Disney’s theme parks reveal shrunken treasure

On the one hand, spending money on a stable part of the business makes sense. On the other, Disney’s dwindling cash and the increasing demands for it is cause for concern.

The $150 billion company disclosed the new capital expenditures on Tuesday in an investor presentation, in which Iger described the parks as a “tremendous business.” Nevertheless, the stock price fell 4%. One issue is that Disney’s free cash flow has plummeted. In the fiscal year ending in September 2022, it generated $1 billion, a 90% decline from 2018, the year before the $71 billion acquisition of Fox’s entertainment assets.

Disney is mulling a sale of its broadcast division, but more immediately Iger also has promised to reinstate the dividend and wants to buy the rest of Hulu from Comcast All the while, the Disney+ streaming service has required big slugs of cash. No wonder adding theme parks to the list is making shareholders skittish.