Disney will hold a virtual investor day on Dec. 10 to further detail its direct-to-consumer plans. Some investors hope that Disney will use the session to announce a more pronounced foray into sports streaming. “We’re going to put a lot of wind in the sails of our Disney+ business,” Mr. Chapek said on the conference call.
Mr. Chapek, who took over as Disney’s chief executive in February, recently restructured the company to push streaming closer to Disney’s heart. The new setup involves splitting Disney’s television operation into two divisions — one focused on content creation (with a “primary focus” on content for streaming) and the other on distribution (with full oversight of profits and losses). How it will work is still unclear, at least to those outside the company, but the reasoning is obvious: The traditional TV business is sputtering. Newly cost-conscious consumers are canceling their cable and satellite service in larger numbers, putting pressure on ad sales and subscriber fees. A lot of people have switched to à la carte streaming options; Disney+ has made Disney Channel irrelevant for many families, for instance.
Mr. Chapek maintained that his reorganization was going well. “Despite the disruption in everyone’s roles, we have 100 percent buy-in,” he said.
Disney Media Networks, a division that includes ESPN and ABC, was helped by the pandemic, at least from a fiscal standpoint, as production shutdowns and a shift of college football games to later quarters lightened costs at ABC. Ad sales benefited from an extra week in the quarter, a quirk of Disney’s fiscal reporting structure. The division had operating profit of about $1.86 billion, a 5 percent increase from a year earlier.
It was another brutal period for Disney’s theme park and consumer products division, where operating profit plunged $2.5 billion, resulting in a loss of $1.1 billion. Walt Disney World in Florida reopened in July with limited capacity, but other major properties, including Disney Cruise Line, remain closed because of the coronavirus.
Mr. Chapek said that Disney World, which had reopened at 25 percent capacity, recently lifted restrictions to 35 percent “while still adhering to the guidelines that are stipulated by the C.D.C. for six-foot social distancing.” Reservations for Thanksgiving week are “almost at capacity,” Christine M. McCarthy, Disney’s chief financial officer, said on the conference call.
Disney’s theme parks have long been watched as a bellwether for the broader economy. It is unclear whether the masses — now contending with pay cuts and job losses — will be able to afford Disney vacations when the gates fully reopen. It took two years for Disney’s parks division to fully recover from the last recession.