|Disney's Kingdom Needs Some Magic|
|Subject||Profits, losses, and shutdowns|
|Topic||Production and Costs|
|Key Words||Sales, profits, costs, economy, revenues|
On the surface, Disney is living up to its reputation for gaiety and happy endings. It has just opened its latest theme park, California Adventure. However, in fact, the company's performance in 2000 did not have a happy ending. While sales and profits were up for the year, the last quarter showed profits were down.
The performance of Disney's different divisions varied. The theme parks maintained reliable attendance levels and its resorts were busy. However, there is concern that costs are rising and the economy is slowing. ABC, which Disney owns, is in a dangerous position. A year ago it rode the success of "Who Wants to be a Millionaire?" to high profits. However, the ratings for the show are down 26 percent on average. The audience has increased in median age from 41 to 46, while advertisers tend to seek viewers 18 to 49. ABC has not been able to produce new successful sitcoms to bolster its schedule, partly because its complacency caused it to make few pilot shows last season.
The consumer products division, which sells movie-related merchandise, continued to suffer, with both revenues and profits falling. Disney intends to close 100 of the 700 stores. The worst performing part of the Disney company was its internet business. Go.com. found it hard to compete against America Online and Yahoo!, and Disney abandoned the operation, releasing 400 staff and putting its search engine up for sale.
(Updated March 1, 2001)
|Source||Edward Helmore, "Why House of Mouse is haunted by failures," The Observer, February 11, 2001.|
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