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Quarterly earnings will show how Disney is weathering the pandemic economy

Andy Uhler Aug 3, 2020
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People demonstrate social distancing at Walt Disney World Resort in Florida in this handout photo from the company. Matt Stroshane/Walt Disney World Resort via Getty Images
COVID-19

Quarterly earnings will show how Disney is weathering the pandemic economy

Andy Uhler Aug 3, 2020
Heard on:
People demonstrate social distancing at Walt Disney World Resort in Florida in this handout photo from the company. Matt Stroshane/Walt Disney World Resort via Getty Images
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Disney reports quarterly earnings this week. It’s fair to say the company, like many others, has had its share of ups and downs during the pandemic. It had to close theme parks and dock cruise boats early on. Now it’s negotiating the reopening of some parks around the world. It’s also seeing opportunities to interact with users through its Disney+ TV streaming services.

Much of what Disney does involves density: packing people into theme parks, movie theaters, cruises.

“If there was ever a poster child for being vulnerable to COVID-19 in terms of your business model, Disney is it,” said Lloyd Greif, CEO of an investment bank in Los Angeles.

He said Disney was flying high just six months ago. Now things are very different.

“Disney has to be rethinking the model in this environment,” Greif said.

And it’s starting to capitalize more on people staying at home. Disney purchased 21st Century Fox last year and recently started a new streaming service, Disney+, that attracted a lot of attention when it aired “Hamilton,” and, more recently, Beyoncé’s visual album, “Black Is King,” which is now the top-trending title on the platform.

Abraham Ravid, professor of finance at Yeshiva University, said Disney is diversified enough to hold on even if the pandemic lasts for a while.

“If they could go back to normal, so to speak, by the end of the year, they should be OK,” Ravid said. “They’ll have losses, but they should be able to withstand it.”

One key for the future, he said, is for the company to keep adding subscribers to Disney+.

COVID-19 Economy FAQs

What’s the outlook for vaccine supply?

Chief executives of America’s COVID-19 vaccine makers promised in congressional testimony to deliver the doses promised to the U.S. government by summer. The projections of confidence come after months of supply chain challenges and companies falling short of year-end projections for 2020. What changed? In part, drugmakers that normally compete are now actually helping one another. This has helped solve several supply chain issues, but not all of them.

How has the pandemic changed scientific research?

Over the past year, while some scientists turned their attention to COVID-19 and creating vaccines to fight it, most others had to pause their research — and re-imagine how to do it. Social distancing, limited lab capacity — “It’s less fun, I have to say. Like, for me the big part of the science is discussing the science with other people, getting excited about projects,” said Isabella Rauch, an immunologist at Oregon Health & Science University in Portland. Funding is also a big question for many.

What happened to all of the hazard pay essential workers were getting at the beginning of the pandemic?

Almost a year ago, when the pandemic began, essential workers were hailed as heroes. Back then, many companies gave hazard pay, an extra $2 or so per hour, for coming in to work. That quietly went away for most of them last summer. Without federal action, it’s mostly been up to local governments to create programs and mandates. They’ve helped compensate front-line workers, but they haven’t been perfect. “The solutions are small. They’re piecemeal,” said Molly Kinder at the Brookings Institution’s Metropolitan Policy Program. “You’re seeing these innovative pop-ups because we have failed overall to do something systematically.”

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