Disney preparing for a "very prolonged shutdown"?

[dvcgirl67]

According to an article in the FT, Disney has laid off 100,000 cast members this week. 70,000 in Orlando alone. They will keep their health benefits, but Florida pays only $275 a week in unemployment, for just 12 weeks. The $600 extra from the CARES act would help. But keep in mind that Florida has processed a whopping 6% of their unemployment claims. These cast members are going to have to get in line behind everyone else.

The part of the article that caught my eye was that Disney will save 500 million dollars per month on labor. They have raised 20 Billion in credit to get through the downtown. They made 7 Billion in profits in the parks last year, which is roughly half of their operating profits. So, completely shutting down is likely cheaper and smarter for Disney right now.

An analyst in that sector said this...."Disney over the past month has raised debt and signed new credit facilities, leaving the company with about $20bn in fresh cash to draw upon for a downturn. “They could afford [not furloughing staff]," said Rich Greenfield, analyst at Lightshed Partners. However, he cautions that Disney is probably braced for a “very prolonged shutdown”.

They may try a slow, 1/4-1/2 speed opening later this summer....maybe? But again, if I read the article correctly, they're saving 500 million a month in labor costs. 6 Billion a year. That's a big incentive to just stay closed until they can be sure that their guests are safe.

Unfortunately, they may be forced to shut down again if the CDC Director is right. In an interview with the Washington Post today, he warns that the second wave of COVID-19 next fall/winter will be far more deadly as it will coincide with the flu season. That's terrible news from a public health/human life perspective of course, but it has to be next to impossible for Disney to map out a strategy with such uncertainty in the weeks and months ahead. They've raised that boatload of cash, in case they need to ride this out for that prolonged period I'm afraid.

 

[WeatherLights]

I would not be surprised if the Disney parks shutdown lasts into next year, for all the reasons you list above.

 

[dvcgirl67]

I would not be surprised if the Disney parks shutdown lasts into next year, for all the reasons you list above.

It's really terrible, but I'm really beginning to believe that this is a possibility.

Perhaps they can squeeze in a 3-4 months (July-October?)...*if* they ran the parks at less than 1/2 capacity? Something like that. But imagine the logistical headaches for them doing that. What do you open? How many employees to you bring back? How do you keep people from congregating in tight groups?

Disney is just not built for this new world with a very dangerous and contagious novel Coronavirus.

 

[disykat]

I actually just bought a small amount of Disney stock. It will be interesting to watch. This whole thing is just mindblowing.

 

[petalsnpolkadots]

I actually just bought a small amount of Disney stock. It will be interesting to watch. This whole thing is just mindblowing.

I thought of doing the same.

 

[MrsCobraBubbles]

It's really terrible, but I'm really beginning to believe that this is a possibility.

Perhaps they can squeeze in a 3-4 months (July-October?)...*if* they ran the parks at less than 1/2 capacity? Something like that. But imagine the logistical headaches for them doing that. What do you open? How many employees to you bring back? How do you keep people from congregating in tight groups?

Disney is just not built for this new world with a very dangerous and contagious novel Coronavirus.

How would they possibly sanitze everything? I mean the grocery store can station an employee at the front to wipe down the handles of the carts, but how could Disney replicate this? They would have to keep stopping rides so that cast members can wipe things down. It's not practical. We need a vaccine or a viable treatment; lets all pray/send good thoughts/or do whatever is acceptable for your chosen belief system that the scientists will solve this thing for us.

 

[dvcgirl67]

I actually just bought a small amount of Disney stock. It will be interesting to watch. This whole thing is just mindblowing.

It's down about what...50% off the highs for the last 52 weeks?. I think it dipped as low as 80 or so. I'm not sure if you're buying stock to "support the team", or from a pure investment standpoint. I don't buy individual stocks, but definitely owned Disney in my portfolio in index funds we held. If there's a "prolonged shutdown" I'm not sure Disney stock has bottomed.

We got out when the Dow was around 27K and moved into treasury funds. We didn't buy in on this bounce all way back up to a bit over 24K on the Dow. Only when we see the fallout from this economic sudden stop will we be able to determine the full damage to our economy. So I believe we'll head back down over a period of months. We just don't feel comfortable getting back in at this level. We'll keep our powder dry and dollar cost average back in at a lower level as the market heads down knowing that we won't be able to time a market bottom. We just feel confident that this isn't it. Everyone should do what they think is best, based on your own level of risk tolerance and your timeline.

