Departing Disney CEO Bob Iger is widely considered one of the greatest American corporate leaders over the past two decades. He built Walt Disney Co. (NYSE: DIS) from a modest entertainment company to a juggernaut in the global entertainment industry. While his legacy may stay intact, the company he created is in extreme trouble.

The spread of COVID-19 has triggered the shuttering of the Disneyland and Disney California Adventure parks, along with Tokyo Disneyland, Shanghai Disney Resort and Hong Kong Disneyland. The Shanghai park will be partially reopened as the spread of the disease in China has slowed.

In the quarter that ended December 28, Disney had revenue of $20.9 billion, up from $15.3 billion the year before. Net income from continuing operations dropped 21% to $2.1 billion.

The importance of theme parks (the Parks, Experiences and Products unit) cannot be underrated. They were $7.4 billion of Disney’s total last quarter. Operating income was $2.3 billion of total segment operating income of $4 billion. The parks would not have to be closed long to cut revenue down by hundreds of millions of dollars.

Disney has another risk. Its studio entertainment business had revenue of $3.8 billion in the most recent quarter, up from $1.8 billion in the year-ago quarter. Segment operating income was $948 million, compared to $309 million the year before. The industry already has begun to delay movies. It worries people will not go to theaters. Disney has major releases scheduled for the next several months.

Disney+, the company’s new video streaming service, could help the bottom line as home entertainment activity increases. But it is not a large part of Disney’s revenue yet to offset huge drop-offs at the top line.

Disney stock has a 52-week high of $153.41. It now trades at $91.81 a share, which is very close to the bottom of the 52-week range. That means its market cap has fallen to $165 billion. It is hard to argue that the drop is overdone, given the risk to Disney’s revenue.

It is impossible to forecast how much the pandemic will affect Disney’s current business and its future. In the most recent earnings release, while he was still CEO, Iger said:

Thanks to our incredible collection of brands, outstanding content from our creative engines and state-of-the-art technology, we believe our direct-to-consumer services, including Disney+, ESPN+ and Hulu, position us well for continued growth in today’s dynamic media environment.

Everything he said was true, and a testament to his legacy. Yet, what he built is in real trouble.

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