The Walt Disney Company reported over $82 billion in revenues in 2022, compared to over $67 billion and over $65 billion in 2020. Whereas the company generated $3.14 billion in net profits in 2022 and $1.99 billion in net profits in 2021.
While Disney has managed to successfully transition to a streaming-based businessmodel, it has faced various challenges due to the massive investments performed by the company in the last few years.
Indeed, Disney is currently grappling with several significant financial challenges. These include:
Struggles in the Streaming Business: Disney’s streaming business, particularly Disney+, has been facing substantial losses. The company reported an operating loss of $512 million in the third quarter of fiscal 2023[1].
Declining Attendance at Theme Parks: Disney World Resort in central Florida has experienced declining attendance, likely due to the lingering impact of the COVID-19 pandemic[2].
Legal Battles and Uncertainty: Disney is embroiled in legal battles, including disputes with Florida Governor Ron DeSantis. The company is also facing uncertainty surrounding its CEO succession plan[2].
Challenges in the Traditional TV Business: The company’s traditional TV business, including ESPN, has been affected by declining revenue and profits, partly due to cord-cutting and the rising price of sports rights fees[4].
Stock Performance: Disney’s stock has been underperforming, with its price at its lowest level in nearly ten years. It has declined since the return of CEO Bob Iger in November 2022[2].
Pressure on Disney’s Streaming Unit, Disney+: The company is facing pressure on its streaming unit, Disney+, which has contributed to its financial challenges[3].
These challenges have raised concerns about Disney’s financial situation and have prompted the company to focus on restructuring and cost-cutting measures[1].
Disney’s main shareholders include Robert A. Iger, chief executive officer (CEO) of The Walt Disney Company between 2005-2020 and he returned as CEO by 2022. Other significant individual shareholders, as of 2022, comprise Susan E. Arnold, Christine M. McCarthy, and Alan N. Braverman. Main institutional investors include Blackrock Inc. with 6.4% and The Vanguard Group with 8%, respectively.
It would be hard to argue for a more recognizable entertainment brand than Disney. Disney is, of course, synonymous with Walt Disney, but it was Walt and his brother Roy who started the company in 1923 in Burbank, California. Disney content is now broadcast on over 100 channels in 34 different languages across the globe.
Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
