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.
I haven’t heard from Disney regarding my scheduled arrival date of June 1st. I originally had an arrival of May 11 and they notified me two weeks prior that they were cancelling it. Monday May 18th will be two weeks from June 1. I guess we’ll see what happens.
So we are just going to the Orlando area for a personal visit this summer and we are not going to try amusement parks. But we would like to go to Ohanas. Will the resort restaurants open before the parks?
Are you planning on going to any of the theme parks like WDW?
Assuming that WDW can get sufficient testing kits my suggestion would be for WDW to restrict visitors to those which have resort reservations and a limited number of season passholders. Prior to entrance to Disney resorts have all visitors tested. They are then restricted to Disney property for the length of stay. Cast Members are tested each day they work as well as the limited number of other persons visiting for the day. If this confirms that all on property are negative then you can have the Disney experience you expect. Otherwise I feel you are paying big bucks for a WDW vacation which cannot provide the experience you expect.
That is actually a excellent idea.
@ Joe. Creative but not humanly possible. Americans alone, never mind internationals folks, do not like to be told what to do and how to do it as evidenced that people could not even stay put for 2 months like most of the rest of the world. People will move in and out of Disney property at will. Disney does not have the capacity to enforce something like that. And what if a one person in a family does test positive? Then what? Do they get a refund? Where do they go? It is just not that simple.
This is best idea I heard. So easy. Those that think a health check invasive don’t need to come yet. Tests are not 100% but this would help. The only problem I really see is spending the money, getting there and someone says stay away because you might have a cold or something minor like low grade fever due to something else entirely. Any suggestions as we look into this idea? Just fun to think about!
It takes days for a test to come back. What would you do, test someone and then confine them to their hotel room until results come back?
Looks like all is not lost with the Galactic Starcruiser hotel.
https://blogmickey.com/2020/05/permit-filed-for-fabrication-and-set-installation-at-star-wars-hotel/
One thing that is not likely to change is most of us not being able to afford it!
If you review the history of the 1917 Spanish flu, eben with neither the concept of vaccines nor science to resolve that pandemic, normal returned. We just have to be more patient than the virus. We’ll get there eventually and the demand for Disney’s incredible product will require the survival of that most wonderful institution!
My sister passed away in September and left me me money specifically for a trip to WDW. We were booked for April and rescheduled to end of August through Davids rentals. I hope by then it’ll be face mask optional, but I doubt it. I just cant imagine walking around in the heat with a mask on. I will reschedule again if that’s the case. I fear even when the parks do reopen, it’ll never be the same. Nothing lasts forever I guess…
I am sorry to hear about your sister but she must have been a fun positive person to want family at Disney. My mom has same wish. You’ll get there for her, maybe not soon but later. Don’t put time line on her generous gift.
Mr T who exactly dropped what ball and how? I pity the fool that thinks the answer to every question is the government.
Awww that is so difficult… so sorry for your loss. Just be patient… things will slowly get back to normal. Disney will be the same ole Disney as it was just more precautions thats all. More hand washing stations, hand sanitizer stations. Probably more staff wiping down commonly touched areas. But that is a good thing to last forever… safer precautions. When my mom passed away 11 years ago, we bought into DVC and every time we go, it is like she is there enjoying the trip with us. Money can be spent so easy but the memories will last a lifetime! Just hang tight for your dream vacation. 🙂 It will happen.
I saw pictures of Shanghai Disney with yellow rectangles taped to the ground. Can those be used for guests to view live entertainment shows while distancing?
I noticed those too. If capacity is severely reduced I would think WDW could do the same. Keep the parades. Keep the fireworks. Keep the social distancing. A trifecta of wins!
Fireworks are a must-have. Sadly, many cities across the nation have canceled their 4th of July shows. Not because of crowds, but because they don’t want to pay for them. Small businesses being closed means greatly reduced gross receipts tax revenue. Not sure about San Antonio, but the mayor isn’t known for being smart. I just hope the show operators had good contracts so they can still get paid. With the amount of pyro WDW uses, I’d be surprised if they don’t have their own factory in China building the shells, comets, and effects for them.
I have pancreatic cancer and I am planning on a trip to Disney World with my family as a bucket list trip together. I am just hoping that the parks are open by then. I don’t mind wearing a mask infact I insist upon it and I plan to rent a car instead of using the busses to cut down on close contact. I know that there will be a new normal but I just wish Disney would come up with a plan even if it is tentative so that we can plan accordingly.
I think a rental car is an excellent idea and I hope they put a plan out that works for your trip. I hope and pray that you and your family will get to enjoy WDW soon. 🙂 After going to the ER two months ago, I started my own bucket list. One thing I would love to do is hold a baby alligator (but alas they are scarce in the north!) I have a friend in Louisiana that would love to direct me to the local alligator conservation area where they let you hold them for free. I hope I get to do that someday. Do you have plans to stay on property? Anything in particular you are especially looking forward to seeing or doing while there? 🙂
Kay we are staying at Animal Kingdom. There is a wildlife conservation on Hilton Head Island that did shows where my son was able to pet a baby alligator but that was several years ago so I don’t know if they still do it.
