Disney to Spend $60 Billion on Theme Parks Expansion Over Next Decade

Disney plans to spend approximately $60 billion on theme parks expansion over the next decade, the company revealed in an SEC filing on Tuesday. The number is double the amount spent on parks in the last decade, and underlines the company’s focus on an arena that has been a bright spot as the media arms have struggled.

The filing calls for “investing in expanding and enhancing domestic and international parks and cruise line capacity, prioritizing projects anticipated to generate strong returns.”

In its Q3 earnings, Disney Parks, Experiences and Products generated $2.4 billion in operating income, an 11% increase from the previous year. That stands in contrast to the $1.1 billion operating profit of Disney Media and Entertainment Distribution, which marked a year-over-year 18% decline.

Disney’s stock dipped 2% in early trading on news of the investment.

The Parks division has been healthy through a somewhat turbulent time at Disney, as the Marvel franchise has been underperforming, “The Little Mermaid” live-action remake failed to reach the heights of prior live-action redos, Disney+ continues to struggle and Bob Iger openly ponders a sale of ABC and other TV assets.

“There are far fewer limits to our parks business than people think,” Bob Iger told the New York Times of the investment, adding, “By dramatically increasing our investment — building big, being ambitious, maintaining quality and high standards and using our most popular I.P. — it will be turbocharged.”

Details of the expansion were not made available, but Disney recently teased expansions at Walt Disney World’s Magic Kingdom and Animal Kingdom parks, including potential lands devoted to “Indiana Jones,” “Encanto” and “Zootopia.”

Josh D’Amaro, chairman of Disney Parks, Experiences and Products told the Times that bringing IP to life in the parks has proven successful time and time again.

“Imagine bringing Wakanda to life,” he said. “In terms of bringing the latest Disney-Marvel-Pixar intellectual property to the parks, we haven’t come close to scratching the surface. And we have learned that incorporating Disney IP increases the return on investment significantly.”

The company is also mulling a redevelopment of land adjacent to Disneyland, pending approval from the city of Anaheim, and has been investing heavily in its cruise division.

Disney’s most recent major attraction openings include a Tron light cycle ride at Magic Kingdom and Guardians of the Galaxy – Cosmic Rewind at Epcot. But the company also recently announced plans to shutter its pricey Galactic Starcruiser Star Wars hotel, a billion-dollar bust that was the brainchild of former CEO Bob Chapek.

“We believe that the company’s financial condition is strong and that its cash balances, other liquid assets, operating cash flows, access to capital markets and borrowing capacity under current bank facilities, taken together, provide adequate resources to fund ongoing operating requirements, contractual obligations, upcoming debt maturities as well as future capital expenditures related to the expansion of existing businesses and development of new projects,” Disney said in the filing.

Disney’s investment in Parks comes as its largest competitor in that arena, Universal Studios, is due to open a massive park in Orlando in 2025. Called Epic Universe, the under-construction park spans 110 acres of attractions and will house lands devoted to “Harry Potter,” “How to Train Your Dragon,” Universal Monsters, Nintendo and more.

Epic Universe will combine with Universal’s popular Islands of Adventure, Universal Studios Florida and Volcano Bay parks to make their Orlando destination a week-long event.

While Disney has expressed a desire to spend significantly in this arena, nothing is yet under construction so Universal has a serious leg up.

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