The world's most prolific entertainment company is getting ready to prove that it's more than just a Mickey Mouse company. Walt Disney's (NYSE:DIS) reports shortly after Tuesday's market close, and there's a lot going on these days with the market bellwether.
Let's go over some of the questions that Disney may be asked on Tuesday. Let's also size up the likely answers.
1. How much money are its theme parks losing?
Disney's theme parks have been opening across the world over the past three months. It's just the original Disneyland in California that has yet to reopen. Hong Kong Disneyland temporarily closed down last month after an uptick in COVID-19 cases.
Safety was the paramount concern going into the resumed operations of its gated attractions, and Disney has aced that test with flying colors. Media sources would've let you know by now if Disney parks were a hotbed for contagion.
The concern now shifts to the profitability of the operations, as that's the ultimate test of sustainability. Right now it doesn't seem as if Disney's in the black with its theme park segment. The tight capacity limits on daily attendance, travel restrictions, and general pandemic concerns are weighing on the business. However, making money right now isn't the prime objective.
"We are still doing better financially than if we were closed," Disney rival Comcast (NASDAQ:CMCSA) said about its Universal Studios theme parks in Florida and Japan during last week's earnings call.
Comcast lost a lot of money at its resorts in the second quarter, but the point is that it would be losing even more money if it wasn't open. Comcast is able to carve out a better outcome in a challenging climate, and creating jobs for employees and escapism opportunities for customers has some altruistic shine there, too. Let's see if Disney can say that same thing about its early restart efforts.
2. Will more theatrical releases make their debut on Disney+?
Disney's hand was initially forced in bringing content intended for mainstream multiplex audiences to its new Disney+ service. Onward played for two weekends before movie theaters closed down. Disney figured there would be no going back, making the right call to offer it digitally and through the Disney+ platform it launched in November.
Taking Onward literally as marching orders, Disney would bump other future theatrical releases, including Artemis Fowl, The One and Only Ivan, and more famously Hamilton to its Disney+ slate. Most of its upcoming movies are simply being pushed further out with new release dates. The highly anticipated Mulan live-action flick has seen its release date get bumped at least twice since Disney's last earnings call.
However, given all of the favorable buzz that Disney got from rushing Hamilton, Onward, and Frozen II to its streaming service, it wouldn't be a surprise if others follow suit. It would be interesting to see Disney explain the vetting process.
3. When will media networks feel the content pinch?
Along the same lines of Disney's pipeline for theatrical and streaming releases, Disney's media networks division could also be facing its own crunch. Productions have been largely on hold, even though Disney's ABC is rolling out new General Hospital shows this week. It's also initially welcome news for ESPN to see major pro sports coming back, but some of those restarts seem to built on a house of cards.
Disney is a media giant in every sense, and its cable and broadcasting networks have provided a fiscal sanctuary against disruptions elsewhere. However, even Disney's all-weather media networks needs a content plan. We'll see how much the House of Mouse has to offer investors shortly after Thursday's market close.