“Regulators are seriously handling the allegations against Disney.”
Editor’s note: This article is from WeChat public account “Poisonous 眸” (ID: youhaoxifilm), author Su Xing, editor Jiang Yuqi.
After the afternoon of August 19th, US news site Market Watch broke the news that Disney’s former senior financial analyst Sandra Kuba had submitted a series of materials to the US Securities and Exchange Commission, claiming that she had been in office for 18 years. Disney theme parks and resort business units use corporate accounting system vulnerabilities to systematically exaggerate billions of dollars in revenue.
Toxic (Wechax ID: youhaoxifilm) It was discovered that after the news was released, the Disney stock price that was rising in the day was diving, the gains Retracted to 0.07%, closing at $135.29 per share, with a total market capitalization of $243.7 billion. On the second day, the stock opened lower, falling more than 1%. The intraday decline narrowed, and the decline was 0.12%.
Disney’s stock price trend in the past 5 days
Kuba’s report shows that Disney’s financial fraud is mainly concentrated in two aspects: first, tickets, free golf tickets and free tickets issued by promotions, will be recorded in the false income according to the face price; secondly at the gift card level Gift cards purchased by customers at a discounted price of $395 will also be recorded at the original price of $500, and the amount will be recorded twice when the customer purchases and uses the gift card,
For this series of irregular operations, Kuba said that there are design flaws in Disney’s accounting system, making false operations difficult to track. In the 2008-2009 fiscal year alone, Disney’s annual revenue may be exaggerated by $6 billion. . And according to the Disney Annual Report, the total revenue of theme parks and resorts in 2009 was 1$0.9 billion.
To this end, as early as 2013, Kuba reported the false income to management for the first time, but no one followed suit. In 2016, Kuba reported the matter to the higher management, but in November of that year, the company’s audit department communicated with her and then did not.
In desperation, Kuba had to provide relevant reporting materials to the SEC in 2017, but less than a month later, she was dismissed from Disney. In October of that year, Kuba filed a complaint with the US Department of Labor’s Occupational Safety and Health Administration for Disney’s revenge whistleblower. However, when responding to the departmental investigation, Disney said that Kuba had no reasonable basis for complaining to colleagues at work. The behavior is not only out of date, but also hurts the company’s reputation.
After leaving the post, Kuba submitted two additional submissions. The most recent one showed that Disney had the suspicion of tax evasion by tampering with the income type. For example, the customer’s room consumption was recorded as food and beverage consumption, while the former’s tax rate was higher. The latter is low, which drastically reduces sales taxes in Florida, California, and Hawaii.
Disneyland in California
It is reported that Kuba has met with SEC officials several times to discuss the allegations, and the SEC spokesperson did not respond to the matter. In the face of the latest round of accusations, Disney spokesperson said that the company has reviewed the part of Kuba’s allegations and has not found any problems, and pointed to the Market Watch, thinking that the website knows Kuba’s The allegations were unfounded and she was deliberately given a platform for her voice.
In this regard, Jordan Thomas, a former US Securities and Exchange Commission law enforcement attorney, said in an interview that the SEC will receive more than 25,000 reports and complaints each year, but most of the investigations will not go so far. Since the SEC has repeatedly interviewed Kuba, it has asked reporters more than once to provide more evidence that the regulator is seriously handling the allegations against Disney. As for the actual situation, it is necessary to wait for the results of further investigations by relevant departments.
This allegation of fraudulent performance on offline business is undoubtedly worsening the Disney offline business that was in the bottleneck.
According to Disney’s 2018 annual report, the theme park and resort-related revenue reached $20.296 billion, accounting for 34% of revenue, making it the second largest source of revenue for Disney. Despite the third quarter earnings report released a few days agoSee, theme parks and resorts revenue of 6.6 billion US dollars, year-on-year growth of 7%, still maintained a good trend, but the decline in the number of tourists has been one of the ills of Disney theme parks and resorts in recent years.
Visitors The decline in quantity is one of the ills of Disney theme parks and resorts in recent years
According to the Global Theme Park report released by Themed Entertainment Association in 2017, the number of visitors to 13 of the 14 Disney theme parks worldwide has declined in 2016, including the number of Hong Kong and Paris theme park visitors. Falling more than 10%. Only the number of newly-occupied Shanghai Disney and Native American parks and per capita consumption were strong, and the revenue of the theme park in FY2016 increased by 5% year-on-year.
However, Shanghai Disneyland has not been able to maintain a prosperous situation. Since the second quarter of 2018, the number of tourists and profits have continued to decline. Disney China’s spokesperson also said at the beginning of this year that the company has adopted various Various methods, such as ticket products, but as far as the current situation is concerned, the boosting effect is not obvious.
For the dilemma encountered in the theme park, Disney announced that it plans to invest $24 billion in five years from last year for the full upgrade of the five Disney Resorts in the world. The Disneyland Star Wars Paradise in California has opened on May 31, and the Star Wars Paradise in Florida’s Hollywood theme park will also open on August 29. Some insiders believe that the number of visitors to the theme park after the opening of the Star Wars theme park is expected to increase by more than 25%.
Disney Star Wars Theme Park
The development of offline business was blocked, but Disney’s online business is accelerating. As of now, Disney’s global box office revenue in 2019 has reached 8 billion US dollars, breaking the box office record of the same period, and swept 7 of the top 10 films of this year’s box office list, of which only the “Avenger League 4” is in Worldwide, it has nearly $2.8 billion in box office. And just in March of this year, Disney officially completed the work for Fox.