Animal Kingdom Lodge is so unique – I hope you enjoy it as much we did. We had the pleasure of being able to there years ago, just the one time. I’m so glad your son was able to pet a baby alligator- did he enjoy it? I hope so. (Speaking of animals and kids, I’m terrified of snakes, but got in line with a bunch of kiddos to pet one last summer. I figured if 5 year old kids could do it, so could I!)
Cheers to you Rebecca! Saying prayers that your bucket list comes true!
Rebecca, I’m very sorry to hear that. Next door neighbor’s Dad just got same diagnosis. I’m really hoping it’s all open for you to make your planned trip!
@ Rebecca. I am truly sorry for your situation and first I hope you stay safe. Although Disney might be a bucket list item, you do not want that trip to result in the possibility of your demise. Given that the normal is many months/years away, you need to ask yourself is the risk worth it? There are many other things you can do with your family that can generate wonderful long lasting memories. Just the amount of money and the dreams you have for this trip may not even meet those expectations given the situation. It is a whole lot to think about it for sure.
Hi Rebecca, Just a suggestion, you might want to consider Lyft or Uber as resorts charge a daily car rate plus the rental, it might be more cost effective taking the alternative. Now I cannot speak for the drivers but they should be sanitizing after each rider. I drive for Uber and I clean with alcohol after each rider. Just a suggestion and hope all of your Disney dreams come true.
Anyone miss Splash Mountain? I do.
Absolutely! One of my favorites (top 5!). That and ToT and Everest and FoP and on and on. Just taking that first walk down Main St is magical.
Yeah I do. Not one of my must-do attractions, but I do have fond memories of when it opened. As a CM I got to ride it 48 times before it opened to the public, back in the good old days before crazy lap bars and other things. I even went over during my lunch break several times to ride it wearing my 20K costume. What I miss most though are the lower crowd levels of the 90s!
Many businesses have a ‘no shirt, no shoes, no service’, rule. You abide by their rule or you don’t enter their place of business. I think Disney is between a rock and a hard place by having to follow many new guidelines so they can reopen, while also trying to keep their guests happy. Just like after 9/11, we will have to either accept these new rules or not visit Disney. Our choice. I don’t think Disney really has a choice.
the longer ‘this’ goes, I am more grateful everyday for having had our 1st Family WDW trip in January 2020 (@ Fort Wilderness ).
with a daughter scheduled for her fall Disney College Program (August), my talks with her about realistically what is going to happen – is maybe (like hers) so many people’s response : “my mind knows (canceled, changed, rescheduled, altered, removed, etc…) but I wish someone would tell it to my heart”
I appreciate you Tom for your thoughtful insights.
Good luck to your daughter for the dream job I always wanted, but sadly WAY too old to ever have! I hope she gets to work there and you make many visits.
I loved doing the CP! Pulling for hers to go through and be at least half as fun as mine was. Everyone I know is sick of hearing the crazy stories over and over…and I’m afraid I might be the reason for some of the rules they have now. Sorry about that kids!
Thank you Tom for another great and thoughtful post. My May trip was canceled and because it’s through a group I’m at their “rescheduling” mercy. I always book my own Disney trip but did a group through my daughter’s dance company. She was scheduled to perform in Disney Springs. So now we have been scheduled for next May 2021. At first I thought “that’s crazy”, but seeing other countries closing up again after reopening makes me wonder if Disney World would be opening this year. Thanks again for all the information you provide and the standard you practice. Great writing!
It may be that when you’re outside at the park, and there are a lot less people and safe distances of 6 feet, then you won’t need to wear a mask.
I could envision it more when you are inside enclosed spaces that you would need to wear a mask.
Thanks, Tom, for the sage recommendations on being respectful. It feels like we can, individually and collectively, only process so much of this temporary normal at one time. I was very sad to hear this morning that Broadway will be closed until, at least, September. While it didn’t exactly surprise me, it foreshadows the possibility that NY schools may not open in September, and that theme parks will have a very long time before hey operate normally again. Even though I know I won’t be going to the parks in the next 12-months, (safety playing as much a role as my husband’s furlough), it would be so uplifting to see a place we love welcoming guests again, no matter what PPE and operational restrictions might be deemed necessary. Thank you for the updates and perspectives you continue to provide!
I wonder what reduced capacity looks like in terms of what attractions will be open. Surely if they are operating at 30% capacity, many rides would be closed. Aside from the health and safety changes, which are obviously extremely important, I am personally a bit anxious to “get my money’s worth” so to speak. When the parks do reopen, I would be *very* interested to hear from locals regarding the quality of the experience and what reductions or compromises might affect booking a trip. There are definitely a handful of “make or break” experiences for me. Again, this is all WAY less important than everyone’s health and safety, but it’s the way I’m thinking about getting back to the parks if I assume that Disney will have all those bases covered.
