Disney has posted its first loss in almost two decades after the coronavirus crisis created a perfect storm for the entertainment giant, in which most of its key businesses ground to a near-halt.
The company said it made a loss of $4.7bn (£3.6bn) in the three months to the end of June as sales slumped by 40pc to $11.8bn.
The company’s theme parks, cruise lines, movie business and sports broadcasting division have all been hit hard by the pandemic, overshadowing the wildly successful launch of Disney Plus, its streaming rival to Netflix.
While subscribers to Disney Plus hit 57.5m, well above expectations when the service launched last year, revenues at its tourism business, which includes its theme parks and cruises, fell by 85pc.
The division is traditionally Disney’s largest but has been hammered by the pandemic. Disney’s theme parks were largely closed in the quarter, and although its Shanghai and Hong Kong attractions reopened, attendance has been limited.
Other parks that have reopened since, including its Disney World resort in Florida, have done so with safety measures such as face masks and entertainers forced to keep their distance from children.
Meanwhile, the company’s cruise ships have been docked, and blockbuster films such as Mulan, Avatar and Star Wars have been delayed for at least a year, squeezing revenues at its studio arm. Disney said on Tuesday night that Mulan would be released directly on Disney Plus, signalling another shift away from the movie industry's reliance on cinemas.
Although the launch of Disney Plus has been a resounding success, amplified by the home streaming boom during the pandemic, it has not been enough to make up for the steep declines in the company’s tourism business.
Disney said in February that its longtime chief executive Bob Iger was stepping down, staying at the company as chairman until next year. Parks boss Bob Chapek has taken over as chief executive, although Mr Iger is believed to have taken a more hands-on role than during the pandemic than expected..
Disney last made a quarterly loss in early 2001, when it wrote down hundreds of millions of dollars on Go.com, the web portal it had launched two years earlier during the dotcom boom.