Could Tokyo Olympics Turn Into the “Disney” Olympics?

 by Ray Keating

Analysis/Commentary

DisneyBizJournal.com

January 30, 2021

 

The Tokyo Summer Olympics Games were supposed to happen in 2020. But COVID-19 had different ideas. Now, the Tokyo 2020 Olympics are scheduled to open on July 23, 2021. But questions swirl as to whether or not Tokyo will be able to pull it off, and whether or not the Japanese people actually want it to happen. 

 

That, in turn, has led to speculation in certain circles that the Olympics could find their way to Orlando. Could the Tokyo Olympics become the “Disney” Olympics? That’s highly – and I mean highly – unlikely.

Concerns and speculation about the Games have flourished due to a combination of a spike in COVID-19; emergence of new virus strains; a slow rollout of vaccines; and polls earlier this month pointing to significant opposition or doubts about the Games among the Japanese. As AP reported, “More than 80% of people in Japan who were surveyed in two polls in the last few days say the Tokyo Olympics should be canceled or postponed, or say they believe the Olympics will not take place.”

 

The Tokyo Games would mean the arrival of some 15,000 athletes and thousands more related personnel and media. That makes lots of people uneasy, to say the least, during this pandemic.

 

Of course, when there’s trouble, you can usually count on politicians stepping in to either make matters worse, or to take advantage of the circumstances somehow. Hence, we have Florida Chief Financial Officer Jimmy Patronis ginning up attention by offering Orlando as an option for the Summer Games. After all, there was the NBA bubble, so why not the Olympics? And lots of people come to the area, so why not the Olympics – and on very short notice without any money or planning? Make sense? Not really. But what the heck, this is politics, right?

 

For good measure, as noted by The Wall Street Journal, the Japanese and the Olympics are looking to the U.S., including President Biden, to give assurance that the U.S. Olympic team, and therefore, NBC Olympics television money, will be supporting and attending the Games. And given that Japan is a key U.S. ally, it’s highly unlikely that the president would pull the rug out from under Tokyo hosting the Olympics, in particular, by warming up to the Olympics being moved to Orlando.

 

The International Olympic Committee (IOC) apparently isn’t prepared with an alternative plan for putting on the Games this summer. So, the options seem to be to hold the Games in July, or perhaps a slight delay, in Tokyo; officially cancel the 2020 Games; or push them to the other side of the 2022 Winter Olympics.

 

So, while a Disney Olympics in 2020 seem more about political grandstanding than being a serious option, the IOC faces some serious challenges and decisions. 

 

Oh, yeah, and by the way, the 2022 Winter Games are scheduled for a year from now in Beijing, China. That’s right, China. Human rights abuses already are raising questions about those games. Also, I’m pretty sure that Orlando isn’t equipped to host the Winter Games.

 

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Ray Keating is the editor, publisher and economist for DisneyBizJournal.com, and author of the  Pastor Stephen Grant novels and assorted nonfiction books. Have Ray Keating speak your group, business, school, church, or organization. Email him at raykeating@keatingreports.com.

 

The views expressed here are his own – after all, no one else should be held responsible for this stuff, right?

 

Keating’s new book Vatican Shadows: A Pastor Stephen Grant Novel is the 13th thriller/mystery in the Pastor Stephen Grant series. Get the paperback or Kindle edition at Amazon, or signed books at www.raykeatingonline.com. 

 

You also can order his book Behind Enemy Lines: Conservative Communiques from Left-Wing New York  from Amazon or signed books  at RayKeatingOnline.com. His other recent nonfiction book is Free Trade Rocks! 10 Points on International Trade Everyone Should Know. 

 

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Disney’s Deserved “Mulan” Mess, Part II

 by Ray Keating

Commentary

DisneyBizJournal.com

October 16, 2020

 

Disney, no doubt, wants its Mulan mess to go away. But the issue keeps hanging around.

 

And no, I’m not talking about the decision to serve up the movie on Disney+ for an extra premium price of $29.99. Nor am I referring to the fact that the film has received a mere 50% audience score on RottenTomatos.com, for example.

