At a certain point in life, you come to grips with who you are. I am many things, but I’m not a money guy.
That doesn’t mean I don’t like money. I do. I like the things we can do with it, the comforts and experiences it provides.
But I don’t live in a world of spreadsheets. I wouldn’t make a good CEO.
How do I know? Because I wouldn’t do what former Disney CEO Bob Chapek did. I wouldn’t look at a spreadsheet that included $20-something billion in profits and focus on the one segment of the business that was losing money.
I wouldn’t milk the other segments of the company to recover that lost money on the backs of our customers who are already paying a lot for services.
Of course, Chapek was fired and former CEO Bob Iger was recalled to take his place.
But make no mistake, Chapek fell on his sword because he did what a CEO is supposed to do.
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Disney is split into five divisions
- Disney parks: This includes resorts, places like Disney Springs and the Disney cruise line.
- Media and entertainment: Essentially this is the movies, Marvel, Pixar, Disney and some others that Disney now owns.
- Linear networks: This is the media networks like ESPN, ABC and other cable networks in the Disney family like National Geographic.
- Direct-to-consumer: This includes streaming platforms like Disney+ and ESPN+ and Hulu.
- Content sales and licensing: This includes merchandise like that Minnie Mouse shirt you bought from Walmart.
Most of the divisions are quite profitable. However, the streaming platform is not.
That was the plan. The streaming platform launched with an incredibly low price point to lure in viewers and get them engaged. The plan wasn’t for Disney+ to be profitable for a few years.
However, when the numbers started coming in, investors and analysts got anxious, Disney stock waivered and corporately all heck broke loose.
Add in the ongoing issues involving the battle with the governor of Florida and you had the conditions for uneasiness.
Chapek shored up the earnings with a handful of moves that proved unpopular with theme park guests but made investors and analysts more at ease.
Higher prices for park tickets, paying extra to skip the lines, lessened bonuses for season pass holders – on the heels of everything that happened in the last couple of years – visitors to the theme parks began to feel underappreciated.
In essence, you are paying more for your Disney vacation to Florida, California, Tokyo, Paris or wherever to offset losses at Disney+.
Is Disney in financial trouble?
Hahahaha… (hold on let me breathe) hahahaha.
Nah. Don’t worry about Disney. The Walt Disney Company is doing just fine.
So why was everyone worried?
Because that’s what people with a lot of money do when they make slightly less money.
The Disney streaming division lost about $4 billion in the 2022 fiscal year. Disney isn’t used to losing money.
During the last couple of years, it made less money than it used to, but Disney doesn’t really lose money anymore. It may make less money than expected and call it a loss. This time they actually lost that $4 billion.
Holy moly! Disney lost $4 billion?
Ha, no. One of its divisions lost $4 billion. In fact, the rest of Disney made about $28 billion even with that $4 billion loss.
The only place Disney really lost money was on a spreadsheet. Also, Disney+ just raised subscription fees.
How much profit does Disney make a year?
In the fiscal year 2022 – which ended in September – Disney made about $28 billion, which is about $6 billion more than the year before and more than the company made pre-global you-know-what in 2019 when it raked in $27 billion in profit.
For a real comparison of how Disney is doing, in 2009 it made about $5.6 billion in profit. Disney’s investors have gotten very used to the company making money. The House of Mickey Mouse is just fine.
How much does Disney spend a day?
We’re going to stick to the amusement parks for this one – I don’t think I can break down how much they’re spending daily on the various Marvel filming and all that.
Disney reported $2.1 billion in operating costs in a recent quarter. Divided by 90 days, that’s a little more than $23 million a day in operating costs across the parks, from Disneyland to Tokyo to Disneyland Paris. That includes employees in the gift shop to those working admissions and beyond.
So how much does Disney make a day?
Over that same time period, Disney’s parks reported $7.4 billion in revenue. That’s about $82 million in revenue over the same 90 days or just about $60 million per day in profit around the world.
That puts the worldwide parks at about $20 billion in annual profit alone. At first, I thought it was too high and that I messed up the math.
However, Disney reports $28.71 billion in revenue for the parks in 2022. If operating costs per day are about $23 million, that puts annual operating costs at about $8 billion which comes pretty close to our number.
Now let’s revisit an earlier number in 2009, Disney made $5.6 billion in profit.
That means last year, when Disney made $28 million in profit, you could have removed all the profit from the parks ($20 million) and the company would have still made more off its other four divisions ($8 million) than it did in 2009 and that’s with the Disney+ losses.
Of course, that’s not adjusted for inflation, but I think it’s still a significant number.
How much is the Disney Magic Kingdom worth?
According to an Orlando Sentinel story from June of 2020, litigation revealed the Magic Kingdom’s assessed value at $504 million. In its suit, Disney argued the assessment was too high.
EPCOT was assessed at $539 million Hollywood Studios at $394 million and Animal Kingdom at $435 million.
You’ve got to think that now, two years later, those assessed values would be significantly higher. Also, if the Dallas Cowboys are worth $8 billion, the Magic Kingdom would be worth at least a billion.
Honestly, you couldn’t buy the Magic Kingdom for all the money in Christendom. So it might as well be a $1 Googleplex or kajillion or whatever.
What does Disney make the most money from?
Profit? It’s clearly the parks.
The media and entertainment division brings in more revenue – almost double the parks – but also brings in significantly more operating expenses as well.
Lucasfilm, Marvel and Pixar are all very valuable. But they are also very costly.
But doesn’t that investment in the movies help boost profits at the parks?
Yes. Marvel’s presence in parks around the world as well as Star Wars and other Disney-related Intellectual Properties help make the parks more popular.
In fact, according to the website Statista.com, Disney parks held 8 of the top 11 spots in attendance for 2021. Disney fans love the nostalgia, but they also love the studio entertainment.
What do you think about the reported numbers? Let us know in the comments.