The Walt Disney Company is continuing to lose subscribers, visitors to its theme parks, and other forms of income after a series of film projects featuring leftist ideological influences have tanked at the box office.
In fact, the company has lost so much value that a top financial analyst has downgraded Disney’s stock.
Market analyst Brandon Nispel wrote in a note to clients lowering Disney’s stock rating: “While this note might call the bottom, we have our doubts.”
“Our domestic theme parks attendance data is weak for April and May; Disneyland growth due to its 100th anniversary celebration is more than offset by Walt Disney World contraction from comparisons against its 50th anniversary celebration,” Nispel said. “We worry the ‘tough comps’ are not properly reflected in consensus.”
The market analyst went on to say that he and his team “prefer to step aside, acknowledging meaningful uncertainty, and wait for further catalysts, as buying the dip has been a losing trade,” according to MarketWatch.
Nispel highlighted the underwhelming growth in subscribers for Disney+ and Hulu, the flagship streaming services. Despite the introduction of an advertising tier, both streaming platforms, along with ESPN+, are projected to experience net losses in the current quarter.
Notably, Disney+ has witnessed a decline of over three million subscribers in the current year, following previous periods of growth.
Additionally, even during periods of subscriber growth, the company reported a substantial operating loss of $1.5 billion across both Hulu and Disney+ in 2022.
Regarding ESPN, Disney recently revealed the departure of several long-standing on-air personalities, including Max Kellerman, Jeff Van Gundy, and Suzy Kolber.
CEO Bob Iger had previously announced plans to cut 7,000 jobs as part of a substantial “transformation” that Disney is undergoing.
“While Disney has started to drive pricing, we have yet to see services separate from peers from a churn standpoint, though it arguably has had a bundling advantage,” Nispel said of the company’s streaming services. “Disney, like many peers, is likely to need to monetize existing subscribers better through price increases, while establishing a lower-priced subscription advertising tier to retain subscribers.”
The market analysts further highlighted the significant financial losses incurred by the company due to its recent film releases, a problem that is anticipated to worsen with the projected massive failure of “Indiana Jones and the Dial of Destiny.”
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In total, Disney has lost more than $890 million over its past eight film releases, a run that includes woke box office bombs such as Lightyear, Strange World and the currently running Elemental, which projects to be one of Pixar’s worst-performing films ever released. Lightyear and Strange World were criticized for spotlighting same sex couples while Elemental features a “nonbinary” character who tackles themes of “racism and xenophobia.”
The losses could even surpass one billion dollars as the titles will head to Disney + after leaving theaters. Other studios have leased new releases to competing streaming services in order to rake in extra revenue, though Disney has, in the words of box office analyst Valliant Renegade, allowed their titles to “die on Disney +.”
“Are the days of $200M+ productions done?” Nispel titled a section of his analysis focusing on the film sector.