The Waly Disney Company continues to struggle in 2020, as the entertainment conglomerate first has reported its first annual financial loss in over 40 years, suffering a loss of over $5 Billion USD in revenue as a direct result of the ongoing COVID-19 pandemic.
As per MarketWatch, according to the company’s November 12th quarterly report, Disney’s fourth-quarter losses totaled $710 million USD, which led the company to suffer its second consecutive red quarter.
Prior to 2020, Disney had not reported a quarterly loss since 2001, when the company ceased operation of the internet search portal Go.com, and had not seen back-to-back quarterly losses since 1996.
Disney also reported an annual grand total of $2.83 Billion in losses, which marks the first time the company has marked an annual loss since 1980.
COVID-19 has been cited as the main reason for Disney’s financial nightmare, with the company also reporting that the ongoing pandemic cost them $7.4 Billion in operating income, with most of this drop coming from its theme parks, ‘experiences’, and consumer products – which includes Marvel Comics.
As for its film division, production delays to upcoming Marvel films such as Black Widow and The Eternals and the continued widespread closure of theaters drove led to Disney pulling in just $1.6 Billion, a drop of $1.71 Billion from its $3.31 Billion cinematic revenue in 2019.
Additionally, the company’s total revenue also suffered a significant drop, with Disney reporting only $14.71 Billion in 2020, compared to its $19.1 Billion total in the same period last year, for a grand total in $5 Billion in revenue loss.
During the Thursday report, CEO Bob Chapek recognized that “It’s been a year unlike any other in our lifetimes, and certainly in the history of the Walt Disney Co.”, but also assured investors that all was not lost, as “the real bright spot has been our direct-to-consumer business, which is key to the future of our company.”
“And on this anniversary of the launch of Disney+ we’re pleased to report that, as of the end of the fourth quarter, the service had more than 73 million paid subscribers — far surpassing our expectations in just its first year,” announced Chapek.
Chapek also spoke on the continued closure of Disney Parks, particularly in California, and expressed how Disney leadership was “extremely disappointed that the state of California continues to keep Disneyland closed despite our proven track record.”
“Our health and safety protocols are all science-based and have the support of labor unions representing 99% of our hourly cast members,” argued Chapek. “Frankly, as we and other civic leaders have stated before, we believe state leadership should look objectively at what we’ve achieved successfully at our parks around the world, all based on science, as opposed to setting an arbitrary standard that is precluding our cast members from getting back to work while decimating small businesses in the local community.”
In a year that saw the departure of former Disney CEO Bob Iger, the furlough of roughly 100,00 workers, the direct laying off of 28,000 more, near-universal condemnation of its tent pole Mulan remake, and abysmal sales for their highly promoted Marvel’s Avengers video game, these annual financial results are devastating, but ultimately unsurprising.
What do you make of these losses? Do you think Disney can recover once the pandemic has passed?