Disney CEO Bob Iger announced in a presentation to investors earlier this week that the company will be "quieting the noise" surrounding the ongoing culture wars in America. In a report released by Needham media analyst Laura Martin, it was revealed that Iger plans to shift the company's focus away from divisive political and social issues and instead focus on expanding their theme parks.
This announcement comes after Disney received backlash for publicly criticizing Florida legislation that restricts classroom discussion of sexual orientation and gender identity. However, Iger made it clear that the company will not be abandoning their values, but rather prioritizing their business. "We are a company that values inclusion, diversity, and equality, but we also understand the importance of maintaining a positive relationship with our consumers," Iger stated.
In addition to "quieting the noise," Iger also revealed plans to invest a whopping $60 billion over the next decade in their theme parks, including Disneyland in California and Walt Disney World in Florida. This is double the amount that was invested in the past decade and shows a significant shift in the company's priorities.
Some investors were initially concerned when Iger mentioned the parks division as a "key growth engine" during the company's last earnings call, as it was seen as reaching its maximum potential. However, with this new investment, it's clear that Disney sees great opportunity for growth in their theme parks, which have been consistently successful in the past.
But it's not all sunshine and rainbows for Disney. The company has been facing challenges in other areas, such as declining viewership for its cable channel ESPN and disappointing box office performance for some of their recent movies. This, coupled with the continued financial losses of their streaming service Disney+, have put a strain on the company's overall profits.
In the most recent quarter, the Parks, Experiences, and Products division generated $2.4 billion in operating income, while the Media and Entertainment Distribution division had a decline of 18% with only $1.1 billion in profit. It's clear that the theme parks are currently carrying the weight for the rest of the company.
Despite this, Disney remains a powerful force in the entertainment industry and is certain to continue to make a social impact with its content. However, it appears that the company is taking a step back from the culture wars and focusing on what has proven to be a successful and profitable venture for them – their theme parks.
While this shift in focus may disappoint some progressive advocates, it is a smart move for the company. With billions of dollars of investment at stake, Disney simply cannot afford to alienate any potential customers. And with their parks being a bright spot in an otherwise challenging market, it's a smart business decision to prioritize their growth and success. Only time will tell how this shift will affect Disney's future, but for now, it seems the company has chosen a new path.