No, I’m talking about the ongoing mess regarding Disney’s filming the movie in China’s Xinjiang region where prison and indoctrination camps intern Uighur Muslims, while in the movie’s credits, Disney also thanked the government entities guilty of the oppression, along with related propaganda agencies pushing lies. (See the previous DisneyBizJournal column on the topic.)

 

Last week, Disney did get around to answering an inquiry from Iain Duncan Smith, a Conservative MP in the United Kingdom, and Baroness Helena Kennedy, a Labour member of the House of Lords, about this situation. The response, signed by Sean Bailey, president of Walt Disney Studios Motion Picture production, was a model of corporate-speak. Bailey managed to serve up a page-and-a-half that didn’t answer any of the issues at hand.

 

For example, Bailey wrote, “Although ‘Mulan’ was filmed almost entirely in New Zealand, in order to accurately depict the unique geography and landscape of China for this period drama, the producers chose to film some scenery in 20 locations throughout the country, including the Kumtag Desert in Xinjiang Province, home to an important passageway along the historic Silk Road. The decision to film in each of these locations was made by the film’s producers in the interest of authenticity, and was in no way dictated or influenced by state or local Chinese officials.”

 

And he later summed up, “It is standard practice across the film industry worldwide to acknowledge in a film’s credits the cooperation, approvals, and assistance provided by various entities and individuals over the course of a film’s production. In this case, the production company Beijing Shadow Times provided our production team with the list of acknowledgements to be included in the credits for Mulan.”

 

To put this in further perspective, Variety reported:

 

The earliest evidence of re-education work in Turpan, the city home to five of the government entities Disney thanked, dates back to 2013. “Mulan” was green-lit in 2015. Early reporting on the camps started to emerge around the summer of 2017. Niki Caro went to Xinjiang in September 2017, posting a photo of sand dunes there to Instagram. The production’s set designer said they spent “months” scouting in the region.

 

During the actual 2018 shoot, China was at the height of its “strike hard” campaign against Xinjiang’s ethnic minority population. Analysts estimate by looking at satellite imagery that there are at least 10 internment camps and five prisons in the other Xinjiang county Disney thanked.

 

How did Iain Duncan Smith respond to the Disney letter? He tweeted: “The reply from @DisneyStudios regarding the filming of #Mulan in #Xinjiang region is very weak and full of platitudes. The reality is that Disney simply does not want to offend China, and have given in to China’s demands and will not stand up to them. Disney's corporate policy does not appear to care about the human rights issues affecting the #Uighurs. It seems human rights come second to the corporate policy of not upsetting China.”

 

That’s hard to argue with, at least in this instance. Variety also noted, “Disney has not issued a formal statement or apology on the matter, and has told creatives involved in ‘Mulan’ to steer clear of the subject.” Yes, Disney apparently is hoping that this would all just go away. I don’t think Walt would be proud.

 

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Ray Keating is the editor, publisher and economist for DisneyBizJournal.com, and author of the Pastor Stephen Grant novels. He can be contacted at  raykeating@keatingreports.com.

 

Also, get the paperback or Kindle edition of Ray Keating’s new book Behind Enemy Lines: Conservative Communiques from Left-Wing New York.

 

Disney’s Deserved “Mulan” Mess

by Ray Keating

Commentary

DisneyBizJournal.com

September 14, 2020

The release of Mulan on Disney+ was supposed to be a major test case – perhaps a potential gamechanger – for the movie industry. So far, it’s turned out to be a mess for Disney, and deservedly so.

The reported $200-million production budget for Mulan made its release on Disney+, rather than in theaters, a big decision. And then there was the experiment of charging an additional premium price ($29.99) to view it on Disney+, which subscribers already pay for. 

What could be learned from all of this? There’s actually little about the business model for movie releases, and more about the do’s and don’ts when making movies.

The clearest takeaway might be: It’s dangerous for a U.S. business to get into bed with the Chinese communist government.

Also, when filming a movie in China, perhaps don’t do it in the Xinjiang region where prison and indoctrination camps intern Uighur Muslims. For good measure, in the movie’s credits, don’t thank the government entities guilty of the oppression – such as the Turpan Public Security Bureau – and the propaganda agencies pushing lies and covering up.

