Disney Gator Attack Puts Key Business at Risk, at Exactly the Wrong Time

Disney needs to handle the tragedy sensitively — and reassure families

Last Updated: June 16, 2016 @ 12:51 PM

Disney’s woes are very small compared to those of the family that just lost a two-year-old in an alligator attack at the company’s Grand Floridian resort.

But if Disney handles the tragedy insensitively — or fails to quickly reassure families that its other attractions are safe — it is putting one of its most important businesses, theme parks, at risk. The challenge arises at what was supposed to be a triumphant moment for Disney: Its new Shanghai park opens today (Thursday, local time).

Disney’s theme parks make up about 31 percent of overall company revenue annually. Only the company’s media networks — the segment of the company that includes ESPN and ABC — earns more. Theme parks earned $16.62 billion in fiscal 2015 — which was up 7 percent from the comparable prior year.

Disney had a really strong 2015, hitting a company-record $8.4 billion in net income, up 12 percent year over year. Theme parks contributed significantly to that growth, and the Shanghai park is key to its growth strategy.

So far, for fiscal 2016, Parks revenue was up 9 percent in the first quarter and 4 percent in the second.

Could those gains reverse course as unthinkable tragedy struck just before the busy summer months?

Disney, understandably, is only speaking about its sorrow for the family of Lane Graves, the child who died.

“As a parent and a grandparent, my heart goes out to the Graves family during this time of devastating loss,” said Bob Iger, chairman and CEO, The Walt Disney Company. “My thoughts and prayers are with them, and I know everyone at Disney joins me in offering our deepest sympathies.”

The Grand Floridian could get calls for cancellations — and could face a lawsuit, or insurance hikes. The park — and maybe entire Central Florida operation — will probably need to incur unexpected costs to reassure guests and combat bad press.

Today, all beach resorts were temporarily closed following the attack, amid reports of at least one other recent gator sighting surfacing.

Of course, Disney is so massive that the financial fallout could prove a drop in a very deep bucket. Disney stock slid just 0.14 percent today.