Disney fell far short of expectations after releasing their fiscal full year and fourth quarter 2022 earnings report. It’s not looking good for Mickey Mouse as they missed expectations on profit and key revenue segments of the business. It seems Disney has prioritized their woke programming instead of operating a healthy, profitable business.
Following the report, shares fell 8% in after hours trading, extending the 40% decline in stock price throughout 2022. A year ago, Disney’s stock price stood at $175 per share and it has plummeted to under $100 per share since.
The drivers of the dismal report include projections of slowing demand for their flagship streaming platform Disney+ and underperformance in their parks and media divisions. The streaming platform added 12.1 million subscriptions bringing their total subscriber base to 164.2 million. This was higher than the Wall Street estimate of 160.45 million. However, going forward the company warns this growth with slow substantially. Furthermore, the direct-to-consumer service is not profitable as it lost $1.47 billion this quarter.
The parks, experiences, and products division saw revenue increase only 34% which failed to meet analyst expectations. The media and entertainment segment saw revenue decline 3% year over year. Things are not looking great for Disney.
This terrible performance over the past year has correlated with the entertainment company inserting themselves into the culture war. They decided include an intimate homosexual kissing scene in the latest “Lightyear” film, which did not resonate with the parents of young children, so the film inevitably flopped in the box office. Furthermore, a leaked company-wide zoom call showed executives discussing their agenda to shift their entertainment to have 50% of all characters be “inclusive”, such as LGBTQ. This drew much speculation that it would alienate the majority of their audience.
Another detrimental position the company took, was opposing Florida govern Ron DeSantis’ parental rights education bill passed to protect young children. The bill banned school employees or others from teaching children about sexual orientation from kindergarten to third grade. Disney vowed to work toward repealing the bill, despite DeSantis warning them not to do so.
Needless to say, it did not end well for Disney as DeSantis fought back and dissolved the special tax district that Disney World had. This special district provided innumerable benefits to Disney World, such as erecting structures at their discretion for the theme park and taxing itself to provide services. Now that’s gone because they wanted to interject their activism in Florida government.
Disney used to be a company that produced the gold standard of children’s entertainment. Films exemplifying this include “The Lion King”, “The Little Mermaid”, and “High School” musical. The company has strayed far from its glory days by focusing more on activism than producing box office hits. This may turn off many parents who have traditional family values and want to raise their children with a moral compass incongruent with the indoctrination found in Disney’s new forms of entertainment.
Another thing to consider is that people may have a hard time justifying an expensive Disney+ subscription or visiting Disney World if their entertainment only consists of activism and the economic outlook is terrible. If inflation is already destroying your wallet why would you pay for expensive, bad entertainment that consists of indoctrination and activism?
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