Disney CEO Bob Chapek blasted California Gov. Gavin Newsom o Thuursday over keeping Disneyland closed despite what he said was the conglom’s proven ability to open parks safely and reopening support by unions representing nearly 100% of workers.
Chief financial officer Christine McCarthy said the company anticipates Disneyland will remain closed at least through the fiscal quarter — which ends December 31.
On a conference call to discuss the media giant’s fiscal fourth-quarter earnings, Chapek said the California decision is “decimating” small businesses in the local economy. The impact on Disney is brutal. Parks revenue plunged 61% for the three months ended in September and the company took a $2.4 billion hit to the division. It recently announced 28,000 layoffs at its U.S. parks.
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The California opening is based around state guidelines on infection rates and rolling averages that tag counties by color, and make it easier for smaller parks versus larger ones like Disneyland to open sooner. Disney and other operators have called the guidelines arbitrary. Disney chairman Bob Iger quit a Newsom-led state economic recovery task force over the delays.
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“We are extremely disappointed that the State of California continues to keep Disney closed despite our proven track record,” Chapek said today.
He noted that Walt Disney World opened in July at 25% capacity — based on the company’s initial “industrial engineering” estimate — and is now able to operate at 35% capacity while continuing to maintain social distancing guidelines and other protocols. It’s been the same at parks that are open around the world, which have also been able to boost capacity while complying with local regulations. He said bookings are encouraging at parks that are open worldwide.
Disneyland Paris recently shut down again as Western Europe sees a spike in COVID-19 infections. Hong Kong Disneyland had shuttered but reopened. Shanghai is open.
Chapek and McCarthy both noted that a parks recovery requires controlling COVID and it’s not clear when that will happen, although reports of a new vaccine by Pfizer are promising. The company said Monday that trials showed its vaccine to be 90% effective. It could be approved by the FDA for emergency use before year-end. Other big drug companies are also close. That news propelled Disney to its biggest one-day gain, of nearly 13%, on the day of the announcement.
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