Why Disney Ignored Theme Parks on Its Investor Day

December 11, 2020, 12:42 PM · If theme park fans are worried that Disney did not mention its parks during its four-hour Investor Day presentation yesterday, they should not be concerned.

Anything called an "Investor Day" has one purpose — to boost the company's stock price. And Disney's four-hour sales pitch for Disney+ did that, with the company's stock price up more than 13 percent in mid-day trading today. It's a huge win for CEO Bob Chapek and his reorganized management team, now focused on building direct-to-consumer media streaming products.

That does not mean the company is turning its back on its theme parks. Indeed, Disney CFO Christine McCarthy noted that the company's new structure focuses on two main segments: Media and Entertainment; and Parks, Experiences and Products. If anything, that's a promotion for the parks segment in Disney's organizational structure.

But nothing that Disney could have said yesterday about its theme parks would have boosted the company's stock price. The only organizations that can say anything right now that would move Disney's stock up because of theme parks are the FDA and the CDC.

Investors — like anyone else paying attention to the state of the world right now — know that this pandemic is not only continuing, it is getting much, much worse throughout the United States. There's no point in reminded them of the parks' tough position right now. So Disney played up its wildly successful Disney+ streaming service, to which millions of fans in the US and around the world have turned for entertainment while staying at home. Disney executives presented an ambitious plan to develop dozens of new movies and series for Disney+, while also expanding Disney's DTC services around the world.

McCarthy said that Disney expects to quadruple its spending on content development in the next four years, to more than $8 billion a year in fiscal year 2024, up from about $2 billion a year now. That's great news for Disney fans — not just for movie and TV fans, but for the company's theme parks fans, as well.

Theme parks traditionally have served as the reliable cash cow for The Walt Disney Company. When the studios or cable networks faltered, the theme parks have been there to keep the company in the black. But with the pandemic closing parks and largely keeping fans away from ones that have reopened, it is now time for the other segments at Disney to carry the parks.

That Chairman Bob Iger ordered the development and launch of Disney+ — which debuted just months before the pandemic hit and created a massive global demand for in-home entertainment — now looks like one of the great business decisions of all time. I don't want to imagine what Disney's financial situation would look like without the streaming service, if the company had remained so dependent upon theme parks and theater box office for its survival.

But with Disney+ bringing in customers, Disney has a viable path forward that is winning investor support. Ultimately, that is the best possible news for theme park fans right now. When the time is right — perhaps several months from now, after aggressive vaccine distribution has helped bring infection rates down near zero — Disney can fire up a big presentation to talk about how it will take advantage of the upcoming global travel industry recovery by opening a slew of new theme park attractions.

Yesterday was not the time for such announcements. But with public support for a vaccine and responsible behavior in the meantime, one day next year will be. And that should provide some hope for Disney's theme park fans.

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