Walt Disney (DIS) - Get Report, the entertainment/media colossus, is getting hit every which way by the coronavirus. Just this weekend, it said Walt Disney World in Florida plans to furlough 43,000 workers.
Now it’s asking top commentators at ESPN, its pay-TV sports network, to accept pay cuts.
“We are asking about 100 of our commentators to join with our executives and take a temporary salary reduction,” ESPN said in a statement. “These are challenging times, and we are all in this together.”
Stephen A. Smith, Mike Greenberg, Alex Rodriguez and Kirk Herbstreit are among those making more than $1 million a year who have been asked to take reductions, according to Sports Business Daily.
ESPN wants to reduce salaries by 15% for three months, a knowledgeable source told Variety. The idea is to avoid furloughs and avoid slashing the paychecks of lower-paid workers.
The Covid-19 pandemic has forced Disney to delay the release of its movies and shut down its theme parks, resorts and cruises. Meanwhile, the suspension of virtually all athletic competition has starved ESPN of its lucrative programming.
About the only good news for Disney recently was last week’s announcement that the Disney+ streaming network has 50 million paid subscribers globally, about five months after its U.S. launch.
Long-term, things are looking up for Disney, says Morningstar analyst Neil Macker. “We expect average annual top-line growth of about 8% through fiscal 2024, with annual growth of 10% for fiscal 2021-24,” he wrote in a report last week.
“We project Disney's overall operating margin will improve to 19.5% in fiscal 2024 from 17% in fiscal 2019.”
The stock recently traded at $101.74, down 2.64%. It has dropped 30% over the last three months.