Disney Reopening Update: $11 Billion New Debt, July Uncertain for WDW, Disneyland Status
In this Disney reopening roundup, we’ll cover the latest meeting by the Orange County Economic Recovery Task Force during which Walt Disney World reiterated that a July opening is not certain, Disney’s rising debt, and the possibility that Disneyland could stay closed until at least August.
We’ll start with Disney’s new debt offering, as that is the backdrop against which the company is making other decisions that impact its financial health. In a new SEC prospectus, the Walt Disney Company disclosed that it has raised another $11 billion in new debt to weather the current crisis that has closed its theme parks and theaters, while halting film, television, and Disney+ productions.
Disney stated that the proceeds would be used for general corporate purposes, including the repayment of other near-term debt, while these senior notes will mature between 2026 and 2060. As you’re undoubtedly aware, Walt Disney World and Disneyland have been closed since mid-March. In Disney’s latest quarterly earnings call, the company revealed that profits were down 91% and the closure of the theme parks alone cost Disney $1 billion in lost revenue.
The Walt Disney Company has already cut executive salaries and furloughed more than 100,000 employees, while also raising raising billions in previous debt rounds to survive the current situation. At the end of last quarter, Disney’s current debt maturities were $12.7 billion over the next twelve months, while the company had $14.3 billion in cash on hand.
This comes as Shanghai Disneyland is open once again, albeit at a significantly reduced capacity. Given that attendance is capped at below 30% capacity, the park is likely operating at a loss. The same will probably be true for Walt Disney World and Disneyland when they first reopen, but incremental attendance caps are a necessary prerequisite to resuming normal, profitable operations.
For those wondering why All Construction Has Stopped at Walt Disney World, there’s your answer. With roughly $20 billion in new debt since the parks closed (on top of previous debt rounds prior to that) coupled with losing $30 million each day the parks are closed, Disney is looking to cut costs.
Theoretically, doing refurbishments and construction while no guests are around would be ideal, but Walt Disney World does not exist in a “theoretically ideal” world. As with everyone else, Disney is constrained by the practical realities of present circumstances.
Next, a look at the latest prospects for Disneyland. One emerging theme to the closures has been that Disneyland’s trajectory could be behind that of Walt Disney World due to divergent approaches being taken by California and Florida. In our recent Disneyland Delays Reservations Another Month, we shared the optimistic note on how San Diego is coming up with a plan to allow its theme parks to potentially reopen earlier, but that’s still probably months away.
Now some pessimistic news out of Los Angeles. That county’s officials are recommending that the stay-at-home order currently set to expire on May 15 be extended for another three months, with Los Angeles County’s Public Health Director saying the extension will happen “with all certainty” unless dramatic changes occur.
However, a couple things are worth noting here. First, Disneyland is not located in Los Angeles County–it’s in Orange County. The sentiment there has been markedly different, with yesterday’s Orange County Board of Supervisors meeting reflecting a desire for California to issue more realistic criteria for urban counties to fast-track phase two, and identify strategies for achieving a safe, reasonable, and sustainable reopening of Orange County’s economy.
Second, even in Los Angeles County, restrictions are being gradually relaxed under California’s four-phase plan. Beaches are reopening this week with restrictions, and some in-restaurant dining and shopping malls could also be allowed to reopen in the coming weeks. That would still leave theme parks several months away. Los Angeles County is home to a huge population of Disneyland Annual Passholders as well as Disney’s corporate headquarters, so how LA proceeds definitely could have an impact on Disneyland, as well.
Finally, another update from the Orange County Economic Recovery Task Force. During the latest virtual task force meeting (embedded above for your viewing pleasure…not that we actually recommend watching), the tone of the meeting was mostly upbeat and optimistic, with several participants expressing a belief that Orange County is doing everything right and trending in the right direction for a more aggressive reopening.
