Disney’s earnings report for the full fiscal year and fourth quarter of 2022 fell far short of what people had hoped for. Things don’t look good for Mickey Mouse because they didn’t make as much money as they were supposed to and didn’t meet expectations in key areas. It looks like Disney has put more effort into making “woke” shows than into running a healthy, profitable business.
After the report came out, shares dropped by 8% during after-hours trading. This means that the stock price will drop by 40% by the end of 2022. A year ago, one share of Disney stock was worth $175, but now it’s worth less than $100.
The bad news in the report comes from predictions that people will use Disney+ less and that their parks and media divisions will not do as well as they had hoped. The platform for streaming added 12.1 million new subscribers, bringing the total number of subscribers to 164.2 million. This was more than the 160.45 million that Wall Street thought it would be. But the company says this growth will slow down a lot in the coming years. Also, the direct-to-consumer service is not making money. This quarter, it lost $1.47 billion.
Analysts expected the parks, experiences, and products division to bring in more money, but it only did so by 34%. The income from the media and entertainment segment went down by 3% from the previous year. Not much is going well for Disney.
The entertainment company’s bad performance over the past year is linked to the fact that it got involved in the culture war. The latest “Lightyear” movie had a scene of two men kissing passionately. This did not go over well with parents of young children, so the movie was doomed to fail at the box office. Also, a company-wide Zoom call was leaked, where executives talked about their plans to change their entertainment so that 50% of all characters are “inclusive,” like LGBTQ. Many people thought that this would make them lose most of their audience.
Another bad thing the company did was fight against Florida governor Ron DeSantis’ bill to protect young children by educating parents about their rights. From kindergarten through the third grade, the bill said that no one could teach children about their sexual orientation. Disney promised to work to get rid of the bill, even though DeSantis told them not to.
Needless to say, it didn’t end well for Disney because DeSantis fought back and got rid of the special tax district that Disney World had. This special district helped Disney World in a lot of ways, like letting them build whatever they wanted for the theme park and using taxes to pay for services. Now, that’s gone because they wanted to get involved in the government of Florida.
Disney used to be the company that made the best entertainment for children. “The Lion King,” “The Little Mermaid,” and “High School” musical are all movies that show this. The company has come a long way from its glory days because it now cares more about activism than making big hits. This could turn off a lot of parents who have traditional family values and want their kids to grow up with a moral compass that is different from what Disney’s new forms of entertainment teach.
Another thing to think about is that people might find it hard to justify a pricey Disney+ subscription or a trip to Disney World if all they do for fun is protest and the economy is bad. If inflation is already hurting your bank account, why would you pay for expensive, bad entertainment that teaches you something or gets you involved in something?
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