The Walt Disney Company made a stunning admission in its latest SEC filing, writing that its left-wing activism has had an “adverse impact” on its profitability.
The family entertainment conglomerate has suffered a string of setbacks in recent years, reporting heavy losses in subscribers on its streaming service Disney+ and consistently underperforming in its new film releases. The company reportedly lost over a billion dollars on its four latest film releases.
In its latest filings with the Securities and Exchange Commission (SEC), Disney admitted that its forays into culture war politics had played some role in those losses due to “misalignment” with their customers’ values.
“We face risks relating to misalignment with public and consumer tastes and preferences for entertainment, travel and consumer products.”
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The company reported in its filing that “The success of our businesses depends on our ability to consistently create compelling content…”
“…these products may be introduced into a significantly different market or economic or social climate from the one we anticipated at the time of the investment decisions. Generally, our revenues and profitability are adversely impacted when our entertainment offerings and products, as well as our methods to make our offerings and products available to consumers, do not achieve sufficient consumer acceptance.”
The Mouse House then described their “environmental and social goals,” or ESG, as high risk. The company’s woke activism has reportedly impacted revenues from advertising sales, subscriptions, theme park admissions, and merchandise, among other sources.
“Further, consumers’ perceptions of our position on matters of public interest, including our efforts to achieve certain of our environmental and social goals, often differ widely and present risks to our reputation and brands. Consumer tastes and preferences impact, among other items, revenue from advertising sales (which are based in part on ratings for the programs in which advertisements air), affiliate fees, subscription fees, theatrical film receipts, the license of rights to other distributors, theme park admissions, hotel room charges and merchandise, food and beverage sales, sales of licensed consumer products or sales of our other consumer products and services.”
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Disney acknowledges in recent filings that its controversial political and social agenda is costing the company and shareholders. The company is concerned that "invisible hand" of Adam Smith is effectively giving the “House of Mouse” the middle finger. https://t.co/KiJ85k9s9q
— Jonathan Turley (@JonathanTurley) November 25, 2023
In the same SEC report, Disney also admitted to increasingly relying on foreign consumers to maintain revenue. According to the report, domestic demand for “out-of-home” entertainment experiences continues to average below pre-pandemic totals.
“Demand for certain out-of-home entertainment experiences, such as theater-going to watch movies, has not returned to pre-pandemic levels. In addition, many of our businesses increasingly depend on acceptance of our offerings and products by consumers outside the U.S. The success of our businesses therefore depends on our ability to successfully predict and adapt to changing consumer tastes and preferences outside as well as inside the U.S.”
Since last year, Disney cut roughly $2 billion in spending on film and television in an effort to offset losses, down from $29 billion. The company is expected to cut a further $2 billion in the current fiscal year to save costs.
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