Investors Are Starting to Wake Up to the State of Disney

While some people are still hawking Disney stock, some have begun to question what the F-ck is going on with The Mouse. Disney is on a ‘woke path to ruin.' Even ‘Snow White’ actress hates her own story

Earlier this month, Disney announced it is continuing to lose massive sums of money, $512 million in the most-recent quarter, on its streaming service Disney+. Disney stock is down 56% from their March 2021 high. And their one revenue producing asset, their amusement parks, saw a downturn in attendance this summer.

To combat this, Disney has not gone back to basics and focused on the family friendly entertainment that made it an amusement behemoth. No, it’s continued down its woke path to ruin, making sure to leave nothing in its wake.

Some in the financial press tried to spin half-a-billion dollars as a win, because the loss was smaller than expected. (I'm not surprised that Bob Iger employed spin; it is part of his job.)

That article goes on to talk about how Rachel Zegler is trashing the Disney Legacy in the form of the original Snow White and the Seven Dwarfs animated feature from 1937. She has been going on about how a love story is so out-of-date, and how she actively hated the character as a child. It is hard for me to see why she has been chosen to play Snow White in the live action remake, because it is turning out to be more of Snow Brown and Seven Portland Baristas. I think it will be a financial disaster at the box office, along the lines of the recent Little Mermaid live action. It pulled in $500 million at the worldwide box office, which means that it will end up losing a couple of hundred million dollars for Disney.

And investor are beginning to notice that things are not going well. Disney stock slides as investors lose faith

Shares in the Mickey Mouse firm sank 3.9% on Thursday (August 24).

That took them to their lowest in almost nine years.

The stock is down 5% since Bob Iger failed to Wow people on the earnings call August 9th.

There are still "investor magazines" and other news sites hawking Disney as a "bargain" now that the stock price is "depressed."

But there is a bigger problem than lackluster earnings. I believe Disney is a broken brand.

What movie has the Disney Company put out in the past 2 years that has been a success? Doctor Strange in the Multiverse of Madness made $952 million at the box office, but if cost, according to Forbes, $294 million to produce. Let's be conservative and say that with marketing costs they were all in at $400 million on that movie. That means that the Disney Company saw $75 million worth of profit from that movie. If they spent more than $106 million on marketing, and I believe that they did, that would have come out of that $75 million profit.

Guardians of the Galaxy Vol 3 probably had a similar box office haul. Depending on what the actual cost of production was, and the marketing spend. Officially, Disney admitted to a $250 million production budget, and they never talk about marketing costs, but if they spent $100 million on marketing (they likely spent more) then on the $845 million box office, Disney probably realized a profit of about $75 million.

That can't offset the losses on Elemental, Lightyear, Indiana Jones and the Insufferable Feminist, or Little Mermaid. And it doesn't consider the money spent on "direct to D+" crap like Peter Pan. When you add it all up, Disney lost something like a billion dollars on movies in the past 18 months. It won't get better with The Marvels, due out in November, or the stuff they have planned for next year.

The current spin is on declining parks attendance. It is because of excessive heat. It couldn't possibly be because the cost to attend the parks has become astronomical, or that you MUST use a Disney app to schedule every aspect of your attendance, or that it is difficult to understand exactly what you need to do to schedule attendance at the parks even if you can afford a ticket. It doesn't have anything to do with their closing Splash Mountain, or a Star Wars land built around the era of Star Wars (the sequel trilogy) that has No Fans. It can't have anything to do with drag queens trying to sell princess dresses to young girls in the Magic Kingdom? And it definitely doesn't have anything to do with parents' wholesale rejection of their not-so-secret gay agenda. No. It is all about the weather.

And while Universal has seen attendance drop since 2019, it is not at the level that Disney has seen. Disney Is Slipping, Universal Rises, and Other Surprising Findings From Theme Park Attendance in 2022.

Disney is still larger than Universal, but Universal Studios Japan is #3 (based on attendance), Universal Islands of Adventure is #5 and Universal Studios Florida is #7. Universal Studios Hollywood comes in at #13.

The parks were the one part of Disney that ruled. If they have managed to damage their brand by injecting The Message™ (hat tip to Critical Drinker for that) then they have little left to hope for in terms of a speedy turn around. Why do people want to go to Disney? Well kids want to go to see the characters they are familiar with and enjoy. But if they are failing to produce new characters that resonate, and working overtime to destroy their old characters, then kids will not want to go to the parks. And even if kids want to go, who can afford to go?

Disney+ (streaming in general?) is a money pit. Disney, Marvel, Pixar and Lucasfilm movies are losing hundreds of millions of dollars. The parks are slipping. It is hard to ignore that. Still there are some that claim Disney is a bargain with its stock price at a 10-year-low. They aren't asking why it is at a 10 year low.