 

[dvcgirl67]

How would they possibly sanitze everything? I mean the grocery store can station an employee at the front to wipe down the handles of the carts, but how could Disney replicate this? They would have to keep stopping rides so that cast members can wipe things down. It's not practical. We need a vaccine or a viable treatment; lets all pray/send good thoughts/or do whatever is acceptable for your chosen belief system that the scientists will solve this thing for us.

I agree with you. It's impossible for Disney to open until we hit "Phase 3", which means....we're wide open, like our pre-COVID-19 world. They can't possibly think that they can do it, unless the virus truly disappears at some point over the summer. However, since Singapore just had to shut everything down again due to their largest outbreak, when they thought they had it essentially tamped down, I'm not hopeful. It's 92 degrees there with 65 percent humidity. Also, people would be coming in from all over the country, potentially from parts of the country that have hot spots. How would that work? They have to think about the local Orlando hospital system. If people get sick while at Disney, can their hospital system handle it? Is it fair to put the Orlando hospital system in that position?

We need to hope/pray for either an excellent preventative, therapeutics, better testing and ultimately, a vaccine. I will say this, the scientific world, in many sectors of it, has dropped everything to work on this incredible global problem. I read that the Bill and Melinda Gates foundation is actually spending billions of dollars building different manufacturing facilities all over the world, in anticipation of the need for mass manufacturing. They're building multiple facilities because different types of vaccines would need to be manufactured in different manners. So they're building multiple facilities knowing that several of them may never be used. So, the smartest people in the world are racing to solve this. I just hope it's faster than the timeline we're being given.

 

[disykat]

It's down about what...50% off the highs for the last 52 weeks?. I think it dipped as low as 80 or so. I'm not sure if you're buying stock to "support the team", or from a pure investment standpoint.

This is a small investment that I'm playing with, not my retirement accounts, so it really wasn't about timing to hit the very lowest. It isn't a new investment, simply a transfer from something that wasn't playing well. I thought it would be interesting to have something that I actually recognize and can follow easily. I've had it three days and so far it's playing better than my mutual funds that I'm letting ride the wave and significantly better than what I transferred the funds from.

 

[kdonnel]

It’s not just the parks that might be closed the rest of the year. It would seem that their movie and tv business will need to remain shut just as long. I understand why they need to preserve cash.

 

[JimMIA]

Florida is just starting to plan for some sensible re-openings of some parts of the economy. We reopened 7/10 of one percent of our coastline and the Internet went nuts.

But WDW...I dunno. It sounds more simple than it is.

But just remember our last wait for a bus, or our last wait for the monorail, or our last bus or monorail ride, or parking lot tram ride, or our last walk down main street -- the picture starts to come into focus.

I can't imagine WDW reopening until the covid-19 threat is GONE.

 

[amylevan]

Does anyone know if there are skeleton crews running the rides while the parks are closed? Because speaking strictly as an engineer, you can’t have all of these rides sit for a period of time (and possibly a long period of time) without causing other issues. They need to be run and if not they'll need to be worked on before they can re-open. Which is a whole separate time and money issue.

 

[*DisneyDreamer]

Florida is just starting to plan for some sensible re-openings of some parts of the economy. We reopened 7/10 of one percent of our coastline and the Internet went nuts.

But WDW...I dunno. It sounds more simple than it is.

But just remember our last wait for a bus, or our last wait for the monorail, or our last bus or monorail ride, or parking lot tram ride, or our last walk down main street -- the picture starts to come into focus.

I can't imagine WDW reopening until the covid-19 threat is GONE.

I just can’t with comments like this anymore. Yes, right now it’s absolutely not time for Disney to reopen. But to wait until the threat is gone completely? That might never happen. I guess none of us will ever get to do anything outside our communities ever again. Because if we wait that long Disney Parks and other things will be what’s gone forever.

 

[RamblingMad]

It's not a question of will they reopen. It's what will the Disney experience be like before a vaccine comes out? And will it be worth the money to go?

 

[John VN]

MUSIC. MAESTRO. PLEASE. >>>

 

[FtW Mike]

following

 

[dvcgirl67]

I just can’t with comments like this anymore. Yes, right now it’s absolutely not time for Disney to reopen. But to wait until the threat is gone completely? That might never happen. I guess none of us will ever get to do anything outside our communities ever again. Because if we wait that long Disney Parks and other things will be what’s gone forever.

