Disney’s UK subsidiary needs some fairy dust. The London-based outpost of the House of Mouse – The Walt Disney Company Limited – has reported a loss of almost $300 million for the fiscal year ended October 2, 2021.
The figure is a significant decrease from the year-earlier financial statements (for the year ended October 2020), which reported adjusted income of $291 million.
The figure comes from the company’s financial report filed with the UK register of companies House on Thursday. The report represents the first full fiscal year that Disney+ (the streaming service launched in March 2020) has been operational and the first full year impacted by the COVID-19 pandemic.
According to the report, which was signed by EMEA manager Sarah Williams, the £244.5 million ($292.7 million) loss was due to “impairment of investments” and an increase in development costs for Disney+ and theatrical content. Williams pointed out that revenue for the latter “will come in for years to come.”
According to the report, the company took a $270 million impairment on “eleven holdings,” though it didn’t appear to specify which investments were involved. This was due to restructuring and “less than satisfactory performance by certain subsidiaries”, although again the report did not specify which subsidiaries were involved.
The report also pointed out that due to the pandemic, its live shows such as The Lion King at the Lyceum Theater in London have been significantly affected, as has Shanghai Disneyland, which the report suffered from “extensive disruption to park operations”. due to COVID-related closures.
On a more positive note, gross revenues increased to $3.1 billion from $2.7 billion, “due to the success of Disney+” and the rebound in revenue from character merch than the Pandemic restrictions lifted.
Media and entertainment distribution — which includes Disney+ — accounted for about $2.5 billion of those gross sales, while Disney parks made up the remainder at $539 million.
The financial report also set out risks and uncertainties facing the company, including but not limited to the ongoing impact of the pandemic, as well as broader global economic and political conditions, intellectual property rights status, Brexit and “changes in the public”. and consumer tastes and preferences and competitive landscape.”
“The success of our business depends on our ability to consistently distribute filmed entertainment, television programs, online material, electronic games and consumer products that meet the changing tastes of our broader consumer market,” the report warns. “We face significant competition in each of our businesses from alternative suppliers of the products and services we offer, as well as from other forms of entertainment.”