I also wonder what rides may be closed due to the need to wear a mask. Such as Splash Mountain where the bask would get wet, or Space Mountain where the mask could come flying off. If you can’t safely wear a mask on a particular ride, I’d assume they just don’t operate that ride.
Hi Janet. I completely understand where you’re coming from. We have a trip planned in September (re-booked from April), but if many of the parades/shows/fireworks are closed in order to aid with social distancing than we may postpone until next year. I completely understand the need for social distancing and having certain experiences be closed, but it’s tough to pay a lot of money to go to Disney and not have the full experience.
Haha Melinda good image! Although you can easily keep a mask on Space Mountain. I wear my glasses on it, no problem. Same for Big Thunder, RRC and Everest, etc. No issues yet, knock on wood!
Has anyone been notified yet about June cancellations?
I have a trip planned for the end of June and haven’t heard anything from Disney yet.
The price of the tickets. I won’t want to come until I can be there without a mask and EVERYTHING is up and running.
We were scheduled for May 31-June 7 and just received notice from Disney this morning. Our travel agent told us that Disney has been sending out emails every Wednesday morning for trips 2-3 weeks out.
july is less than 2 months away lets get some decisions made—right now with everything else slowly opening it doesnt make sense DW wouldnt either
Tom, my theory lately is that Disney will only initially open the monorail, EPCOT and Skyliner resorts when the parks do re-open. That would fulfill the needs of each hotel category, as well as DVC members. There has been a real lack of information about how Disney plans to address bus capacity and social distancing. It seems more manageable to only offer resorts that are within walking distance, or resorts with the constant frequency of monorail cars (+/-8 people per car) and skyliner cabins (one family per gondola) and maybe open air boats. Any thoughts?
My guess would be all DVC resorts plus the ones you’ve identified (obviously there’s considerable overlap between the two categories).
Yes, but there would have to be bus transportation from all of those still to AK. Unless AK doesn’t open with the others.
I’m curious to see how monorails and buses will be able to adhere to social distancing. I just imagine the wait being ridiculously long.
I imagine resorts opening first even before the parks. The only reason I think that is that the resorts were the last piece of the puzzle to close.
I actually have no idea. No clue. I find myself checking for Disney news literally every couple of minutes.
I’m also still very concerned as a DVC member. We just bought into it last year and now both of our trips have been cancelled due to the pandemic.
I’m sure Disney will be offering sweet deals for guests and annual pass holders but is anyone aware what types of discounts if any were offered to DVC members after 9/11 or 2009?
Disney’s business segment of ‘Media Networks’ is generally the most profitable for the company overall, so hopefully that segment can help the ‘Parks, Experiences and Products’ with the current losses (rob Peter to pay Paul mentality). Also, I am intrigued by state-by-state guidelines for opening businesses, and also read that Universal’s City Walk in Florida is opening soon. Separately, when I read about “Orange County” I usually have to re-read so I know if it is California or Florida, since both Disney parks are located in Orange County, but in 2 different states (and very different state guidelines and approaches). Thanks for the updates.
I know many will disagree, but I think Tom’s right that about letting other places “normalize” masks before Disney requires them. It reminds me of when restaurants and bars stopped allowing smoking – guess I just aged myself…;) People were incensed and said they’d never go to bars and restaurants again. Eventually it just became the new norm. I don’t know that we’ll ever be like China and see more people wearing them than not when it’s no longer mandated, but some people going forward may adopt that practice especially if a vaccine isn’t quick to come. In the interest of full disclosure, I’m in the no masks camp and will gladly be done with them when they are no longer required.
On a slightly different topic, we only vacation once a year and I’m so over lockdown! But Tom and Sarah, you must be going stir crazy with as much as the two of you normally travel! Love your blog and so appreciate your well thought out posts!! Stay healthy all!!:)
Normalize is probably a poor word choice given the connotation (since it’s not going to be a normal thing), but I do think “break the ice” or familiarize are apt.
There’s a huge difference between wearing a mask for a few hours at a local mall, Target, or Applebee’s and wearing it for a few days or a week at Walt Disney World, but local familiarity will definitely chill the vitriol, at least to a degree.
lol and just imagine the gnarly tan lines if we all are wearing masks… also how do you wear a paper mask at waterparks/water rides?
Someone else mentioned tan lines and I hadn’t thought of that:) Between my sunglasses and a mask it would look hilarious!
It’s been cool/cold here so far. I’m not looking forward to wearing a mask for a long time in the Kansas summer, much less Orlando.
A face shield might be more practical if it’s allowed. It would allow breathing and airflow and still stop droplets.
Wearing a mask 8-12 hrs a day is not normal. As a Floridan, wearing a mask all day in 100 + Degrees and 100% Humidity is insane. My wife has asthma and can only wear a mask for about 20 minutes before she starts to struggle to breath through it. So for us, wearing a mask is not a starter for going to Disney. If forced, we will cancel our reservations and wait till they make it optional. I will also request a refund for my APs since they were purchased prior to any precautions that impede our ability to go to the parks. I will just bank my DVC Points for next year and stay longer.