S&P Global Ratings is predicting that Disney’s financial struggles are going to affect the company for quite some time and recently downgraded their credit rating. S&P suggests it’ll take Disney Parks longer to recover than the global economy.
Credit: Getty Via: The Hollywood Reporter
What’s happening:
- With their parks and resorts closed and film slate shuffled around, Disney keeps taking the hits as S&P Global Ratings has downgraded Disney’s overall score.
- While Disney is still in good standings overall, the current pandemic has affected their credit rating which has been lowered from an A to an A-minus.
- The Hollywood Reporter writes that S&P Global Ratings has a less than positive outlook on Disney’s situation and ability to bounce back quickly, noting that S&P expects it’ll take longer for Disney parks to recover than the overall global economy.
- All six of Disney’s international resorts are currently closed with the domestic parks being the last to shut down on March 14th. Shanghai Disneyland was the first park to close in late January as much of China went on lockdown.
- An additional projection by S&P suggests Disney’s debt load will “climb to a leverage ratio of 3X over the next two years.” S&P believes they won’t see a decline in that ratio until fiscal year 2022.
What they’re saying:
- S&P Global Ratings: "Continued government-imposed social distancing and, longer term, consumer concerns about attending public events will likely retard theme park attendance."
- S&P Global Ratings on Disney’s rebound: "Disney's theme parks won't likely return to normal capacity utilization at the same rate as the overall economy even after stay-at-home restrictions are eased and the theme parks are allowed to reopen.”