As the coronavirus shutdown ravages the company, could Disney be considering divesting themselves of two of their Asian parks?
That’s the rumor, according an an alleged insider on the WDW Magic forums.
According to user WDW Pro, there is a plan being discussed internally known as “the Red Button Option” that could see Disney divesting itself of its interests in Hong Kong and Shanghai Parks in the wake of a massive downturn in revenue and an impending “cold war” between the United States and China.
From the WDW Magic forums…
Numbers inside the company now project that cash reserves could hit as low as 6 billion by the end of September, with the possibility of this pandemic situation going into mid 2021.
This is an unsustainable path.
(…) Against the wishes of Iger, a plan is being developed inside the halls that Eisner built which would allow for Disney to sell and divest its interests in the Shanghai and Hong Kong resorts in a preemptive move to avoid losing them outright due to a possible cold war between the US and China.
It is the Red Button Option. In that situation, Disney would use the sale of Shanghai and Hong Kong rights, while maintaining a licensing agreement for IP a la the OLC (Tokyo Disneyland) situation, in order to generate extra cash for a possible extended COVID world where Disney continues to be deprived of revenue streams.
At this point the Red Button Option is still in its infancy as a strategy in conceptualization, but it can quickly be moved into actionable state if situations continue to deteriorate. Going forward with the Red Button Option is fraught with difficulty… not the least of which being that Iger might resign in protest.
It would appear that despite borrowing billions of dollars early into the pandemic, the Walt Disney Company is still in a very fragile state. It’s likely that something will have to give, and with rising tensions between the U.S. and China, cutting loose two of the Asians Parks might be a relative no-brainer if it meant saving the rest of the company.
The rumor goes on to state that Disney is in panic mode right now, as the company is being investigated by U.S. Intelligence because of some of its Shanghai Disneyland Resort executives having ties to the Chinese Communist Party…
Because of the broad and non-specific language in the executive order, Hong Kong Disney may stay closed indefinitely, regardless of the COVID situation there.
Furthermore, in a speech on July 16th, Attorney General Barr made headlines with a speech in which he disclosed the number of Chinese Communist Party officials working in Shanghai Disney management, including the number who have communist insignia on their desks. T
his sent a ripple through the Disney Company as they realized that US Intelligence has inside information about their Shanghai operations, and are confident enough to release that information. This puts the company in an exceedingly difficult place: stray from China’s demands and everything can be taken like in the NBA situation… act in China’s interests and the United States Justice Department may now come calling.
Again, these are rumors… but WDW Pro has been correct (or mostly correct) in the past.
Could the Walt Disney Company be in much hotter water than anyone wants to admit?
Only time will tell.
[Source: WDW Magic]
Pirates & Princesses (PNP) is an independent, opinionated fan-powered blog that objectively covers Disney and Universal Theme Parks, Themed Entertainment and related Pop Culture from a consumer's point of view. Opinions expressed by our contributors do not necessarily reflect the views of PNP, its editors, affiliates, sponsors or advertisers. PNP is an unofficial news source and has no connection to The Walt Disney Company, NBCUniversal or any other company that we may cover.