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According to Disney CEO Bob Iger via yesterday’s earnings report, the Company will soon reinstate investor dividend payments, which it had previously suspended due to the Covid-19 pandemic.
Credit: Disney
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Deadline reported that the dividend payouts primarily benefited the Walt Disney Company’s numerous retail shareholders and were abruptly paused in the wake of the global pandemic to consolidate funds after the shutdown forced Disney Parks & Resorts to halt operation for various periods of a few months to multiple years. In fact, as Disney stated in May in the first half of the fiscal year 2020, “given the significant operational and financial disruption caused by Covid-19,” it would forgo paying this semi-annual cash dividend to converse resources during the trying time, preserving approximately $1.6 billion.
Now, things are looking up for the Walt Disney Company as it enters its 100th year, a feat it celebrates through the Disney100 marketing program and its 100 Years of Wonder Celebration at the Disneyland Resort and Walt Disney World, as well as other Disney theme parks worldwide. Indeed, Iger announced a $23.51 billion total Company net income yesterday for his first quarter as reinstated CEO following the hard times of his ousted predecessor Bob Chapek, with $2.1 billion of that stemming from its theme park division.
Credit: NPR
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As a result, the CEO has officially requested to resume making dividend payments by the end of the 2023 calendar year, which Iger notes will initially be “modest,” with observed increases as it builds over time. Moreover, the decision occurs because the business has largely moved past the pandemic hurdles which necessitated the dividend hiatus in the first place.
Credit: Disney
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Plus, Iger added during the call yesterday:
When it comes to investing in growth and returning capital to shareholders, we will take a balanced and disciplined approach as we did throughout my previous tenure as CEO, when we invested in our core businesses and acquired new ones, bought back stock and paid a dividend to our shareholders.
Even so, this return to stability comes at a price — specifically, $5.5 billion in cost-cutting measures, according to Iger. While he claims these financial goals will not raise prices for Guests, it will result in the previously announced hiring freeze and more layoffs for around 7,000 Cast Members, some of which are currently petitioning Disney for a living wage within a period of economic crisis. Hopefully, the Disney Company dividend announcement truly hints at better times for all its employees moving forward.
