Disney World celebrated its 50th anniversary in April 2022.
Aaronp | Bauer-Griffin | GC Images | Getty Images
Disney
announced in a securities filing on Tuesday that it will nearly double its planned investment to approximately $60 billion over the next 10 years.
Shares plunged over 3% during afternoon trading.
While the company is wrestling with the evolving media and entertainment landscape – and striving to make its streaming business profitable while considering the sale of its traditional TV networks – the theme parks, experiences, and products division has been a standout performer.
However, the company’s domestic parks, especially Walt Disney World in Florida, have experienced a decline in attendance and hotel room bookings. The division’s strength has instead come from its international parks. In the third quarter, the division reported a 13% increase in revenue, totaling $8.3 billion.
Disney will leverage its renowned brands and intellectual property as it expands its theme parks. The company plans to reveal more details about the investment at its investor day on Tuesday.
“Today, as Disney explores future growth opportunities, there are countless untapped stories in its theme parks,” the company stated in Tuesday’s presentation, highlighting “Frozen” and “Zootopia” themed attractions in its parks outside of the U.S., including Hong Kong, Paris, Tokyo, and Shanghai.
Shortly after Bob Iger returned as CEO, Disney announced park changes in response to complaints from guests about rising prices and long wait times.
Disney emphasized the historical results of its parks and experiences business since 2017, driven by increased investment. Like its competitors, Disney’s parks suffered during the pandemic lockdowns.
Disney Cruise Line’s Disney Dream is seen docked in Port Canaveral, Florida, on July 30, 2021.
Joe Burbank | Orlando Sentinel | Getty Images
Rivals, including Comcast‘s Universal parks in Florida, have also experienced a similar slowdown.
This increased investment comes as Disney has been embroiled in lawsuits with Florida Gov. Ron DeSantis, which could impact its proposed expansion of the Orlando location in the coming years.
Earlier this year, Disney filed a lawsuit against DeSantis, accusing the governor and new board members of its special district of engaging in a campaign of political retribution against the entertainment company.
Subsequently, Disney reaffirmed its commitment to invest in and expand its Florida theme park over the next 10 years. In May, Disney announced a $17 billion investment in the Florida hub, potentially creating 13,000 jobs.
The Florida governor, who is now running for president, targeted Disney’s special district after the company publicly criticized a controversial Florida bill, nicknamed “Don’t Say Gay” by critics, which restricts discussions of sexual orientation and gender identity in classrooms.
This month, Disney dropped all claims against DeSantis except for its free speech claims, focusing solely on the First Amendment claim that the governor retaliated against the company.
Disclosure: Comcast is the parent company of NBCUniversal, which owns CNBC.
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