This was tempered by there was extensive conversation about the perception of safety, plus the uncertainty and risks posed by a second outbreak in the fall. There were also worries about a significant resurgence in local cases once more businesses start reopening and visitors return to the area. This in turn could overwhelm local hospitals and also discourage tourists from returning to Florida.
Thomas Mazloum, SVP of Walt Disney World Resorts & Transportation, spoke briefly and reiterated that the booking of reservations starting on July 1 is not necessarily indicative of a reopening date:
“We have taken reservations for July, but that should not mean we are operating in July yet. As you all saw on the news yesterday, we opened up Shanghai, which went extremely well. We were very prudent and very conservative, and things went extremely well. But at this point, we have really nothing to report about Walt Disney World yet. As we have said continuously, we will allow data to guide us as well as the government and not a specific date. So just wanted to make sure we had clarity around that.”
Mazloum was asked about Shanghai Disneyland, and indicated that the Walt Disney Company viewed the reopening of Shanghai Disneyland as a “stair-step” and a “baby step.” He also stated that the company was very encouraged by what they’ve seen thus far in Shanghai. He stated that the park was very disciplined, as were guests. (Which reiterates what CEO Bob Chapek said the previous day about much of when and how reopening goes being dependent upon guest behavior and acquiescence.)
While this might read pessimistically, it’s worth reiterating the signs of optimism. Disney Springs will reopen next week, with an ever-increasing roster of restaurants. Universal’s CityWalk reopens tomorrow! What got lost in the mask controversy that came out of CEO Bob Chapek’s interview is that it otherwise was fairly upbeat. There are signs of life again in the theme park world, and there’s plenty to be positive about.
Finally, I want to once again stress the importance of empathy and respect for those who choose to comment. We welcome a variety of viewpoints here, and will never delete anything on substance alone. However, we will not tolerate insults, arguing, or politically-charged comments. Don’t ruin a 95% fine and intelligent comment with an unnecessary cheap shot, as that 5% will get it deleted. You’re not changing any minds via the comments section of a Disney blog, so please do not incessantly harp on the same point. Say your piece and move along. If you want your voice to matter, contact Walt Disney World directly.
Ultimately, it might do us all collective good to take a step back and realize that even though this is most definitely not the new normal, some degree of compromise and flexibility will be necessary as we endure this temporary abnormal. Those who let perfect be the enemy of good are either going to be housebound for the next year-plus or will be protesting every inconvenience over which they have zero control, as the case may be. It might not be the time for unyielding rigidity–making lemonade out of lemons is probably the best case scenario for now. With all of that said, we truly appreciate everyone who reads and comments. It’s always illuminating to hear others’ perspectives, especially the thoughtful rationale of those with whom we may disagree.
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YOUR THOUGHTS
What do you think of this news? Does Disney’s growing debt concern you at all as a fan? What about the latest developments surrounding reopening dates at Disneyland and Walt Disney World? Any questions we can help you answer? Again, keep comments respectful, apolitical, and on topic. Anything not following these requirements will be removed, as will excessive back and forth arguments.
Tom,
I wanted to sincerely express my appreciation for your blog. I read it often, and in these weird times when we cannot be at WDW, it helps to read good, well written information about it.
Renato
Thanks for pulling together this information. We had a land and sea package planned for July. It’s been frustrating not getting anything from Disney, yet seeing the final payment dates on our calendar coming closer.
I’m a bit irritated with Disney Cruise. The CDC no sail order is in place until late July, yet it wasn’t until today (5/13) that our cruise was officially cancelled. Of course, payment was due 5/2 and just hit my credit card.
Now the cruise is off and parks are “officially” still going to open. I understand your point on Disney needing rolling reservations. What Disney could do is let us know how the customer experience will change. Along with the impact on the price, those pieces would allow us to make an informed decision.
All that being said, thanks for providing us with information in an easy to understand format
We have a trip booked at Copper Creek the last full week of September. If I am being honest I feel like the parks and resorts will not be open by then.
