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Disney shares drop as company delays reopening of California Disneyland

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Disneyland’s gates stay shut past July 17 as Disney bows to California’s COVID-19 surge.

The Walt Disney Company announced on the evening of June 24 that it would indefinitely postpone the planned July 17 reopening of Disneyland and Disney California Adventure in Anaheim, scrapping a date the company had been promoting for weeks. The delay also pushed back the July 23 reopening of the Grand Californian and Paradise Pier hotels, though Downtown Disney’s shops and restaurants remained on track to reopen July 9 under existing retail rules. The move came hours after California officials made clear they had no intention of rushing park operators back to business.

• Disney postponed the July 17 reopening of Disneyland and Disney California Adventure indefinitely, along with the July 23 reopening of the Grand Californian and Paradise Pier hotels.
• Disney said California officials would not issue reopening safety guidelines until sometime after July 4, leaving the company “no choice but to delay.”
• Disney shares dropped roughly 2% in Thursday morning trading, adding to losses tied to an estimated $1.4 billion hit to operating income and about $1 billion a month in cash burn from shuttered parks.

Disney Cancels Development Project

Disney’s statement laid the blame squarely on Sacramento’s timeline, not on its own readiness. “Given the time required for us to bring thousands of cast members back to work and restart our business, we have no choice but to delay the reopening of our theme parks and resort hotels until we receive approval from government officials,” the company said. With state guidance not expected until after the Fourth of July, Disney calculated there simply wasn’t enough runway to staff up and reopen safely by mid-July.

Nathan Click, a spokesman for Governor Gavin Newsom, praised the decision, saying the governor appreciated Disney’s responsiveness given the surge in COVID-19 infections across Southern California. The exchange signaled a rare moment of alignment between Sacramento and one of the state’s largest private employers, at a time when California was tightening restrictions statewide as cases climbed.

Union Pressure Mounted for Weeks

The reopening delay didn’t come out of nowhere. A coalition representing 17,000 Disneyland union workers had sent a letter to Newsom demanding the state block the July 17 reopening entirely, citing worker safety concerns. Disney pushed back on the notion that it was operating without labor buy-in, noting it had already signed preliminary agreements with 20 union affiliates covering reopening protocols.

“We have no choice but to delay the reopening of our theme parks and resort hotels until we receive approval from government officials.”

Wall Street’s Reaction

Shares of Walt Disney Co. (NYSE: DIS) fell about 2% in Thursday morning trading following the announcement. The stock drop reflected investor anxiety that had been building for months over the company’s theme park division, which Disney disclosed had already cost it $1.4 billion in operating income earlier in 2020. Analysts had pegged the cash burn from closed parks at roughly $1 billion per month, and every week of delay in Anaheim adds directly to that tally.

The financial pressure is compounded by the fact that Disneyland isn’t Disney’s only park wrestling with the pandemic; the company’s global portfolio was hit as early as January, when it closed Shanghai Disney Resort and Hong Kong Disneyland before shuttering Walt Disney World in Orlando in March. Investors watching the surge of new cases nationally have grown wary of any reopening timeline that assumes the virus curve is under control.

Florida Stays the Course

The contrast with Florida was stark. Despite an online petition gathering more than 9,000 signatures urging a postponement amid a surge in coronavirus cases statewide, Walt Disney World kept its phased reopening plans intact, with Magic Kingdom and Animal Kingdom still targeted for July 11 and Epcot and Hollywood Studios for July 15. Florida’s caseload was climbing fast enough that the state was shattering its own daily case records even as Disney World held its ground.

California’s approach, by comparison, tied reopening directly to state sign-off rather than a fixed calendar date, a distinction that put Anaheim and Orlando on two very different tracks within the same company.

Disney World’s Orlando resort is now the company’s live test case — if Florida’s case counts keep climbing the way they have, the pressure on Bob Chapek’s team to revisit that July 11 date will only grow, and Anaheim’s stalled reopening becomes the template nobody in Orlando wants to follow.