For good measure, perhaps the movie’s star, Liu Yifei (Mulan), should have refrained from supporting the Hong Kong police for cracking down on pro-democracy protestors last year. And the same goes for another actor in the film, Donnie Yen (Commander Tung), who subsequently did the same thing.

And it’s not a good idea to distort history in order to – intentionally or not? – pander to the Chinese communists’ nationalistic impulses. Writing in Foreign Policy, Jeanette Ng points out:

But the rotten heart of Mulan as a film, rather than its production process, is the accidental regurgitation of China’s current nationalist myths as part of a messy, confused, and boring film. The title card fades into a location said to be the “Silk Road, Northwest China.” This is, of course, Xinjiang—here set up by the narrative frame as an inalienable part of China that Mulan must defend for her father, her family, and her emperor. That’s not the historical reality—or even the reality of the original poem the stories are based on, which depicts Mulan as the servant of a khan of the Northern Wei dynasty, not an all-powerful Chinese emperor.

On September 10, CNBC reported, “Chinese authorities have told major media outlets not to cover Walt Disney’s release of ‘Mulan’, in an order issued after controversy erupted overseas over the film’s links with the Xinjiang region… No reason was given in the notice, but the sources said they believed it was because of the overseas backlash over the film’s links to Xinjiang.” And according to The New York Times, the box office for Mulan in China was underwhelming during its opening weekend, with “a tepid $23 million” that came up short of expectations and other recent major releases, such as Tenet’s $29.6 million opening and The Eight Hundred, a Chinese war epic, registering $75.7 million during its opening weekend.

In the U.S., lawmakers on both sides of the political aisle are displeased, and demanding more information from Disney and CEO Bob Chapek. Reuters, for example, reported: 

A group of bipartisan U.S. lawmakers urged Walt Disney Co CEO Bob Chapek to explain the company's connection with “security and propaganda” authorities of China's Xinjiang region during the production of live-action war epic “Mulan”. “Disney's apparent cooperation with officials of the People's Republic of China (PRC) who are most responsible for committing atrocities - or for covering up those crimes - is profoundly disturbing,” the Republican senators and representatives wrote in Friday's letter. It urged Disney to make a detailed explanation. The letter was retweeted by the Congressional-Executive Commission on China (CECC), which monitors human rights and the rule of law and submits an annual report to President Donald Trump and Congress.

The lawmakers’ letter also said: 

Publicly available information prior to the filming of Mulan showed the existence of mass internment camps for the detention of Uyghurs. By July 1, 2018, major news outlets in the United States, Australia, United Kingdom, and Hong Kong all had reported that Beijing had interned hundreds of thousands, if not more than one million, Uyghurs and minorities in the XUAR. The decision to film parts of Mulan in the XUAR, in cooperation with local security and propaganda elements, offers tacit legitimacy to these perpetrators of crimes that may warrant the designation of genocide…”

The Walt Disney Company’s website states, “We believe social responsibility is a long-term investment that serves to strengthen our operations and competitiveness in the marketplace, enhance risk management, attract and engage talented employees, and maintain our reputation.” We seek to fully understand how you implement this commitment in the activities you undertake in China. 

Hmmm, that last point warrants some added attention. In October of last year, when asked about the Hong Kong protests, then-CEO Bob Iger said, “What we learned in the last week – we’ve learned how complicated this is. The biggest learning from that is that caution is imperative. To take a position that could harm our company in some form would be a big mistake. I just don’t believe it’s something we should engage in in a public manner.” Of course, there have been other issues that Iger and Disney have been more than willing to engage on publicly. And what they miss, or choose to ignore, is that if you go into business with a communist government (as Disney has with its Shanghai and Hong Kong theme parks) - indeed, any government - politics are bound to come into play. And it might get uncomfortable – very uncomfortable.

Finally, according to Vanity Fair, Disney CFO Christine McCarthy told the Bank of America Virtual 2020 Media, Communications & Entertainment Conference that the controversy over the credits in Mulan has “generated a lot of issues for us.”