Ever since this thing started for real in March and the parks and the rest of the country shut down I knew it was a possibility that this trip would not happen but I used to think that the parks being closed in September was pretty unlikely.
I know Disney and state and local government in Florida want to open back up and that Disney is taking reservations for July. But before that they wanted to open back up in June or they would not have made that free dinning offer. And before that they were only going to de closed for a few weeks and open back up April 1.
I hope I wrong but I just see us stuck in this hopefully it will look better next month situation for a long time.
I wonder how park hopper tickets will work with parks running at lower capacity and can you be shut out of a park if you have a ticket purchased?
Well we had already rescheduled our trip that was originally scheduled for April to October and had no problems getting dining reservations while working around the Halloween party closures. If they do go to a reservation system for park admission it would make sense that resort guests get priority for daily admission. Especially if they have dining reservations in the park. Maybe they will put DVC members at an even higher place on the list seeing how (for the lack of a better term) we own a small piece of the company. I personality think that if the parks open, the crowds will come.
The Disney Tourist Blog is my go-to for Disney updates!! My family and I have a 6/21 Old Key West reservation that we’re keeping an eye on with the acceptance it will be cancelled. I want to be safe and I believe the “powers that be” want to as well. I don’t want to lose points but that’s what RCI is for:) If our October trip is also cancelled it will be a bummer of a year but I believe the most important thing for everyone is safety. Living through this once is enough, I don’t want to go through it again!!!!
The cruise line just extended their cancellations through July, which is no surprise. We have a Disney park/short cruise combo booked for August and I give it 50-50 odds of happening at this point. With Chapek saying that the cruise will be the last to open, and with this update that July 1 may not be realistic for the parks, I just can’t be very optimistic at this point.
If any part of it is open, we’ll be there. We’re regular Disney vacationers so we don’t feel the need to “do everything” and will be bothered a lot less by limited offerings than some.
I do wonder how and if this pandemic will impact ticket prices moving forward both in the near future and far off future. With the incursion of debt, Disney will want to recoup that but lowering ticket prices may be able to get the volume of guests in (provided enough people feel safe enough to travel). Just a thought that came to mind as I was reading this article. I’m still hopeful to go in June but being realistic that it might not happen.
I do not see any possibility of ticket prices ever going down for any reason. I’ve long held that most would happily pay double current prices for reduced crowd levels, but I seriously doubt it would even make a noticeable dent.
I had been thinking, “If my wife wasn’t disabled and high-risk, I would go as soon as WDW reopens because the lines would be so short.” But now I am thinking that probably A LOT will be closed at first – perhaps 25% capacity inside restaurants, making it very hard to get a sit down meal, probably many of the indoor attractions closed, and then the big thing – social distancing with characters! I casually asked my 5-year-old how she would feel about seeing the characters but not getting to hug them and she started to cry. I can only imagine that many of health families would choose not to go when it reopens, for those reasons, even if they aren’t worried about the virus.
Yeah, I’d agree with all of that. For at least the first few months, Walt Disney World will likely need to subsist on locals and hardcore fans who are willing to accept a diminished experience in exchange for lower crowd levels.
Hell, I might go then just for the photo opportunities. Fewer people to wait to get out of my shots, etc. Did you see the recent Facebook post of slow flyovers of WDW? Also a Youtube video of a follow-through flyover of DL and Knott’s, etc.
My child would get upset too not being able to hug or interact with the characters. That’s what she loves.
In reply to the person who said “spoiled much” over your daughter being sad if she couldn’t hug a character, one of my friend’s daughters is scheduled to start an internship as some type of character in August, I hope it happens. When I spoke to her yesterday about her dreams and why Disney (she used to aspire to Broadway)–she said I just want to bring people joy and seeing the kid’s faces light up and the joy on the parent’s faces when that happens is what I want to do! Please know that those embodying the characters will be really sad if they can’t hug either as that is the personality that Disney recruits! It will happen again, it has to!
