After resisting the pressures of the global crisis for much of last year, Walt Disney ultimately had to capitulate under the pressures of economic recession. The operations of this global company fell by nearly a third, following steep declines in the earnings of Disney’s television network, theme parks, and film studios.
Such results prompted a 10 percent drop in stock value. Disney’s CEO, Bob Iger, emphasizes that the recession has seriously impacted his company and noted that they are trying to cut costs to withstand future turbulence that seems inevitable.
This well-known entertainment producer also announced layoffs for several of its employees working in Disney’s television house and theme parks. It was also announced that they would cut costs in other branches, particularly in the operations of their film studio. The company was also hit by a significant drop in DVD sales in the last three months of last year. The 64 percent drop in DVD sales was primarily driven by poorer film performances compared to the year they released the last installment of Pirates of the Caribbean. Over the past two years, the company has focused on producing family films in the hope of attracting a larger audience, Iger points out, and will continue to work in that direction.
The wide range of businesses this media giant is involved in has helped it cope with the recession better than its competitors, but the strength and depth of the crisis have nonetheless led to a situation where few branches of Disney have remained untouched by it. ABC, the television network owned by Disney, reported, for example, a 60 percent drop in earnings that followed a period of weak advertising and significant debts. The same is happening with the mega-popular Disney theme parks, which reported a 24 percent profit drop in the first quarter due to poor attendance. (T.Vi.)
