Fairy tales are full of lies. Disney stopped paying 100000 employees

category:Finance
 Fairy tales are full of lies. Disney stopped paying 100000 employees


Before the outbreak, Disney had gone through such dark moments as big pay cuts for executives, complete closure of the park, withdrawal of movies, debt and stock price plummeting

After the news came out, Disney shares continued to fall 4% tonight, with the market value directly evaporating over 50 billion yuan.

Disney will stop paying 100000 employees this week

According to the financial times, affected by the new crown epidemic, Walt Disney will stop paying more than 100000 employees from this week. The move could save Disney nearly $500 million (3.5 billion yuan) a month to ease the economic pressure since the outbreak.

More than a month ago, for the first time in Disneys history, six Disneyland parks were closed at the same time.

Now in response to the huge economic losses caused by the closure of the park, Walt Disney Company announced that it would take a pay cut initiative starting this week, involving more than 100000 employees.

It is reported that there are about 177000 actors in the whole Disneyland, experience and product department, including those working in its theme park, Disney Store and other retail locations. 100000 people are close to half of its total staff.

According to the financial times, stopping paying nearly half of its employees would save Disney up to $500 million a month.

After the news came out, netizens said: fairy tales are really deceiving

But Disney is not unable to afford its employees. They can afford it (even if they dont stop paying their employees), said rich Greenfield, an analyst at btig, an American securities firm.

But he believes Disneys pay cut move may have been a very long shutdown..

Disney employees will have to rely on state support because the company will keep its executive bonus plan and a $1.5 billion dividend due in July, the Times reported.

In addition, Disney requires its employees to apply for an additional $600 per week federal weekly unemployment insurance premium.

However, Disney said it would provide all health care benefits to employees on unpaid leave.

In contrast, some large multinationals, including lor u00e9 Al and total of France, have vowed to give up state aid as a sign of solidarity with taxpayers.

43000 employees have been laid off before

Disney had previously announced that it would start dismissing employees on April 19.

Disney confirmed an agreement to maintain health insurance and other benefits during the holiday, which will take effect on April 19.

Disney has reached agreements with several unions for hourly employees who will maintain their health insurance benefits, education support and other employee assistance programs during the temporary leave effective April 19, a Disney spokesman said in a statement

During the closure of the park, less than 200 employees will continue to work.

Earlier in the week, Disney announced plans to lay off some non union employees at its theme park in the United States and stop charging for its annual Park passes.

Share price continues to fall by more than 4% and market value evaporates by 55.4 billion

Its down nearly a third this year

By the end of the day, Disneys share price had fallen by more than 4%, with the latest share price of $102.21, a market value of $184.5 billion and an evaporation of $7.7 billion.

In the long run, Disneys share price has plummeted since February, down more than a third.

This years market value has evaporated nearly 80 billion US dollars (over 550 billion yuan).

Disney with 52 million visitors per year

Six parks have been closed for nearly five weeks

As the worlds largest entertainment group, Walt Disney operates theme parks and hotels in the United States, Europe and Asia. The novel coronavirus has been closed for nearly five weeks, however, due to the outbreak of the new coronavirus.

Data shows that Disneyland attracts an average of more than 52 million tourists every year, making it the most visited resort in the world.

However, the epidemic continues to spread all over the world. Disney closed two Disneyland parks in Shanghai and Hong Kong on January 25 and 26, respectively. Later, Tokyo Disneyland closed at the end of February. On March 12, Disneyland in California, USA announced the closure. On March 16, Disneyland in Florida and Disneyland in Paris, USA also closed.

This is a 96 year old Disneyland. For the first time in history, all six of its parks are closed at the same time. At the same time, Disney closed all its hotels, and its cruise business will be suspended throughout March.

On March 28, Disney announced that the operation time of Disneyland parks and hotels is to be determined. But customers can now book trips on or after June 1.

Park accounts for nearly 40% of revenue

US Customs lost 350 million yuan in one day

Parks and resorts are Disneys main source of revenue: in its fy2019 annual report, the parks and resorts segment generated more than $26 billion in sales, accounting for 37% of the companys total revenue.

In February, Christine McCarthy, chief financial officer of Disney, said that during the most prosperous season of the lunar new year, the parks in Hong Kong and Shanghai would be closed due to the epidemic. Based on the two months of closure of Disneyland due to the epidemic, it is estimated that the financial impact of this quarter is 175 million US dollars, including 135 million US dollars in Shanghai park and 40 million US dollars in Hong Kong Park element

If the epidemic causes Disneyland in Shanghai and Hong Kong to be closed for two months, the loss will be as high as 280 million operating profit, including 135 million for Shanghai Disneyland and 145 million for Hong Kong Disneyland.

But it never occurred to me that the losses in Shanghai and Hong Kong were just the beginning. With the spread of the epidemic, Disney in the United States, Japan and France closed down one after another. In 2017, Disney in Florida lost $100 million for two days due to Hurricane shutdown, that is, $50 million for each day of shutdown. (i.e. RMB 350 million)

From March 9, some facilities of Shanghai Disneyland were reopened, including disneytown, Xingyuan Park, Shanghai Disneyland Hotel, etc.

Withdrawal and extension of films

On the other hand, Mulan, black widow and X-Men: mutants, which have attracted much attention, have successively cancelled the original release plan, and the schedule has been postponed without determining a new time for listing.

