In addition, Disney suspended its cruises and theatrical shows and postponed theatrical distribution of films both domestically and internationally. It also experienced supply chain disruptions. Also, the company faces issues with the creation and availability of content, which led to the cancellation of certain sports events and film production.
The travel sector is the most impacted by the outbreak. The Amusement Parks industry is expected to experience a decline in revenue in 2020, according to IBISWorld’s analysts. Over the five years to 2019, the industry has experienced strong growth backed by an increase in international and domestic visitor numbers and rising consumer spending.
As of September 28, 2019, the company employed about 223,000 people worldwide. To tackle this crisis, the executive officers of the company agreed for a temporary reduction in the base salaries effective with the payroll period beginning April 5. Executive Chairman Bob Iger will forgo his salary and new CEO Bob Chapek will take a 50% pay-cut while other executives will forgo 30% of their base salary.
Experts believe that the shutdown could last through the end of April but it doesn’t mean that operations would return to normal after that, considering the uncertainty surrounding the epidemic. Despite the near-term weakness, the company is likely to show growth in the long-term backed by its development in the on-demand (from home) entertainment business, which includes Disney+ and Hulu.
Disney’s stock opened lower but changed course to the green territory in the mid-afternoon on Monday. The stock rebounded as the streaming service continues to expand globally after the launch of Disney+ in seven European markets. The shares, which have fallen over 33% in the past three months, are overvalued at the current levels.