Aw, poor Disney executives. The “issues” they face, though, aren’t nearly as dire as the “issues” faced by pro-democracy protestors in Hong Kong, nor by the Uighur Muslims imprisoned in the Xinjiang region of China, nor by so many others suffering at the hands of the Chinese government led by President Xi Jinping, who seems intent on becoming the next Chairman Mao.

Perhaps the Disney brass needs to be reminded of a couple of things that Walt Disney himself declared…

“I believe that this spiritual and intellectual freedom which we Americans enjoy is our greatest cultural blessing. Therefore, it seems to me, that the first duty of culture is to defend freedom and resist all tyranny.”

“Tomorrow will be better as long as America keeps alive the ideals of freedom and a better life.”

Listen to Walt – those seem to be some pretty sound guiding principles.

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Ray Keating is the editor, publisher and economist for DisneyBizJournal.com, and author of the Pastor Stephen Grant novels. He can be contacted at  raykeating@keatingreports.com.

Also, get the paperback or Kindle edition of Ray Keating’s new book Behind Enemy Lines: Conservative Communiques from Left-Wing New York.

From King of Disney Streaming to TikTok Troubles: The Strange Journey of Kevin Mayer

by Ray Keating

Analysis

DisneyBizJournal.com

August 3, 2020

It’s been a wild eight-plus months for Kevin Mayer, the former head of Disney’s streaming business.

In November of last year, Disney+ launched to great acclaim, and subscriber numbers ran far ahead of expectations. The new streaming service and Hulu were under the leadership of Mayer at the Walt Disney Company. He was riding high, and most watchers expected him to be named Bob Iger’s successor to run the entire House of Mouse empire.

However, Iger and Disney surprised just about everyone in February, when Iger announced he was stepping down immediately as CEO, and Bob Chapek – not Mayer – was named to run the Walt Disney Company.

About three months later, on May 18, Mayer announced that he was resigning from Disney to take the job of CEO of TikTok, the app for easily making and sharing short videos, as well as chief operating officer of the app’s parent company, ByteDance, a Beijing-based company.

It’s not unusual for a key executive passed over for the C-Suite to leave for another position. But Mayer had one of the best streaming jobs at the top entertainment company on the planet. And while TikTok had gained enormous popularity – though largely among teens – there were questions about the company. And those questions have only multiplied since Mayer became CEO at the app.

The combination of TikTok’s wild popularity and the fact that it is a Chinese company, with potential exposure to informational demands and controls by the Chinese communist government, makes for an uncertain future, to say the least. The U.S. federal government has national security concerns, and has unleashed attacks on TikTok, with President Trump threatening to shut it down in the U.S. The Indian government already has banned TikTok in that country. 

Clearly, TikTok was hoping that hiring Mayer, as an American CEO, would help, along with Mayer’s U.S.-China experience given the fact that Disney is deeply involved in China, with parks in Shanghai and Hong Kong. 

In fact, the ByteDance founder, Zhang Yiming, took certain structural precautions with his company hoping to avoid political woes. The New York Times reported:

He made TikTok unavailable in China so the video app’s users wouldn’t be subject to the Communist Party’s censorship requirements. He stored user data in Virginia and Singapore. He hired managers in the United States to run the app and lobbyists in Washington to fight for it on Capitol Hill. None of that counted for much in the end.

In the U.S., the politics have swung between Trump threatening to close the app down to the president being open to Microsoft buying the U.S. business of TikTok. And in a still more bizarre and unprecedented twist, President Trump wants the U.S. Treasury to receive “a lot of money” for “making it possible for this deal to happen.” 

According to The Wall Street Journal, Microsoft not only is interested in TikTok’s U.S. business, but talks also are covering the app’s business in Canada, Australia and New Zealand. September 15 stands as the target date, for now, to get a deal done. Microsoft apparently is enticed by the idea of expanding its business to young consumers, given the company’s success in recent years with corporate customers.

Whether a Microsoft deal gets done or not, either outcome presents further uncertainty for Mayer. If Microsoft purchases this chunk of TikTok, one would think that Mayer would go with the U.S. part of the business. And then one has to wonder if Microsoft would want to keep Mayer in the top spot at the U.S. version of TikTok. If so, he would suddenly be back running one part of a larger business. If the Microsoft deal doesn’t materialize and the app gets shutdown in the U.S., what value would Mayer then bring to TikTok?