Pixar Animation onward was greatly influenced by the U.S. box office, and was put on the digital platform early.

And these films were all made by Disney with a lot of money. For example, Mulan has a budget of $200 million.

Hollywood Reporter predicted on March 13 that the global box office would lose at least $7 billion.

In addition, ESPN, Disneys sports channel, has 85 million subscribers. JP Morgan expects Disney to lose $400-500 million in turnover due to the cancellation of major sports events affected by the epidemic.

In terms of revenue, in the first quarter of 2020, film and television entertainment contributed US $3.76 billion, accounting for 18% of the companys revenue. Last year it made a profit of $2.7 billion.

The chairman of the board announced that he would give up all remuneration

All executive pay cuts

Novel coronavirus pneumonia has been a major impact on the business. Disney, executive director of BobIger, announced that it would abandon all the remuneration from April.

Egger is one of the highest paid executives in the United States, with Disneys compensation of US $47.5 million (about 340 million yuan) in fiscal year 2019 and US $65.6 million (about 460 million yuan) in fiscal year 2018.

Disney executive chairman Paul Berger will give up his salary to help the company through the difficulties.

At the same time, all the senior management also accept the notice of salary reduction.

Bob chapek, chief executive, said in an internal letter to employees on March 30 that the companys executives would all cut their salaries. Starting April 5, all vice presidents will receive a 20% pay cut, senior vice presidents 25%, and executive vice presidents 30%.

Chapek himself will have a 50% pay cut.

Chapeks base salary is $2.5 million, annual target bonus is $7.5 million, and annual long-term incentive allocation is $15 million. A 50% pay cut applies to his base salary, not to his entire compensation package.

Chapek said the pay cut will continue until the business can be expected to continue to recover.

Raise two new debts a week, totaling 52 billion

Over the past month, Disneys debt has increased and new lines of credit have been signed, giving the company about $20 billion in cash flow to cope with the economic downturn.

In late March, Disney said it planned to raise nearly $6 billion through bond issuance to ease the cash flow crunch due to the outbreak. According to the SEC documents, the interest rate of bonds issued by Disney is between 3.35%~4.7% and the maturity is 2025 -2050.

On March 26, Disney raised another $1.3 billion in new debt.

Disney reported raising $1.3 billion through the issuance of Canadian bonds. The new debt includes 3.057% of the senior notes due in 2027. The reason for this new debt, as filed by the securities and Exchange Commission, is for general corporate purposes, including the repayment of debt (including commercial paper).

The new debt is cheaper than the $6 billion previously issued, but must be repaid earlier than other debt issues.

The first quarter financial report of fy2020 shows that the companys current liabilities are about 35 billion US dollars, of which the long-term borrowings due within one year are about 10 billion US dollars, and the borrowings are up to 38 billion US dollars.

In March 19th, novel coronavirus was transmitted by Disney, which could lead to changes in consumer behavior and further disrupt the companys business. The epidemic also made it difficult to predict business performance, especially in the short and medium term.

Disney + became a new hope, attracting 50 million subscribers in five months

But it lost nearly $700 million in the first quarter

In this context, Disneys streaming media Disney + has become Disneys new hope.

According to the latest data, Disney + has more than 50 million subscribers in just five months since its launch.

According to the analysis, accelerating the transition online may be the key to Disneys strategy in 2020, but the financial report shows that Disneys streaming media is still in the money burning stage and still losing money.

According to 21st century economic report, by the end of December last year, TV network and park experience were still the two most profitable business sectors of Disney, with revenue contribution of $7.36 billion, $7.4 billion, film entertainment profit of $2.7 billion and streaming media platform Disney + loss of $1.8 billion.

In order to compete with Netflix and Amazon for the position of the big brother of the streaming media market, Disney launched its own streaming media Disney + at the end of last year.

The first quarter financial report of fy2020 shows that by the end of 2019, the number of subscribers of Disney + streaming media service is 26.5 million, which is much higher than the previous market expectation of 20 million.

Disney + has been popular for a long time. Since it was launched last year, it has earned enough attention for Disney. On the first day of its launch, more than 10 million registered users have been registered, which has also become a catalyst for the rise of Disneys share price in 2019.

On March 24, Disney + was launched into the European market, with over 5 million downloads in seven new European markets on the first day.

On March 28, Disney + announced a number of films that will be streamed online in April in order to give isolated audiences more options.

The film list is mainly documentary, mainly some documentaries produced by National Geographic and Disney nature, including African cats, we were born in China directed by Lu Chuan, etc., and Pixars latest animated film magic of 1 / 2, which was released in North America on March 6 and will be launched in Disney + in advance on April 3. In addition, some animated short films produced by Disney in the 1930s and 1950s, and TV programs such as celebrity survival in the wilderness are also available for users to choose from.

Tianfeng securities analysis pointed out that in the battle of streaming media hegemony, Disney has the first mover advantage, obvious IP barriers, cost-effective packages, international pace and unique online and offline experience interactive closed-loop, which brings higher valuation premium than traditional peers. But its crucial to break the audience forecast this year.

However, in terms of revenue contribution, Disney + still has a small contribution and huge investment in content cost. Its dtci business unit lost $693 million in the first quarter, compared with $136 million in the same period last year.

Therefore, Disney to make money, mainly look offline.