It's a bittersweet weekend for fans of Disney's (NYSE:DIS) theme parks. Disneyland in California closed last night. Disney World will wind down its gated attractions tonight. Both resorts will keep their shopping districts open for now, but that's a lot like movie theaters turning off their projectors and expecting people to show up just for the high-priced concession stand offerings.
Disney will keep its domestic parks closed through the end of the month, but they are likely to remain closed much longer than that. On Saturday, the theme park giant announced that it was suspending the Disney College Program, paid internships at Disney World and Disneyland where students live on-site, work, and take classes. Participants are being asked to clear out of the housing complex by Wednesday morning. Disney wouldn't be sending a good chunk of its young workforce home if this was just a two-week interruption. None of Disney's overseas parks have reopened since closing as far back as late January, and it's really just a matter of how deep into the springtime season the global park interruptions will continue. It's a small world after all.
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Disney's empire won't completely come undone with its high-tech turnstiles locked down. It realizes that folks will be spending a lot more time at home, and that's where it's unleashing its efforts. Star Wars: The Rise of Skywalker became available for digital purchase over the weekend, three days ahead of its originally slated release for online purchases. Frozen 2 -- another of Disney's blockbuster theatrical releases of 2019 -- became available on Disney+ this morning, three months before that window was expected to crack open.
Release windows are going the other way at the local multiplex. The live action reboot of Mulan that was supposed to hit a multiplex near you later this month is being pushed out to a future unannounced date. Several studios have bumped upcoming releases as the already grim box office receipts are likely to get worse in the coming weeks -- and that's if theater chains even remain open.
Disney's media network properties should also be popular with home-anchored consumers during the COVID-19 lull, outside of ESPN, which isn't likely to be much of a draw now that most of the major leagues have suspended or cancelled games. It remains to be seen if ABC, Disney Channel, and its other networks ramp up content during the typically sleepy summer season if today's climate remains the new normal through the next few months.
Disney will inevitably suffer a huge financial hit by the time it's ready to reopen its gated attractions. Even the segments expected to thrive in this climate might sputter. Disney+ is still a small contributor to the media giant's overall business. Advertisers might be hesitant to overspend in reaching homebound audiences through ABC and other networks if they know folks aren't actively spending. It's hard to thrive when everyone is bracing for a recession, and even when it's safe to reopen the parks and resume its cruise sailings it's not as if Disney will pick up where it left off before the stunning interruptions. The stock's sharp slide in recent weeks is naturally discounting a lot of the financial downturn, but we'll have no idea what the magnitude of the fiscal carnage will be until we are comfortably out of the other end of this tunnel.