, what about people on an individual level? Financial experts recommend that we keep six months of expenses in a cash-basis emergency fund. I'm in my late 50's, and I only have a part of that in savings. Should people like me (probably 95% of the American population) be denied assistance because they didn't have their emergency funds fully capitalized?

So realistically, we need to leave the moral evaluation of a person's or business entity's worthiness out of the equation. Evaluate the damages caused by the Covid-19 pandemic as well as the damages caused by the government's actions to contain it, and provide assistance in some form to mitigate those damages.

I wouldn’t go that far profplum. I agree there’s some good leadership and good decisions being made, but I very much get the impression Boris is being dragged along and pushed into things by his colleagues and the media.

I don't think that the businesses need bailouts (particularly Disney and Universal who have other sources of income). But, I do think we can lift some weight off the businesses by getting more money where it's needed: directly to the workers. The $1,200 payment is good, but there's more to do there.