So, many questions and unknowns loom for a guy who, just a few months ago, was one of the top players in online streaming. Indeed, Mayer has gone from the heights of playing a key role at one of the world’s top brands – Disney – to now slogging around in the muck of political controversy in the U.S., China and India. You have to wonder if Mayer is wondering.

In the end, Kevin Mayer might still emerge from this seeming mess sitting pretty – perhaps leading a Microsoft effort to compete with Facebook. But right now, it seems that leaving the leading streaming gig at Disney might not have been the best choice for Mr. Mayer.

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Ray Keating is the editor, publisher and economist for DisneyBizJournal.com, and author of the Pastor Stephen Grant novels. He can be contacted at  raykeating@keatingreports.com.

Also, get the paperback or Kindle edition of Ray Keating’s new book Behind Enemy Lines: Conservative Communiques from Left-Wing New York.

Disney and Its Brand Face Increasing Uncertainty in China

by Ray Keating

Analysis

DisneyBizJournal.com

June 3, 2020

In recent decades, seemingly countless U.S. businesses have done balancing acts when it comes to decisions about doing business in China. But few U.S. companies have gone in on China to the extent as has The Walt Disney Company. And the uncertainties regarding this choice are mounting.

American businesses have had to weigh considerable risks and uncertainties of dealing with the communist regime in Beijing that has a grim history in terms of gross human rights abuses, including state-committed murder on a vast scale (see the Tiananmen Square massacre, for example), other wide-ranging forms of oppression, lying, and deception, along with violations of property rights. 

The hope – shared by many policymakers and economists – has been that engaging with China as it partially opened parts of its economy to international markets would benefit the Chinese people. And as economic growth raises living standards, pressure would mount on the regime for increased political freedoms. 

That would require China to follow the path of political opening experienced in places like Taiwan and South Korea. But while many in the media fail to recognize the differences between authoritarian and totalitarian regimes, differences in fact do exist. Authoritarianism is about one person or party having political control, while totalitarianism is about one person or party having control over all aspects of life – private and public. Taiwan and South Korea were authoritarian, while China is totalitarian. The hope has been that China would react to pressure for greater political freedom as did Taiwan and South Korea, but it has been only a hope. Indeed, it has very much been an open question if totalitarian communists would react positively.

The latest signals point to the Chinese communists acting as the totalitarian oppressors they are, especially under President Ji Xinping. Beijing recently violated the “one country, two systems” agreement (achieved when the British handed Hong Kong back to China in 1997) by imposing “national security” laws on Hong Kong. The clear intent was to crush dissent, free speech, and gut Hong Kong’s self-governance, which was supposed to last until 2047. 

For good measure, China has stepped up its provocations directed at Taiwan. And then there’s China’s lying and deception regarding the coronavirus outbreak. (See my  recent Keating Files column on these points).

All of this obviously raises additional questions about doing business in China, including how other countries might change governmental policies directed at China.

Disney is uniquely exposed to these China uncertainties. After all, Disney isn’t just another Hollywood studio with an eye on potential box office numbers from China’s substantial middle-income earners. Disney entered into partnerships with the government on two theme parks.

In 1999, Disney entered into an agreement with the Hong Kong government to open, under joint ownership, Hong Kong Disneyland. At the time, the Michael Eisner-led Disney was seen as cutting an amazingly lucrative deal with Hong Kong. The park opened in 2005. Disney owns 47 percent of the park, and the Hong Kong government 53 percent (originally, it was 57 percent Hong Kong and 43 percent Disney). Disney handles all of the operations. But if things continue in the dire direction that they have been pointed in recently, Disney will be de facto in partnership with the communists in Beijing.

But that would not be new for Disney. After roughly a decade of negotiating, it was announced in November 2009 that Shanghai Disney was approved. Ground was broken in April 2011, and the Shanghai Disney Resort – brought to fruition under CEO Bob Iger – opened in June 2016. The resort is 43 percent owned by Disney, and 57 percent by the Chinese government. And the company operating the park is 70 percent owned by Disney and 30 percent by the Chinese government.