Well, we'll find out relatively soon what Disney is thinking. They've got an awful lot of people rebooked starting on June 1st. So they're going to have to begin to lay out a plan for what they are thinking to manage expectations.

Of course we'll be able to do things outside our homes and communities again, but it's going to be a matter of how much the virus is spreading and what level of risk a business and its customers are willing to take. Disney is *very* focused on liability....they always have been. They're going to have to ensure that their guests are safe.

Think about what happened in this country after the 9/11 attacks. Everything about air travel changed, almost overnight. I'm old enough to remember being able to walk to the actual gate to greet someone when they getting off the plane. Overnight, we had TSA, and we take our shoes off, we all put everything through x-ray machines...on and on. For many years, we had, and maybe still do have, Air Marshalls undercover on every flight...armed, in case a terrorist was on board. And we've been doing all of that for 20 years. All of this to make the flying public feel safe enough to get onto those planes. And over time we all kind of understood that a lot of that is to give us the *llusion* that we're safe. There were lots of tests on the TSA system where 95% of things agents should have flagged...got through. But you can't fake your way through a virus....you can't give create an illusion of safety. Guests will either be safe, or they'll get sick.

Now we have an invisible virus. And it's something you can get by touching any object, anywhere, that an asymptomatic spreader touches, and then you mess up, just one time...and touch your face. At the stage where we are now, and possibly for months to come, any business is going to have to practice a sanitizing vigilance that I'm just not sure is worth it for some larger businesses. How on earth do you open up Disney World with 125K people, crammed into parks, hotels, buses, ferries, monorails, fireworks shows, theater seating, restaurants, character greetings, buffets...on and on. Disney is all about togetherness, social closeness....not distancing. I just can't envision how they do it.

I heard Florida's governor today....he's put together an "re-open Florida" task force and has given them 5 days to get back to him with a report. He said that he envisions opening hotels by requiring every guest to take a COVID-19 test and prove that they're negative before checking in. Oh, ok....because we happen to have millions and millions of extra tests lying around for the tourism industry? We can't get enough tests made to test the people who actually *have* COVID-19. That's a loooong way off. And that idea from the guy who runs that state that has processed somewhere between 3-6% of unemployment claims.

It's just a public health and logistical nightmare.

 

[Jfldis]

I just can’t with comments like this anymore. Yes, right now it’s absolutely not time for Disney to reopen. But to wait until the threat is gone completely? That might never happen. I guess none of us will ever get to do anything outside our communities ever again. Because if we wait that long Disney Parks and other things will be what’s gone forever.

So it’s been about a month. And 40000 people are dead. Those are real numbers. I don’t know if we can wait for a vaccine but I’m pretty sure we have to wait longer than a month. How long do we wait? If I knew I’d be a rich man. But after only a month it’s just too soon for me to think that I’m never going to get out again.

 

[Scoobie]

Where I live (in Wa.) the county commissioner decided, today, that the governor's stay-at-home order is "unconstitutional" and he has reopened the county. Anyone who wants to go back to work, can. Businesses can reopen, people can where they want - no guidelines. Sheriff's dept. is backing him up - won't stop anyone or businesses from doing what they do. Meanwhile, numbers are just starting to go up here, even though there are areas in this state where numbers are going down. Seems half the politicians have lost their minds and the rest of us will pay for it. So, I'm staying home and saving for my next DW trip of course!

 

[elle21]

Where I live (in Wa.) the county commissioner decided, today, that the governor's stay-at-home order is "unconstitutional" and he has reopened the county. Anyone who wants to go back to work, can. Businesses can reopen, people can where they want - no guidelines. Sheriff's dept. is backing him up - won't stop anyone or businesses from doing what they do. Meanwhile, numbers are just starting to go up here, even though there are areas in this state where numbers are going down. Seems half the politicians have lost their minds and the rest of us will pay for it. So, I'm staying home and saving for my next DW trip of course!

I’m so glad to hear that someone is opening a state again. If you are high risk you are able to stay home and continue having deliveries for necessities. Let the healthy people go out and work.
Disney can’t stay closed until the risk of the virus is gone. Or they’ll never open again. The virus has a 98% recovery rate (and likely higher as studies are confirming that many have it and don’t even know).