Disney Confirms Future Expansion Plans, Increases Budget by $1 Billion

Disney plans on “turbocharging” its plans on expansions at the theme parks, as a new filing has noted that the House of Mouse is committed to at least spending $1 billion more this year alone. Let’s find out more about what this means.

Disney Eyeing $1 Billion in 2024 for Expansions and More

In its recent submission to the Securities and Exchange Commission (SEC), Disney has outlined plans for a substantial increase in capital expenditures for the fiscal year 2024. The projected increase amounts to $1 billion over the figures reported for 2023. Notably, a significant portion of this additional capital is earmarked for the Experiences division, previously known as Parks, Experiences, and Products, focusing on expanding its cruise ship fleet.

Capital expenditures, often referred to as CapEx, refer to the funds a company spends on acquiring, upgrading, or maintaining physical assets such as property, equipment, buildings, or technology.

The total forecast for Disney’s capital expenditures in 2024 is $6 billion. This projection marks a notable shift from previous expectations. At the onset of the fiscal year 2023, Disney announced plans for capital expenditures totaling $6.7 billion. Yet, the actual spending for that year amounted to $4.9 billion, falling considerably short of initial estimates. Similarly, for fiscal year 2022, Disney had projected $6.1 billion in capital expenditures, but the actual spending was also $4.9 billion.

While the $1 billion increase in planned expenditure falls short of the ambitious $1.8 billion estimate from the preceding year, it echoes the pattern observed in the 2019 projections. In fiscal year 2019, Disney had anticipated a $1 billion increase in spending over the previous year, but the actual increase was closer to $400 million.

Long-Term Investment Plans for the House of Mouse

Anticipation looms regarding Disney’s long-term investment strategy, particularly its commitment to allocate $60 billion across its global Experiences division and $17 billion specifically at Disney World over the next decade. However, significant expenditure in this regard is not expected to materialize until closer to 2030, with projects likely to take several additional years to fruition after that.

It’s pertinent to note that the capital above expenditure estimates encompass the entirety of the company. In 2023, Disney allocated just over $3 billion of the $4.9 billion total capex to the Experiences division, representing approximately 60% of its overall capital expenditure. The Entertainment division accounted for $1 billion, Sports for $15 million, and corporate spending amounted to nearly $900 million.

According to the filing, the planned $1 billion increase in expenditure is attributed primarily to higher spending within the Experiences division, specifically mentioning ongoing investment in the Disney Cruise Line business. This estimate has remained unchanged since its initial disclosure in the November 2023 filing, suggesting that spending is proceeding as anticipated.

What Does This All Mean Moving Forward?

Here’s what this entire SEC filing means for the future of the Walt Disney Company.

• Increase in Spending: Disney plans to spend more money in the upcoming year, with a projected increase of $1 billion compared to the previous year. This means they’re looking to invest heavily in various areas of their business.
• Focus on Experiences Division: A significant portion of this money will go into what Disney calls its Experiences division, including theme parks and other leisure activities. Specifically, they’re putting a lot of emphasis on expanding their cruise ship fleet.
• Change in Plans: Disney’s spending plans for 2024 have shifted. While initially aiming for a higher budget, they spent less in the previous years than they had planned. This could indicate adjustments in their strategy or unexpected challenges.
• Long-term Investment Strategy: Disney has big plans for the future, including investing billions of dollars over the next decade in their global Experiences division, with a substantial portion going to Disney World. However, these projects are not expected to kick off fully until around 2030 and may take several more years to complete.

Despite the increased spending, Disney seems to be sticking to their plans. Their first-quarter spending in 2024 aligns with their projections, indicating that things are progressing as expected.