Disney parks closed until 2021?

[Max]

I just heard on a national news channel that there was a big chance Disney might not open parks until 2021, has anyone else heard this?

 

[Laz]

Thoughts? So many rumors, not enough facts.

https://nypost.com/2020/04/23/disney-world-disneyland-may-stay-closed-until-2021-analyst/

 

[Cramden]

There was an analyst from UBS who said this last week. There was also another analyst who back on April 10th predicted they'd be back open by June 1st. Bottom line is nobody has any idea currently when they will re-open. If you hear otherwise it's just someone's opinion.

 

[Max]

Thoughts? So many rumors, not enough facts.

https://nypost.com/2020/04/23/disney-world-disneyland-may-stay-closed-until-2021-analyst/

Also saw the same report on Fox News

 

[Krandor]

Can’t this go into the existing threads?

 

[Disney Bobby]

John Hodulik is a respected analyst for the Union Bank of Switzerland and they are putting their money behind his decision, so it's not just some wild theory. I think he is looking at the fact that business will be impacted so badly that it won't be worth it. They unfortunately probably have to think through the impact of brand damage if they open and an outbreak is traced back to one of the parks. You know the media would absolutely love a story like that.

I still think it opens before that, but nothing would surprise me. Way more complicated than just keeping people physically safe.

 

[rpb718]

John Hodulik is a respected analyst for the Union Bank of Switzerland and they are putting their money behind his decision, so it's not just some wild theory. I think he is looking at the fact that business will be impacted so badly that it won't be worth it. They unfortunately probably have to think through the impact of brand damage if they open and an outbreak is traced back to one of the parks. You know the media would absolutely love a story like that.

Like a few years ago when there was a measles outbreak traced back to Disneyland.

 

[TheBigErn]

It is a wild theory. This analyst is know for making wild accusations which some feel is an attempt to manipulate the stock price in his favor. Don't buy into the gloom. He has no more insights than any of us.

 

[Disney Bobby]

It is a wild theory. This analyst is know for making wild accusations which some feel is an attempt to manipulate the stock price in his favor. Don't buy into the gloom. He has no more insights than any of us.

CNBC had him on in November discussing Disney. He's no crackpot, and a lot of those analyst have a lot of contacts in the industry that we don't. Those companies aren't betting billions off educated guesses.

But the stock price manipulation is a valid point. Of course, that's what they say about anything that said by any analyst. In the end, nothing would surprise me.

https://www.cnbc.com/video/2019/11/...mestic-and-international-end-ubs-analyst.html

 

[tlmadden73]

I would say that would be a "worst cases scenario". If it happens, I don't see Disney as a company recovering. They would stop paying cast members benefits, they would either have to sell off assets or take on huge debt.

 

[KenHutch]

I suspect he is trying to drive the stock down so drum up business. Do I think they will reopen in June. Yes I do with many factors indicating that heat slow down the virus I would guess that we have a good summer and by fall the apparatus for dealing with the virus will be greatly improved.

 

[Eric Smith]

John Hodulik is a respected analyst for the Union Bank of Switzerland and they are putting their money behind his decision, so it's not just some wild theory. I think he is looking at the fact that business will be impacted so badly that it won't be worth it. They unfortunately probably have to think through the impact of brand damage if they open and an outbreak is traced back to one of the parks. You know the media would absolutely love a story like that.

I still think it opens before that, but nothing would surprise me. Way more complicated than just keeping people physically safe.

That could be kind of a chicken and egg thing. Are they putting money behind his statement or did he make the statement to help the investment?

 

[anthony2k7]

You can be sure disney is doing all they can for this to not be true.

I personally think they'll have some form of limited opening before 2021, but there is a huge amount they have to figure out first.

 

[Disney Bobby]

That could be kind of a chicken and egg thing. Are they putting money behind his statement or did he make the statement to help the investment?

Yes, it could be. Or he could know something we don't. Anything can happen at this point.

But I do see his point. I heard Disney is losing $30 million a day closing those parks. But opening them and very few people showing up could make that worse, not better.

 

[anthony2k7]

There was an analyst from UBS who said this last week. There was also another analyst who back on April 10th predicted they'd be back open by June 1st. Bottom line is nobody has any idea currently when they will re-open. If you hear otherwise it's just someone's opinion.

Worth noting the one who said June 1st was from JP Morgan who have close ties to disney with Chase so may have had motives in keeping stocks high.

The UBS guy may have had other motives.

 

[Eric Smith]

Yes, it could be. Or he could know something we don't. Anything can happen at this point.

But I do see his point. I heard Disney is losing $30 million a day closing those parks. But opening them and very few people showing up could make that worse, not better.

That's true, but they're already close to reopening the Shanghai park after being closed for about three months. I don't see a world in which they don't figure out how to open the US parks over the same timeframe. I also think people's risk tolerance is going to slowly rise as this lockdown drags through the summer.

 

[anthony2k7]

Yes, it could be. Or he could know something we don't. Anything can happen at this point.

But I do see his point. I heard Disney is losing $30 million a day closing those parks. But opening them and very few people showing up could make that worse, not better.

Indeed.

If they get to a point where it is safe to open, will people be willing to pay previous prices (or maybe even higher) for an entirely different and perhaps far less disney like experience?

 

[Eric Smith]

Indeed.

If they get to a point where it is safe to open, will people be willing to pay previous prices (or maybe even higher) for an entirely different and perhaps far less disney like experience?

I don't see pricing changing either way any time soon. I don't think they can afford to drop the prices and raising prices wouldn't go over well at all. I would guess that they will try to just break even on the parks in the near term. There may be price increases on things that are harder to track like food and merchandise.

 

[Theme Punk Streaming]

The only reason why Disney doesn't open in some capacity in 2020 is if the State of Florida or Federal Government prevent them from doing so. Disney is bleeding too much cash to not try to generate revenue as soon as they can possibly provide a limited experience with significant safety measures in place. I think the analyst is taking into account the risk of governmental pressure to keep the parks closed for an extended period of time as both State and Federal governments are going to hang their hat on contact tracing to prevent a second round of cases. Theme parks, stadiums, concert venues, etc. are all large gathering places that are "non-essential" elements of our economy (besides the thousands of people they employ) and will be the low hanging fruit to keep closed as long as possible to make contact tracing feasible. Imagine someone testing positive for COVID in July and their local government asks them about their movements over the prior two weeks. If they say that they had been at Disney the week prior it becomes near impossible for contact tracing to be effective in that case.

Disney would have to be able to provide testing to all CMs and guests entering the property on a daily basis. There is a significant cost to doing this on top of the logistical challenges needed to have the space to do this at park/resort entrances. They also take on significant liability as Disney is not a health care diagnostics company like Labcorp or Quest Diagnostics. This changes if there is some form of antibody test that proves reliable and easy to implement in mass. Disney could lean on guests needing to produce some type of report showing they have the antibody.

Regardless, the analyst is most likely right that there will be extreme downward pressure on Disney revenue and ability to capitalize the parks for the remainder of 2020. That doesn't mean that they don't open in 2020, but most likely will operate them at a loss, just not as bad as the loss while having the parks closed.

 

[AtlantaDisneyDreamer]

On the bright side, if they wait until 2021, they will have lots of data and ideas they can use from all of those theme parks across the world that are opening this May/June.



But I think Disney prefers to be a leader rather than a follower.