[Boycott the NFL on HULU...] Disney's fight with DeSantis masks a bigger problem: Its business is struggling

[Leroy N. Soetoro]

<https://www.cnn.com/2023/05/19/business/disney-ron-desantis-
analysis/index.html>

New York
CNN
—
Disney’s battle with Florida’s Republican governor and soon-to-be
presidential contender, Ron DeSantis, is playing out like a reality TV
show. And while Disney’s tactical maneuvering — most recently, abandoning
a $1 billion office project near Orlando — has dominated headlines, that
partly overshadows a less-cinematic reality: Disney’s business is
struggling.

The company’s latest salvo in the back-and-forth with DeSantis came
Thursday, when it pulled the plug on its Lake Nona office complex. The
project would have transferred some 2,000 high-paying jobs from California
to Florida. Now, the mass relocation is off, and Disney said it would even
help the 200 or so employees who’d already made the move come back to
California if they want to.

There are a couple ways to read that news. For Team Disney, the move is
just the latest in which the company is relentlessly dunking on a
relatively inexperienced politician who picked a fight with the wrong
conglomerate. If you’re on Team DeSantis, shutting down Lake Nona reflects
the desperation of a company whose stock is tanking and whose core
businesses face serious headwinds.

There’s a bit of truth on both sides.

A spokesperson for DeSantis said Thursday it was “unsurprising” that
Disney would cancel the project “given the company’s financial straits,
falling market cap and declining stock price.”

He’s not wrong. But Disney’s financial problems have much more to do with
its money-guzzling streaming business and its rapidly dwindling profit
from traditional cable TV.

Its streaming business (Disney+, Hulu and ESPN+) remains unprofitable, and
operating income from its cable and broadcast networks fell 35% on lower
ad revenue in the first quarter of this year.

Disney’s traditional safety net, the reliably profitable parks division,
is still a bright spot from a financial perspective. But fans are deeply
unhappy with recent pricing and logistics changes, saying they feel and
nickel-and-dimed. Disney recently lowered park prices in response to
customer outrage, but that didn’t exactly help its profit crunch problem.

“You need a PhD to plan Disney World vacation anymore — they’ve made it
so, so complicated,” said Pete Werner, who runs the travel agency Dreams
Unlimited Travel as well as WDWInfo.com, one of Disney’s oldest fan sites.
“The parks and resorts have always been good for them,” he said. “That can
change, and that will change if they don’t change direction of the parks
soon.”

Investors seem to share those concerns. Disney’s stock is down more than
5% this year, while the S&P 500 is up 2%. Rivals such as Comcast (up 16%)
and CNN parent company Warner Bros. Discovery (up 28%) have rocketed
higher.

The news of the Lake Nona cancellation came the same day Disney announced
it would shut down its Star Wars hotel, known as the Galactic Starcruiser,
which is barely a year old. Fans had immediately balked at the price for
the resort, where guests paid around $4,800 to $6,000 per cabin for an
immersive two-night experience. That price point proved to be a tough
sell, Werner said, and Disney began offering discounts in January.

With the parks in particular, he said, Disney is “almost surgical” with
cuts.

Given the parks’ importance to Disney’s bottom line, it wasn’t about to
let one of its cost-intensive resorts limp along at a loss.

Disney’s CEO Bob Iger, back for his second stint at the helm, has his work
cut out for him. He may be winning the PR battle at the moment with
DeSantis. But the real work — solving Disney’s existential threats — will
take more than a crack team of high-paid lawyers and communications
professionals to solve.

— CNN’s Natasha Chen and Chris Isidore contributed reporting.


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We live in a time where intelligent people are being silenced so that
stupid people won't be offended.

Durham Report: The FBI has an integrity problem. It has none.

No collusion - Special Counsel Robert Swan Mueller III, March 2019.
Officially made Nancy Pelosi a two-time impeachment loser.

Thank you for cleaning up the disaster of the 2008-2017 Obama / Biden
fiasco, President Trump.

Under Barack Obama's leadership, the United States of America became the
The World According To Garp. Obama sold out heterosexuals for Hollywood
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President Trump boosted the economy, reduced illegal invasions, appointed
dozens of judges and three SCOTUS justices.