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The Disney Debacle...

It's another not so happy day today. More news is coming out about who is being laid off at Disney and the list continues to grow. Today is because, after a lengthy, not very dignified series of threats and airing of grievances at the Governor of California, Disney is getting what they wanted (but didn't really want). The debacle is complete.


So, let's break it down and take a look at what's happening.


Fresh Baked on YouTube has a video yesterday in which he reveals a rumour on the opening guidelines for California theme parks. In the video, he mentions that Orange County is in Red tier, and will need to go to Orange, stay there for at least 3 weeks, and then Yellow before theme parks can open to local guests (must live within 120 miles) at 25% capacity with attractions at 50% capacity, with no indoor queueing.


This would put a possible re-opening of Disneyland somewhere between November to January. The management at Disney probably knew this which started the stand-off with the Governor. That's why the ads, the press conferences, the layoffs (although if we're honest, the layoffs have very little to do with Disneyland's closure. Yehaa Bob and NBA Experience have no impact on Disneyland and should have been vice-versa).


So, the Walt Disney Company got their wish and the Governor is set to release guidelines. Discussion ended since Disney essentially threw a temper tantrum, and they are what they are. So, demanding the guidelines should be a good thing, right? Then why did Disney immediately ask them not to be released and why did Bob Iger resign from the Governor's committee looking at economic recovery post-COVID?


That's simple. The last thing Disney wants at a fiscal quarter and year end is news that they're about to lose another quarter of Disneyland revenue to start fiscal year 2021. That ruins the narrative on financial gains in Q4 because of crowds at Disney World and the success of Mulan, with Disneyland coming online imminently. That causes panic and affects the share price.


In fairness to Disney, nobody could have expected a global medical pandemic a year ago and COVID-19 has changed everything, even if just for a short while. I understand the unfairness of it all. That said, there needs to be a seismic shift in how Disney manages its operations and financial reporting. A shift away from only catering to shareholders at the expense of the people who pay for merchandise and vacation packages AND the people that work for them.


What I'm proposing isn't some radical left idea. What I am proposing is that Disney starts to really focus on what their guests are telling them, not just the parts they want to hear. This means they need to be open to negative feedback. This means that the inventory management systems at ShopDisney need to be fixed. This means charging full-price for a quarter of a vacation experience is not reasonable.


There is a way out. I hope that Disney management realizes that they need to get back to the basics (Walt basics) and that means focusing on guests and less on profits. The profits will come if they maintain high guest satisfaction, make movies we actually want to see, and let us easily buy the merchandise we want.


I hope Disney management sees this clearly, because if they don't we could be in for a real bad time ahead.



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