The Hollywood Reporter (Weekly)
UNIVERSAL, DISNEY EMBRACE THEME PARKS AS RECESSION LOOMS
After theme parks saw a big rebound during the pandemic, media giants appear to be leaning more into live attractions. On Jan. 11, NBCUniversal unveiled a blueprint for a Universal Studios park in Frisco, Texas, and plans to open an attraction in Las Vegas to capitalize on the studio’s horror titles.
Theme parks have become increasingly important to these companies as a means to help balance cordcutting losses while their streaming businesses continue to weigh on profits. And, despite inflation and fears of an economic downturn, the theme park business has remained strong, with NBCUniversal reporting a record high of $819 million in adjusted earnings before income, interest, taxes, depreciation and amortization at its theme parks in Florida, California, China, Singapore and Japan in the most recent earnings report in October. This is particularly notable because the advertising market is seeing an impact from recession fears, as CEO Jeff Shell outlined at a Dec. 5 conference. “If you came down from Mars and looked at theme park numbers, you would not think there was a challenging growth environment. It is astounding,” Shell said.
Companies have made some concessions. Disney CEO Bob Chapek hiked up theme park prices, which helped drive profits during the pandemic. But on
Jan. 10, returning CEO Bob Iger reversed some of those measures, offering more days of lower-cost tickets to the parks in California and offering free parking to Disney hotel guests in Florida, among other changes. This was meant to appease consumer grumbling about the price increases but could also suggest an expectation of more park visitors. (Disney domestic parks attendance jumped from 37.4 million in 2021 to 78.1 million in 2022, while revenue rose from $5.1 billion to $12.2 billion, MoffettNathanson estimates.) While neither Disney nor NBCU execs are offering updates that would suggest a negative outlook on the parks, there is some caution on Wall Street, with some analysts saying that the impact from a looming recession has not been felt yet. But even if the downturn keeps up, Macquarie Group analysts are forecasting less of a revenue slowdown for Disney’s theme parks in this recession compared with those in the past.