I was wondering we have reservations for end of August and if Disney reopens how do they control for capacity if you are staying onsite and have purchased a package? Will you be guaranteed entrance to the parks if they are limiting capacity?
Thanks love your blogs!
Same situation and I really want to go but not if I can’t park hop. Paying full price for limited experience is not appealing. Also don’t think I can wear a mask in the Florida heat and humidity all day.
I have a Disney World vacation booked for late August (resort, theme park tickets & dining plan). I’m considering cancelling because as of now borders are still closed (Canada/US) and even if things reopen I don’t feel safe taking this trip this summer. Is Disney charging cancellation fees for late summer reservations?
Our reservations are now less than 4 weeks out and nothing from Disney regarding re-opening. My final payment was due yesterday and I’ve now received a “past-due” email from Disney regarding our hotel reservation. I don’t want to make a final payment if I don’t know if we’ll be able to visit. What to do??
I am in the same boat. I have to make my final payment in 2 weeks and it’s scary without knowing. Will they refund all the money? If you don’t cancel but reschedule, how far in advance can you reschedule?
People with check-in dates of June 1st haven’t been canceled, I can’t imagine not knowing 2 weeks in advance if you are going or not 🙁
I was told final payment is due 7 days prior to arrival. Normally it is 30 days and the computer system is not set up to reflect the change, so emails still go out. I would call Disney just to be sure.
Really enjoyed your article. Being a native Californian & longtime Disneyland Passholder, I live in LA County where the restrictions will undoubtedly be extended through the end of July (huge sigh) 🙁 I do think that Disneyland at least will adopt a reservation type system like Shanghai where you’ll have to make a reservation or buy a ticket in advance to even go. Once the allotted tickets are sold for that day you will not be able to make a reservation and must choose a different day. It is inevitable that attendance #’s will be a huge factor but honestly with the requirements of wearing a mask alone will deter many from coming, especially in the hot/humid months for both California ( where it can getbover 100 degrees and Florida with the high humidity. I also agree, I don’t think Disneyland will even open till early to late Fall and possibly even longer if things don’t get better.
Tom,
Thanks for all of your articles.
You brighten my day and are always so kind and considerate.
Keep up the excellent work in keeping us all informed.
JC
Any news on Aulani re-opening?
Thank you for your information and insights. Reading your blog is fun, interesting, and a nice diversion from every day life. I especially like your last paragraph. Your excellent phrase “temporary abnormal” is so true. This all is hard, but it won’t last forever, and things could be so, so much worse. I also really appreciate you offering that “perfect” not be the enemy of good. Truth! You bring us fantastic photos, current Disney news, thoughtful observations, and wisdom. Thank you Tom!
You’re welcome and thanks for reading! 🙂
Agreed, I despise the absurdity of referring to any of this as ‘new normal’ because it isn’t in any way! Nice work Tom.
Tom, I’ve been reading your blog for years and have always enjoyed it as someone who approaches parks and fandom similarly, but your coverage of the pandemic-related news has really been extraordinary. As someone who works for local government on policy issues, including COVID response, your attention to council meetings and local actions has really warmed my withered heart. Just wanted to thank you for your ongoing attention and analysis – the perspective of an attorney who is also a Disney fan turned out to be just what I needed to get me through this year.
Thanks for the kind words!
I certainly do not envy anyone in a local government policymaking position right now. It’s fascinating to watch the process from the outside and draw my own inferences, but I would not want to be in that no-win position. Best of luck!
Sort of related to WDW reopening- does anyone have any insight about dining availability? This morning was our morning to book our dining for our November trip and availability for the few reservations we planned to make were slim to none in terms of availability. I plan to keep checking to attempt to get the times and restaurants we want, but I find it interesting that I had an easier time booking dining for the week of New Years than for this coming fall!
