Sarah Hanson Period 3 Economics Semester Project

Walt Disney Corporations Effect on Todays Economy

The Walt Disney Corporation is one of the most innovative companies in todays society. Disney has proven itself time and time again as a force to be reckoned with, inside the hearts of Americans as well as inside the economy. Disney has a positive effect on the economy due to the extreme growth in the local economy, the holds it has in the entertainment business, as well as the holds it has with television today. The Disney Corporation started out as an animation studio in 1923 and was founded by the very special Walt Disney. Walt Disney had big plans for his business, but he had no idea Disney would grow in to the multibillion dollar corporation that it is today. Last year Disney made a net total of an estimated $17,340. As the recession grows in our modern world, Disney seems to increase its sales. Last year the company worked hard and increased its net income 1.45%. The corporation generated an estimated $4.1 billion cash flow in the past year, $341,666,666 per month. This means the company is seeing this amount of money enter and leave the corporation, further stimulating the economy. The most profitable sections of the Disney Corporation today are the Resorts and Theme Parks which opened in 1971 by Walt Disney. This section of Disney earned an estimated net total of $697 million, more than the $682 million that was made in 2009. The money made here comes from 3 main sections of the parks; admission and lodging, concessions, and souvenirs. While entrance to the parks and lodging are clearly the most costly aspects of the

theme parks and resorts, the biggest portion of money made here is earned through souvenirs and concessions. While the upkeep of the gigantic parks may be difficult, getting people to visit certainly is not. The Disney parks and resorts create the perfect opportunity for cheap tourism. Tourism helps out the economy in a very big way; as it brings money into the country from other countries. As United States dollar is not worth as much in other countries, Asians and Europeans can travel over to the United States for a very low price. The millions of people traveling are bringing money into the United States which helps our economy immensely. It was reported that an estimated 17 million people came to Magic Kingdom in the past year. While the United States parks are most popular, money is also brought in to the Disney Corporation through international parks. The Disney World and Disney Land have the highest attendance, however about 160 million people visited Euro Disney which was an increase of 1.4 percent from 2009. Hong Kong and Tokyo Disney had a combined total of 279 million people enter these parks in 2010, which was up 2.7 percent from 2009. These parks, along with other Disney parks, help bring extra money into the United States as well. In the United States alone, Disney is the employer to 66,000 people in the theme parks and resorts alone. Including all of the employees, Disney so generously spends about $1.1 billion on payroll checks alone every year. The employees here have jobs that cover everything, from creating rides to working the front desk at a resort. The Disney Corporation also gives around $474 million benefits to the employees, such as healthcare, which are offered to employees in other areas outside the parks and resorts. Employing all of these people helps to stimulate the local economy, keeping the unemployment rates down, and allowing even more circulation of money.

While Disney is famous for the parks, the movie industry is another huge section of the corporation. In the past year, Disney made a net total of around $97 million dollars. The parks and resorts are more profitable because most of the money earned in this section is going towards actors, investors, directors, etc. While the Disney is not the most profitable picture studio, it helps the Disney Corporation make millions of dollars every year, and creates a household name. Even though Disney is not the biggest studio, it still is a major motion picture name, and produces many box office hits. In 2009, the Disney movie Up earned over a net total of over $700 million. Other box office Disney hits include: Tron Legacy, Alice in Wonderland, and Toy Story 3. The money making in this section of Disney is extremely basic, Disney makes the movies, people spend money to see them, and money is circulated throughout the entire economy. Disney makes money through DVD sales as well. In this day, it was noted that DVD and CD sales have been at a record low due to people illegally downloading items off the internet. This does not have that much of an impact on the Disney Corporation as almost all of the movies Disney creates are targeted for younger audiences, who dont use piracy or any other way to get the movies illegally. Disney sells an estimated 1.9 billion DVDs a year, worldwide, reaching many different people ranging in interests, gender, and age. While Disney movies are popular, the Disney Channel holds a very special place in the heart of about 1.85 million children. Disney Channel runs a close second to Nickelodeon for the most popular childrens network. Nickelodeon reaches about 2.35 million kids each year where Disney reaches about 1.85 million kids. While they are second for most watched, they have the most popular kids animated TV show, Phineas and Ferb, for kids. Disney is also lucky to have the standing highest rated cable viewing thanks to High School Musical 2 with 18.6 million

viewers. Due to the massive success these shows have had through Disney Channel, Disney has created consumer products replicating the popular shows which generate a lot of money for the Corporation. Today, Hannah Montana memorabilia, games, and clothes are ranked 6th on the National Retails list for top toys. Its been calculated that approximately one billion dollars has been made in 2009 and 2010 for Disney with the combined gross amount of money made from Disney consumer products. Disney doesnt just have the Disney Channel, they have expanded and now this major corporation has one of the few major networks, ABC. ABC has been the host to three of the most viewed television shows; Greys Anatomy, Desperate Housewives, and the ever popular, lost. Television shows get their money and use it in a very different way than most resorts, parks and movies. Just as any other network, Disney sells commercial time to advertising agencies and can make a huge profit on this. As well as having popular shows, every three years it is the host of the Super Bowl, which brings in a ton of money, as the recently raised price for a commercial is around $3.5 million. In conclusion, the Disney Corporation has a very positive impact on the economy today. Disney provides sufficient aid and stability to the local Florida economy, and has its major holds in music, movie, and television industries. Its been said that about $3.9 billion goes through the company each year, helping our nations economy in various ways. The Disney Corporation was created to provide magic for everyone around the world, and due to the positive impact on the economy in every way possible, it has proven to be magical for the economy as well.