Disney loses $2.6 billion due to closure of Disneyland parks amid the pandemic

Disney is one of the major companies that were not able to circumvent the effects of the coronavirus pandemic. The Walt Disney Company’s first-quarter financial record for 2020 was lower as restrictions have been implemented for parks and other recreational places.

Even if Disney remained open in the first few months after the COVID-19 outbreak hit, the attendance was so low that the company was forced to shut down. With the closures of its parks, it is obvious that it would further lose revenues.

Disney’s financial losses at the time of the pandemic

CNN Business reported that Disney suffered from $2.6 billion losses as it tries to recover as the 2021 fiscal year begins. The company’s profits were only $16.2 billion, which is 22% lower than last year.

Currently, there is no fixed date or timeline with regards to the day when Disneyland could open without restrictions in California. The state already stated that it would not be granting permits to theme parks so they can reopen. California will only allow parks to operate again once the cases of COVID-19 substantially decrease.

“Where we have been able to reopen our theme parks with limited capacity, guests have consistently demonstrated a willingness and a desire to visit which, we believe, is a testament to the fact that they feel confident in the health and safety protocols we’ve put in place,” Bob Chapek, Disney’s CEO said as he expressed his hopes for the reopening of Disney parks.

Disneyland’s disappointing income offset by the company’s streaming service

While Disney lost billions, it is still doing well, and it is all thanks to its streaming service division Disney+. It is growing as more people sign up for subscriptions, and earnings from this business are enough to make up for last year’s losses.

It was reported that the company has 95 million subscribers, which grew from the 86 million subscribers it had in December. It was predicted that Disney+ would gain 230 million to 260 million subscribers after three years. The news of Disney+ revenues sent its stock spiraling up by 3% in after-hours trading.

“We’re confident that, with our robust pipeline of exceptional, high-quality content and the upcoming launch of our new Star branded international general entertainment offering, we are well-positioned to achieve even greater success going forward,” CEO Bob Chapek said via press release.