Ever since the parks first closed, we have been trying to imagine the impact the closures will have on a powerhouse like Disney.
We’ve seen execs taking pay cuts, Cast Members being furloughed, the company taking on new debt, and even purchasing a new parcel of land. To those of us on the outside, it appears as though Disney has been thoughtfully planning their moves not only to protect themselves financially but to ensure a future for the parks we love. Former Disney CEO, Bob Iger, spoke to how the latest events have impacted the company’s vision moving forward in a recent interview with Barron’s.
Although Iger stated that the recent events are “obviously the biggest interruption [they’ve] faced,” he also noted that they are a team of both optimists and realists. They are holding on to the hope that this situation will eventually end and Disney will still have something for people to enjoy and appreciate, maybe “more than they ever have.”
Let’s take a closer look at Iger’s thoughts on how this is affecting a few key elements of the Walt Disney Company.
Disney’s Financial Future
When speaking of the company’s financial future, Iger stated they “have access to capital that will keep [them] more than solvent through a prolonged period.”
He referred to the furloughs being necessary to reduce costs for the company, but that they began cutting costs at the senior executive level first to send the message — presumably that the cuts were a company-wide investment in the future.
He noted the impact to employees in stating “others obviously will feel the impact as well as we look to preserve the long-term health of the company financially.”
Their latest decisions to proceed with the furloughs may leave lasting effects on their employees. But Iger states they were ultimately made for the company’s long-term preservation.
The Future of Disney Parks
In light of staying optimistic, Disney is already looking to determine their new normal once the parks reopen. Iger believes that to get back to pre-closure park attendance, “people will have to feel comfortable that they’re safe.”
With the future being unknown, he stated that this security could come in the form of a vaccine. But without one, it would mean “more scrutiny, more restrictions.”
Disney has been closely monitoring China’s approach and how additional precautions have almost become an expectation.
This process is informing Disney’s plans for the future as they “prepare for a world where [their] customers demand that [they] scrutinize everybody.” He predicts that customers may welcome this scrutiny even if it leads to “hardships” like taking longer to get inside the park.
While Disney has consistently strived for guest safety as a top priority, this voluntary departure from efficiency could have lasting impacts on the future of the parks.
Similar to how the attacks on September 11th, 2001 brought about long-standing security changes, Disney is forced to navigate another unprecedented situation that threatens guest safety and peace of mind.
The Future of Disney Media
He also stated there’s a chance more Disney films like these could be making their way to Disney+ prematurely, but that their bigger films (which he referred to as “tentpoles”) will most likely be rescheduled to later dates in the theaters (as we recently saw with Mulan).
These media moves could be Disney cutting their losses on films they expected a smaller return on (like Artemis Fowl), while still fighting for larger return on highly promoted movies like Black Widow and Jungle Cruise. Iger shared the current plan for larger movies is to “simply wait for slots” in the calendar, even though pushing all of these films back still leaves a large gap in movie releases and production for Disney’s media sector.
Disney hasn’t faced worldwide shut-downs like this before, so they are having to experiment with how long they can hold viewers’ anticipation for a film that has seen drastic delays — all while millions of dollars hang in the balance.
How Disney Moves Forward
Although Iger remains hopeful that Disney and its parks will still offer magical content and experiences following this crisis, he admitted: ““I don’t think we’re ever going to see a return to business as usual… .” However, he meant this in the sense that it is difficult to walk through a trial like this and forget what happened or avoid being refined in the process.
He offered hope for the future by stating: “Disney will take this opportunity to look for ways to run our businesses more efficiently when we come back.” Nothing like a global crisis to find the weak spots in your business model, right? As Iger spoke about the plan for resuming normal operations, he listed two main goals.
First, Disney plans to brainstorm what they need to address to make people feel safe. And second, they need to figure out how to run the company “more efficiently, given what [they] believe business conditions will dictate.” Disney will have to think ahead to not only how their business will look after weathering the storm, but what consumer mindsets will be after experiencing these events.
According to Iger, Disney will continue to strive to remain optimistic about the future because their employees believe in the business and in the brand. They have had to make difficult financial decisions to protect the future of the company, even though they understand the impact these calls have on their people.
But with preservation as the name of the game, Iger and his team have their sights set on creating a park environment where people feel safe, even if that means possible sacrifices. Iger acknowledges a large part of this will be reevaluating the company as a whole and carving out a place among the top priorities to anticipate the effects these events will have on Disney’s future guests.
How do you think the closures will affect Disney’s vision moving forward? Let us know in the comments!