Disney is in a precarious position. A company once known for making magical experiences is now facing stiff headwinds at many fronts. Despite having a multi-billion dollar market cap, Disney surprisingly only has around $200 million (page 5) in liquidity based on its latest balance sheets. It begs the question, what the hell happened?

The answer is rather multi-faceted and if I were to explain in fine detail, this post would become a novel. Even though it's complex, there is one common theme throughout: Disney shooting itself in the foot.

Box Office Flops

Almost every movie Disney has released in recent memory has lost money. While it has gotten a few wins like Encanto and Guardians of the Galaxy 3 here and there, it's 1 step forward and 10 steps back. Not only have most of Disney's recent films lost money, they lost a lot of money:

• Mulan (2020) - $157 million

• Jungle Cruise - $151 million (supposedly)

• Turning Red - $167 million

• Lightyear - $106 million

• Strange World - $197 million

• Ant-Man and the Wasp - Quantumania - $125 million (maybe)

The recent The Little Mermaid live action is projected to lose somewhere between $20 to $100 million; the upcoming Elemental is projected to earn only $38 million on opening weekend; and the upcoming Indiana Jones and the Dial of Destiny had tepid reception at Cannes and will likely lose money (a $70 million projected domestic opening weekend versus a $295 million budget). The Marvels has been delayed multiple times with several re-shoots, and somehow the visual effects still look subpar. And when taking TV shows into account, She-Hulk and Willow also did poorly. In fact, the latter did so badly that Disney found it more valuable off of Disney+ as a tax write-off.

And it wasn't like these movies were good either. Most of them tend to follow the tired old fad of making female characters OP without the proper development while the male characters act dumb and rude even if it makes little sense. It's quite ironic since Disney had a successful IP that featured a strong female protagonist that it could have used as a reference, but didn't: Kim Possible. Disney also has a bad habit of using identities as crutches and not have them meaningfully contribute to the plot. This led to Lightyear and Willow's downfalls.

Park Woes

Disneyland and Disneyworld have always been the biggest moneymakers for Disney. However, even here, the company is beginning to falter in this department. It made big headlines for the wrong reasons when it announced the $1+ billion Galactic Starcruiser hotel will shut down after only a year. To describe this as dousing a pile of cash with gasoline and lighting it on fire is a massive understatement.

Additionally, Disney is offering summer tickets at unheard of low prices. The 4-park summer ticket goes for a rate for $99/day with Florida residents enjoying a reduced $58/day rate. You would see these rates during the off-season, i.e. when children and college students are still in school. For reference, at the same time last year, tickets would go at a rate of $170/day. And in spite of the reduced prices, Disney has been struggling to fill its parks up.

Universal + Nintendo = Stiff Competition

As Disney falters, Universal has been taking full advantage of the massive opening. In 2022, DreamWorks produced two big hits, The Bad Guys and Puss in Boots: The Last Wish. The former grossed over $250 million on a $80 budget whereas The Last Wish grossed nearly $500 million on a $90 million budget. Illumination and Nintendo's The Super Mario Bros. movie adaptation easily grossed over $1 billion on just a $100 million budget.

These movies follow a simple, but effective formula: make good characters and make a good story. Princess Peach is depicted as a strong female character, but the movie also respects Mario and emphasizes that its his movie. The Last Wish is surprisingly a masterpiece as it effectively juggled three different villain archetypes and balanced the humor and serious overtones.

What's crazier is that Universal can take away even more from Disney's animated film pie. There are rumors that a Zelda movie is in the works because the Mario movie did so well. Considering how it only took a few days for Tears of the Kingdom to sell over 10 million copies, a Zelda movie may perform really well in the box office provided that it's good. It also means that a theoretical "Nintendo Cinematic Universe" may be extremely lucrative. Nintendo has many other IPs like Splatoon and Metroid that are very popular and can possibly make it to the big screen.

This also plays into the Universal Studios parks. The recently opened Super Nintendo World in Universal Hollywood proved to be popular and it will eventually come to Orlando as part of the Epic Universe in 2025 (and there will also be a How to Train Your Dragon park). Combine that with the already existing Harry Potter park, Universal Studios will have quite a diverse lineup.

Disney Can Turn Things Around, But...

While it's possible for Disney to reverse course, there are a lot of factors that get in its way. Currently, Disney is embroiled in a legal battle against the state of Florida regarding Reedy Creek. The Reedy Creek Improvement District (RCID) has been replaced by the Central Florida Tourism Oversight District (CFTOD) though Disney is still fighting to retain control and the ruling on the case is pending.

Disney also has a big Hulu problem. Right now, Disney holds 2/3 stake while Comcast holds the remainder. However, Comcast wants Disney to buy out the remaining third and they cannot reach to an agreement over Hulu's valuation. Remember, Disney only has $200 million in liquid assets as of now and it has been losing money on movies. Park revenue is declining and the company needs to pay legal expenses for its battle against Florida. The minimum valuation for Hulu is projected to be $27 billion, meaning Disney would have to pay $9 billion in a best case scenario.

It's crazy to think a corporation as large as Disney may be very cash strapped, but there are many signs that point that way. That being said, this situation was 100% avoidable. Had Disney focused more on making good stories and efficiency, then its movies and TV shows would have made profits instead of losing money. Had it taken care of the Marvel and Star Wars IPs better, then the fans would be more engaged and perhaps there wouldn't be a $1 billion hotel flop. As Disney flounders, its competition keeps moving forward.

Disney can turn things around, but time is not on its side and it needs to right the ship... fast.

This post is also co-published on Odysee, Publish0x, and Steemit.