Credit: DisneyThe Walt Disney Company may be struggling to turn a profit when it comes to massive IP franchises like the Marvel Cinematic Universe and Star Wars, but it turns out that the Mouse’s least-known park is quietly making a fortune.
Although Disney is, by a significant margin, the world’s most famous entertainment media company, it has been struggling in recent years. Like its peers and rivals, Warner Bros. Discovery, NBCUniversal, and Paramount, Disney was hit hard by the COVID-19 pandemic, causing it to lose billions in potential box office revenue for several years as theaters were upended by the crisis.
At the same time, the MCU and Lucasfilm, Disney’s most valuable franchises, have been unable to maintain the same financial and critical momentum that they did only a few years ago. Despite what CEO Bob Iger says, it appears that “superhero fatigue” is very real and affecting the company’s bottom line in a big way. When the company can’t even depend on Star Wars or Indiana Jones to be financial successes, it is in big trouble.
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In response, Disney has been increasingly pivoting to its parks as a cash cow. Over the last decade, the price of Disneyland and Disney World tickets and entertainment have been skyrocketing, far outstripping normal levels of inflation.
As if that weren’t enough, the Mouse seems to be finding every possible opportunity to add upcharges to Guests; in the short term, this may be making the company money, but it is unquestionably pushing Disney fans to new levels of frustration.
Those same Guests might be even more frustrated about the constantly rising prices at Disney Parks if they knew that the company is making huge amounts of money off private, little-promoted destinations like Castaway Cay, Disney’s private island and cruise port in the Bahamas.
While Disneyland and Disney World are promoted as the crown jewels in the Parks department, many fans will never even get the opportunity to get to Castaway Cay.
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Despite that, a new report in Forbes confirms that Castaway Cay is quietly making money hand over fist. The Disney Cruise destination is owned by a complex series of businesses (which, arguably, could be called “shell companies”) and is part of a 99-year contract with the Bahamian government. According to the report:
[Disney] has paid $220 million of dividends to Magical Cruise Company since 2014. A dividend is a mechanism by which a company pays money to its owners out of its profits or reserves. The first dividend that DCL Island Development paid to Magical Cruise Company was $40 million in 2014 and it hit the crest of the wave the following year with $100 million. As the graph below shows, there has been a steady stream of dividends since then with the latest shown in the financial statements being $20 million in 2020.
In contrast, over that same period, Disneyland Paris lost the company $1.8 billion, meaning that the Disney Cruise destination is secretly one of the more profitable aspects of that division of the company. Understandably, Disney CFO Hugh Johnston revealed on a recent earnings call that “the cruise business, frankly, is one that has an enormous number of opportunities for us over time. And that is why we’re leaning more heavily into that business.”
If this trend continues, Disney might consider cutting losses at Parks and entering the cruise industry more and more.
Have you ever been to Castaway Cay? Tell us your experiences in the comments below!