We covered the same thing a few weeks ago with regard to resorts and FastPass+ reservations: https://www.disneytouristblog.com/disney-world-news-rumors-imagineering-fun-reduced-resort-fastpass-availability/
My guess is that it’s just an arbitrary limitation until Disney has a better idea of what restaurant capacity will be. It’s better to release more reservation slots later than to cancel them.
Hi Jamie,
Thought maybe I could provide some insight.. I am planning to come in Nov also for F&W and 1/2 Marathon weekend, and my 180 days opened up on Sat. A lot people attending for race weekend have been discussing dining. It also coincides with ‘Jersey week’ and Veteran’s Day the follow week. (Extra) busy week unfortunately – oh, and a lot of people have extra time on their hands right now to plan. 🙂
Tom, I always like your presentation of information. It is straight forward and informative. I am wondering, that while WDW is progressing towards opening and July 1 right now is open for reservations, whether it is more likely that only the hotels and restaurants will be partially open and the theme parks will still be several months off.
It’s really hard to say. My bet would be parks will open one by one before hotels, but I could be totally wrong.
Just a thought – since everything that’s released is well thought out ahead of time – I’ve wondered if the statements about face masks serves multiple purposes. One is to show attempts at safety (whether you agree with if it’s safe or not) and the other may help with people choosing to cancel vs Disney cancelling for them – thus bringing their numbers down for phased openings.
That’s possible, but I think it’s also about normalizing the practice and preparing guests for what’s to come.
I wonder if Disney would’ve been better off waiting. Many local restaurants and retail will undoubtedly require the same–and will also reopen well before Disney. Why not let those businesses ‘break the ice’ (or whatever you want to call it) and familiarize Americans with the practice? I think the backlash would’ve been less extreme if these comments were even a couple weeks from now.
Tom,
I respectfully don’t think it is possible to normalize the practice. As you said, people pretty much have their minds made up one way or the other. I don’t think a month of requiring masks or a year of requiring masks is going to normalize anything for those of us who will never see it as normal. Is it “doing your part” for the moment? Maybe. I could at least understand it more and be understanding of it if I felt it was temporary. I am hoping that it is. I really liked how you called it the temporary abnormal. That is how I see things. If I felt like Disney was approaching it that way I would feel better that it is just temporary until things settle down, a vaccine is developed, or herd immunity has developed. It would be nice if they came out and said some of these precautions are temporary or subject to change as the situation changes. I know not all will but the fact of the matter is many people wont return wearing masks and also having a diminished experience.
Replying to Jody —
I think it might be surprising who is won over to mask-wearing. I think this will be less of a Big Deal as time goes on. I didn’t have strong feelings on it one way or another, and I can more easily see myself purchasing and wearing a mask now than I could three weeks ago. I think many things can become normalized that were previously unthinkable. Having my bag checked at the airport and arranging it so there are no liquids over 100ml is just a minor irritation now. But imagine telling a pre-9/11 individual that one day a bottle of water will be banned on airplanes.
I am curious if there are any thoughts/inklings/rumors going around that WDW and/or Disneyland may do the dated ticket reservation system that Shanghai Disneyland is currently doing. That seems like that may be the best way to ensure, when the parks open, at whatever capacity they are looking at, they do not exceed capacity, and that people won’t make needless trips (whether it be across town or across state lines) only to be turned away from the parks due to lack of room. I know that there are some cultural aspects from Shanghai that will not translate to an Americanized experience (healthy QR codes, for example), but advanced tickets seem like a smart way to transition to a gradual reopening.
My guess is that it’ll be a registration process with valid admission. Meaning that Annual Passholders or anyone with tickets linked in My Disney Experience or the Disneyland app will be able to (attempt to) register for entry. Perhaps a similar system to what Disneyland used for the opening months of Star Wars: Galaxy’s Edge.
So if Disneyland was to open at 25-30% capacity, we have reservations for October. If they are open then, do we get first choice for advanced tickets (if they do it this way) along with the AP’s since we have a reservation? I don’t want to get to California and stay in the hotel and then not be able to get into the park! That would be a wasted trip.