Being in a partnership with the Chinese communist regime is a unique situation to say the least, particularly for a company whose brand – which Disney normally is hyper-defensive about guarding – is overwhelmingly about family fun, wholesomeness and togetherness. That doesn’t exactly line up with the reputation of the Chinese communist government, with recent actions providing grim, stark reminders to people around the world.

As for Disney’s business, Shanghai Disney had 11.8 million guests in 2018, and Hong Kong Disneyland had a record 6.7 million visitors in 2018. Prior to the pandemic, Hong Kong attendance had suffered due to the pro-democracy protests, with The Wall Street Journal calling Hong Kong Disneyland a “ghost town.”

Again, more than most U.S. firms, Disney made a big bet on China continuing to move in positive directions in terms of expanding economic and political freedoms. That bet is in jeopardy more so than at any other point since the House of Mouse invested in the Hong Kong and Shanghai parks. It remains to be seen if the situation grows even more troubling or veers in a more positive direction – for the Chinese people and for Disney.

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See related...

“Disney’s China Woes”

“At a Turning Point with China?” by Ray Keating at KeatingFiles.com

“China Moves to Crush Dissent and Freedom in Hong Kong – Relevant Excerpts from ‘Deep Rough’ and ‘The Traitor’” by Ray Keating at KeatingFiles.com

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“PRESS CLUB C Podcast with Ray Keating – Episode #10: Streaming Fueling the Nerd, Including the Disney Nerd”

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“Theme Parks: Pandemic, Disney and the Little Guys”

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Ray Keating is the editor, publisher and economist for DisneyBizJournal.com, and author of The Disney Planner 2020: The TO DO List Solution (now available at a deep discount) and the Pastor Stephen Grant novels. He can be contacted at  raykeating@keatingreports.com.

Get the paperback or Kindle edition of Ray Keating’s new book Behind Enemy Lines: Conservative Communiques from Left-Wing New York.

Disney and the Economy: Downside Concerns

by Ray Keating

News/Analysis

DisneyBizJournal.com

January 31, 2020

The Walt Disney Company cuts across industries, covering retail, travel, theme parks, movies, television, online streaming, and more, not to mention being a global enterprise. So, this diversified company can seize on assorted opportunities and benefits when U.S. and global growth are strong. And while Disney also has considerable exposure to economic woes and uncertainties, industry and regional diversification can aid the firm in weathering economic storms.

Right now, the risks for a company like Disney tilt to the downside. Consider some key issues, facts and trends.

• U.S. Growth. Contrary to claims from a variety of talking heads on television and in politics, the U.S. economy remains a mixed bag. For example, while the U.S. labor market is tight, economic growth has slowed. Fourth quarter 2019 real GDP (just reported on January 30) grew by 2.1 percent (annualized rate). That replicated the 2.1 percent growth in the third quarter, and wasn’t substantively different from the 2.0 percent rate in the second quarter. Consider that the post-World-War-II U.S. growth rate averaged 3.2 percent (and better than 4 percent during non-recession periods). Particularly troubling for the U.S. is that business investment has declined for three straight quarters now, which not only negatively affects current growth, but future growth as well.

• Trade Troubles. The anti-free-trade policies of the Trump administration have been a key negative for the U.S. economy. U.S. real export growth was non-existent (0 percent) in 2019, while imports barely edged forward (1.0 percent). As I noted in another analysis on trade policymaking, “The result has been that trade has shaved a significant 0.5-to-0.7 percentage points off of average overall real U.S. economic growth – if not more when you factor in the reach of trade across sectors, including the role that the trade war has played in the recent decline in business investment.”

• Consumer Slowing. Given the ills on the business investment and trade fronts, the consumer has been the key source for growth in the U.S. recently. However, real personal consumption expenditures growth slowed in the fourth quarter, from 4.6 percent in the second quarter 2019 to 3.2 percent in the third quarter and 1.8 percent in the fourth. 

Also, after a lengthy stretch of strong growth, real per capita disposable income moved down slightly during the last three months of 2019. Real per capita disposable income – which is personal income minus personal current taxes, adjusted for population and inflation – is important to watch because this measures the dollars that individuals have for investing, saving and consuming.

