One of the world’s largest media and theme park companies could face significant challenges due to a potential strike, just a year after a Hollywood strike affected the company.
What Happened: Media giant The Walt Disney Company DIS is seeing its movie segment gain momentum with the recent success of "Inside Out 2" and a future slate that includes "Deadpool & Wolverine," "Moana 2" and "Mufasa: The Lion King."
The company's theme park segment could soon be under fire with over 14,000 workers, represented by four unions, authorizing a strike.
On Friday, a majority of union members voted to authorize a strike, according to an NBC News report. The workers are citing unfair labor practices as the reason for the potential strike during current contract negotiations. Sources said 99% of union members voted to authorize the strike.
Workers involved in the strike include ride operators, clerks, candy makers and custodians, according to the report.
"This vote shows that the Cast Members have had enough!" Disneyland candy maker Aaron Zarate, who is a member of the workers' bargaining committee, said.
Read Also: Walt Disney Q2 Earnings: Profit Beat, Moderating Parks Growth, Password-Sharing Crackdown And More
Why It's Important: The authorization for a strike doesn’t guarantee it will happen, but it could be the first strike at Disneyland since 1984.
In September 1984, around 2,000 Disneyland cast members went on strike and walked off the job for 22 days before an agreement was reached.
"We greatly appreciate the important roles our cast members play in creating memorable experiences for our guests, and we remain committed to reaching an agreement that focuses on what matters most to them while positioning Disneyland Resort for growth and job creation," Disneyland spokesperson Jessica Good said.
Good said a strike authorization is "not unusual" and negotiations continue between the two sides.
Bargaining dates back to April 24 according to the report. The contract expired on June 16 for cast members at Disneyland. A contract for Disney California Adventure and Downtown Disney cast members expires on Sept. 30.
Disneyland workers filed unfair labor practice charges against the theme park operator on June 10. The National Labor Relations Board is looking into the allegations.
A 2018 study from Occidental College and the Economic Roundtable said 74% of Disneyland workers couldn't cover their basic expenses each month, with housing and food costs among the biggest challenges.
A survey of union workers this year showed that 64% of cast members spend over half their monthly paychecks on rent.
The Hollywood strike of writers and actors led to several Disney movies being delayed, and the media company suffered from lower output in 2023 and 2024.
Disney CEO Bob Iger was criticized for his comments on the strikes, which were seen as not sympathetic enough to the workers.
"We've talked about disruptive forces on this business and all the challenges we're facing, the recovery from COVID which is ongoing, it's not completely back. This is the worst time in the world to add to that disruption," Iger previously said.
The CEO said the expectations from workers on strike were not realistic, "and they are adding to the set of the challenges that this business is already facing that is, quite frankly, very disruptive."
The strike authorization at Disneyland will be closely monitored by investors and analysts, potentially causing volatility in Disney shares until an agreement is reached.
DIS Price Action: Disney shares are down 2% to $93.78 on Monday, versus a 52-week trading range of $78.78 to $123.74. Disney shares are up 4.1% year-to-date in 2024.
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