Extended Disneyland Closure Could Cost a $2 Billion Revenue Loss, According to Analysts

The Disneyland Resort closed in March due to the global health crisis. Disney and state officials have been urging California Governor Gavin Newsom to reopen the theme parks and he has yet to deliver.

While the theme park remains closed, Disney has been cutting costs and refocusing their financial efforts. Recently, Chairman of Disney Parks and Experiences Josh D’Amaro announced Disney will layoff 28,000 employees to compensate for the loss. Later, Disney Executives announced their primary focus will be on streaming entertainment.

The closures have many financial analysts speculating on the loss that Disney will take in the upcoming years. Some are saying that it will take until 2024 for Disney to reattain 2019’s earnings. A finance researcher from MoffettNathanson LLC stated that Disney “could swing from a $4.9 billion pretax profit last year to a $1.5 billion loss in 2020.”

In a recent update from Orange County Register, Michael Nathanson, founding partner of MoffettNathanson, noted that Disneyland “has lost an estimated $2.2 billion in revenue during the 216-day closure.” While research by Cal State Fullerton found that Disneyland contributes $8.5 billion annually to the Southern California economy. Based on this study, Disneyland could be costing Southern California as much as $5 billion during the closure.

MoffettNathanson analysts also predicted that all Disney theme parks could potentially face a combined $21 billion revenue loss through 2022 due to the ongoing closures. While Disneyland remains closed, Disney will most likely continue to make financial decisions that will affect the park’s future.

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