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The Walt Disney Company Hosts Q2 2023 Earnings Call Covering Parks, Streaming, and Florida Gov. DeSantis

The Walt Disney Company - Burbank

The Walt Disney Company (TWDC) reported earnings for its second quarter ended April 1, 2023 during an investor call on May 10, which covered Disney Parks & Experiences including streaming, and the Florida feud with Gov. Ron DeSantis.

Disney Parks

Disney Parks, Experiences, and Products generated the bulk of TWDC profits, and about a third of total revenue last quarter with a noteworthy bump coming from the international parks.

Total sales at the divison jumped 17% to $7.8 billion, and operating income rose 23% to $2.2 billion.

Disneyland and Walt Disney World saw sales rise 14% to $5.6 billion for the quarter ended April 1, with operating income up 10% at $1.5 billion.

“Results at our domestic parks and resorts were slightly unfavorable to the prior-year quarter, as a decrease at Walt Disney World Resort was largely offset by growth at Disneyland Resort,” said The Walt Disney Company CFO Christine McCarthy. “The decrease at Walt Disney World Resort was due to higher costs, partially offset by increased volumes. Higher costs reflected cost inflation, increased expenses associated with new guest offerings and higher depreciation.”

“We do expect a really solid year overall for our domestic parks,” McCarthy also said. “That being said, we also expect increased costs.”

Part of those increased costs are due in part to paying higher living wages to Walt Disney World cast members under a new union contract.

Internationally, the parks brought in $156 million in operating income from a $268-million loss the year earlier, and revenue more than doubled to $1.2 billion from $574 million.

This is largely due to the fact that 2022 saw several COVID-related closures at the Asian parks, notably Shanghai and Hong Kong. More operating days in 2023 means higher attendance and income from everything from tickets to merchandise.

Disneyland Paris also had higher attendance due to the park’s 30th anniversary, and increased guest spending.

30th Anniversary Celebration at Disneyland Paris


Financials for Disney+ were a mixed bag in this second quarter 2023 report.

Disney says the streaming service lost 4 million subscribers worldwide in the first three months of 2023, with the biggest loss coming from Disney+ Hotstar, the version of the service offered in India and parts of Southeast Asia, whose base shrunk by 8%.

However The Walt Disney Company reduced losses in its streaming business by 26% as the company’s overall results matched Wall Street expectations.

By comparison, Hulu, which recently celebrated its 15th anniversary, gained 200,000 in the quarter to stand at 48.2 million, and ESPN+ increased by 400,000 to 25.3 million.

Hulu and Disney+ and ESPN+

TWDC CEO Bob Iger said that Disney intends to raise the price of the regular ad-free Disney+ tier (currently $10.99/month on a standalone basis) and moderately increase the price of the ad-supported plan (which is $7.99/month), but gave no timetable as to when this will happen.

Iger also said The Walt Disney Company will soon launch a “one-app experience” in the U.S. that incorporates Hulu content into Disney+. The company will begin to roll out the new app by the end of the 2023 calendar year. For now, this option will only be available to consumers who have subscribed to both services.

“While we will continue to offer Disney+, Hulu and ESPN+ as standalone options, this is a logical progression of our offerings that will provide greater opportunities for advertisers while giving bundle subscribers access to more robust and streamlined content, resulting in greater audience engagement and ultimately leading to a more unified streaming experience,” Iger said.

The Walt Disney Company’s announcement to more tightly weave Hulu into Disney+ seems to hint that Disney intends to retain its ownership of Hulu, in which Comcast holds a 33% stake.

Starting in January 2024, Comcast can use its put option to require Disney to buy its stake, or Disney can use its buy option to force Comcast to sell its stake.


Also on the earnings call, CFO Christine McCarthy said Disney intends to produce lower volumes of content for streaming content.

The company will also be removing certain content from its streaming services as it looks to improve profitability.

“We are in the process of reviewing the content on our DTC (direct-to-consumer) services to align with the strategic changes in our approach to content curation,” said CFO Christine McCarthy

Disney expects to take a write-down in its fiscal Q3 of $1.5 billion-$1.8 billion from removing the content, McCarthy said.

While she didn’t specify any programming, Disney+ has recently cancelled several series including “Willow” and “National Treasure: Edge of History” after their first seasons, along with “Big Shot” and “Mighty Ducks: Game Changers” after two seasons each.

Iger also touched on the subject during the call, saying, “When you make a lot of content, everything needs to be marketed. You’re spending a lot of money marketing things that are not going to have an impact on the bottom line, except negatively due to the marketing costs.”

He explained it was “part of the maturation process as we grow into a busines that we had never been in. We are learning a lot more about it. Specifically, we are learning a lot more about how our content behaves on the service and what customers want.”

Disney CEO Bob Iger

Florida Feud

Iger, who was recently named one of 2023’s “Time 100,” also took the opportunity during The Walt Disney Company earnings call to talk about the current battle with Florida Governor Ron DeSantis, which was brought up as a result of a shareholder asking about Disney’s parks in Florida.

“Regarding Florida, I have a few things I want to say about that bill,” Iger said. “First of all, the case that we filed last month made our position and the facts very clear. This is about one thing and one thing only, and that’s retaliating against us for taking a position about pending legislation. And we believe that in us taking that position, we are merely exercising our right to free speech. Also, this is not about special privileges, or a level playing field, or Disney in any way using its leverage around the state of Florida.”

“But since there’s been a lot said about special districts and the arrangement that we had, I want to set the record straight on that, too. There are about 2,000 special districts in Florida, and most were established to foster investment in development. We were one of them. It basically made it easier for us, and others by the way, to do business in Florida.”

“And we built a business that employs, as we’ve said before, over 75,000 people and attracts tens of millions of people to the state. So while it’s easy to say that the Reedy Creek special district, which was established for us over 50 years ago, benefited us, it’s misleading to not also consider how much Disney benefited the state of Florida.”

“And we’re not the only company operating a special district. I mentioned the Daytona Speedway has one, so does a prominent retirement community The Villages, and there are countless others. So if the goal here is leveling the playing field and the uniform application of the law, government oversight of special districts needs to occur, or be applied, to all special districts.”

“There’s also a false narrative that we’ve been fighting to protect tax breaks. But in fact, we’re the largest taxpayer in Central Florida, paying over $1 billion in state and local taxes last year alone. We pay more taxes, specifically more real estate taxes, as a result of that special district, and we all know there was no concerted effort to do anything to dismantle what was once called Reedy Creek special district until we spoke out on the legislation. So this is plainly a matter of retaliation, while the rest of the Florida special districts continue operating basically as they were.”

“I think it’s also important for us to say our primary goal has always been to be able to continue to do exactly what we’ve been doing there, which is investing in Florida. We’re proud of the tourism industry that we created and we want to continue delivering the best possible experience for guests going forward.

“We never wanted, and we certainly never expected, to be in the position of having to defend our business interests in federal court, particularly having such a terrific relationship with the state as we’ve had for more than 50 years. And as I mentioned on our shareholder call, we have a huge opportunity to continue to invest in Florida. I noted that our plans are to invest $17 billion over the next 10 years, which is what the state should want us to do.”

“We operate responsibly. We pay our fair share of taxes. We employ thousands of people and, by the way, we pay them substantially above the minimum wage dictated by the state of Florida. We also provide them with great benefits and free education.”

“So I’m going to finish what is obviously kind of a long answer by asking one question: Does the state want us to invest more, employ more people, and pay more taxes…or not?”

Partners statue at Walt Disney World

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