• China. China’s troubles continue to mount regarding the outbreak of the coronavirus, with deaths now reportedly topping 200 and those sick nearing 10,000 (as of early afternoon EST on Friday, January 31). 

• Europe. The Wall Street Journal noted on January 31 that growth slowed notably in the eurozone, with growth the slowest since 2013. Also, it was reported that economists aren’t expecting a pick-up in eurozone growth in 2020.

• Politics. Political risk and uncertainty promise to mount as a volatile U.S. presidential race, along with House and Senate contests, roll along during 2020.

So, economic concerns cut across the U.S., Europe and China, which are the major markets for Disney.

Against these concerns, it also must be noted that the only portion of the economy’s investment numbers showing consistent, strong growth has been in intellectual property products, that is, investment in software, research and development, and entertainment, literary, and artistic originals. That’s obviously a big area for Disney. 

And all indicators regarding Disney itself continue to point to investment growth in parks, cruise ships, streaming content, movies, and so on. Of course, though, short-term economic changes affect immediate investment and operational decisions, but Disney is a company poised to stay focused on long-term investments, opportunities and profitability.

Ray Keating is the editor, publisher and economist for DisneyBizJournal.com, and author of The Disney Planner 2020: The TO DO List Solution and the Pastor Stephen Grant novels. He can be contacted at  raykeating@keatingreports.com.

Disney’s China Woes

by Ray Keating

News/Analysis

DisneyBizJournal.com

January 27, 2020

The Walt Disney Company announced that it was temporarily closing their Shanghai and Hong Kong resorts due to the risks tied to the coronavirus.

Regarding Shanghai, Disney, in part, stated: “Shanghai Disney Resort will assist in the refund for guests who have purchased tickets for admission to Shanghai Disneyland, have booked a resort hotel, or have booked tickets for Beauty and the Beast Mandarin Production through the original ticket purchase channel.”

And as for Hong Kong, the company stated: “As a precautionary measure in line with prevention efforts taking place across Hong Kong, we are temporarily closing Hong Kong Disneyland Park starting from January 26, 2020 out of consideration for the health and safety of our Guests and Cast Members. The Hong Kong Disneyland Resort hotels will remain open... The Standard Park Ticket is valid for six months from the purchase date. If needed, Hong Kong Disneyland Resort will assist in the refund for Guests who have purchased tickets for admission to Hong Kong Disneyland park or have booked a resort hotel.”

As of 1:00 PM EST on January 27, CNN reported that the death toll from the virus had reached 82 on mainland China, with 2,700 cases were confirmed. It was noted, “Nearly 60 million people have been affected by partial or full lockdowns in Chinese cities as the country's government steps up its response.” In addition, there were more than 50 cases confirmed outside of China, including at least five in the U.S.

This first and foremost is a human tragedy, and the primary emphasis should be in getting this under control, and aiding and praying for those suffering and at risk.

As for the business side of this, just before 1:00 PM EST on January 27, Disney’s stock price was down by better than 3 percent.

Disney, which owns 47 percent of Hong Kong Disneyland and 43 percent of the Shanghai Disney Resort, has faced a series of challenges related to China recently, namely, the Hong Kong protests, a China economic slowdown, the U.S. and China trade war, and now the coronavirus (along with controversies and accusations about his this has been handled). And this virus breakout comes at a time when Disney was looking to capitalize on the Lunar New Year holiday.

Now, while serious (and gravely so with the virus), these measures should be short term in nature. Another longer run potential issue for Disney is the increased, Maoist-style crackdowns on assorted aspects of life being orchestrated by President Xi Jinping. Xi has centralized power like no other Chinese leader since, arguably, Chairman Mao. No one knows how the Ji effort might play out, but it certainly raises questions, risks and uncertainties for the Chinese people, the country’s neighbors (including Taiwan), and for those doing business in China, like Disney.

Ray Keating is the editor, publisher and economist for DisneyBizJournal.com, and author of The Disney Planner 2020: The TO DO List Solution and the Pastor Stephen Grant novels. He can be contacted at  raykeating@keatingreports.com.