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Why Disney is doubling down on theme parks with a $60-billion plan

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Why Disney is doubling down on theme parks with a $60-billion plan

Over the decades since Walt Disney opened his first theme park in 1955, the company’s tourism business has ballooned to an enterprise worth tens of billions in yearly sales, with sprawling locations in Anaheim, Orlando, Paris, Shanghai, Hong Kong and Tokyo.

Today, the Burbank entertainment giant is doubling down once again. Disney plans to invest $60 billion over 10 years into its so-called experiences division, which includes the theme parks, resorts and cruise line, as well as merchandise.

In Anaheim, the city council recently approved an expansion plan at Disneyland Resort, which could lead to at least $1.9 billion of development and involve new attractions alongside hotel, retail and restaurant space.

Why the massive investment? At a time when Disney faces revenue challenges due to cord cutting, streaming wars and a slower film box office, its theme parks are a bright — and reliable — spot for its business. Moreover, they play a major part in the company’s strategy — using well-loved movies to inspire rides and vice versa (think “Pirates of the Caribbean”), feeding an ongoing virtuous cycle.

“When you consider other elements of Disney’s business, those theme parks, they’ve shown themselves to be proven winners,” said Carissa Baker, assistant professor of theme park and attraction management at the University of Central Florida’s Rosen College of Hospitality Management. “There’s no doubt that they have stayed very competitive in the film space and the TV space, but they’ve always led the theme park sector.”

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During the most recent fiscal year, the company’s experiences division — which is heavily anchored by the parks — brought in about 70% of Disney’s operating income, according to a filing with the U.S. Securities and Exchange Commission. By contrast, Disney’s sports sector, including ESPN, contributed 19% of operating income. The entertainment division, consisting of the company’s TV channels, streaming services and movie studios, brought up the rear at 11%.

Those numbers represent a stark contrast from even 10 years ago, when the company was heavily reliant on its TV networks, which brought in 56% of Disney’s operating income (that segment included ESPN at the time). The parks and resorts division drew just 20%.

The tide began to turn in 2019, as the global theme park industry saw record-breaking attendance, just in time for the pandemic to hit the next year.

With the parks closed, Disney reported an operating loss of $81 million in 2020. Disneyland and Disney’s California Adventure, in particular, were shut for 15 months, due to tight restrictions in the Golden State. Since then, pent-up demand from visitors has propelled theme park revenue in a way that hasn’t been replicated in movie theaters.

“The industry was really growing quickly before COVID-19, and that obviously put a crimp on everything,” said Martin Lewison, associate professor of business management at Farmingdale State College in New York. “But it appears as long as the economy remains healthy, the industry is back on track for that growth.”

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Theme parks are typically one of the fastest parts of the travel and hospitality industry to recover after economic downturns, said Dennis Speigel, founder and chief executive of consulting firm International Theme Park Services. Part of that is because it’s hard to duplicate the theme park experience at home.

“Disney sets the bar for our entire global theme park industry,” Speigel said. “The guests, the visitors, they love the way Disney immerses you in their storytelling.”

The Disneyland Resort expansion plan, known as DisneylandForward, will help the 490-acre park stay fresh for visitors. The plan calls for changes to the park’s zoning, allowing the company more freedom to mix attractions, theme parks, shopping, dining and parking. While the plan doesn’t specify exactly which attractions will be added to the resort, company officials have floated ideas including immersive Frozen, Tron and Avatar experiences.

Over the years, Disneyland has cycled out many rides and exhibits to make way for new ones — for example, of the original 33 attractions that debuted with the park, only about a dozen still exist (One that didn’t make it? The Monsanto Hall of Chemistry).

Though Disneyland and Disney’s California Adventure have recently seen additions such as Star Wars: Galaxy’s Edge, Avengers Campus and the renovated Pixar Place Hotel, giving guests new reasons to come back again and again are the key to increased growth. This summer, the Magic Kingdom will open Tiana’s Bayou Adventure, replacing the controversial “Song of the South”-inspired Splash Mountain attraction.

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“In the theme parks business, you tend to make more money the more you invest,” said Lewison of Farmingdale State College. “People love riding Haunted Mansion 50 times, but the truth is that even that gets old. So new rides, new lands, new parks — these things draw in attendance, they create pricing power and they add capacity.”

And Disney’s rivals in the theme parks business show no signs of slowing down, meaning Disney can’t just rely on its existing hits. Universal Studios Hollywood recently added Super Nintendo World to its park, SeaWorld is touting new attractions and shows for its 60th anniversary this year, and even immersive art installation company Meow Wolf is expanding throughout the U.S.

The competition is becoming so fierce that Disney Chief Executive Bob Iger faced a pointed question during last month’s shareholder meeting about Walt Disney World’s readiness to vie with a new Universal park set to open in Orlando in 2025. He pushed back on the query, saying the idea that Disney World didn’t prepare enough attractions to compete for guests that year “just couldn’t be further from the truth.”

“We’ve been aware of Universal’s plans for a new park for more than a decade,” he said. “We have a sophisticated approach to analyzing the needs of all of our businesses and strategically deploying capital.”

The importance of the parks to Disney’s bottom line is also showing up in the entertainment giant’s search for Iger’s successor. (Iger is expected to retire in 2026.) Josh D’Amaro, the chair of Disney Experiences, which includes the parks, is considered one of four front-runners for the job. Notably, it was Bob Chapek, formerly of the parks division, who initially succeeded Iger, though he was later ousted from the role.

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How a worker who suffered a microfracture of his foot ended up with a $58-million payout

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How a worker who suffered a microfracture of his foot ended up with a $58-million payout

For eight years, Lancaster resident Pablo Scipione and his attorneys pushed for compensation the 46-year-old independent contractor said he was owed due to a workplace accident in early 2016.

In that accident, he slipped, fell and suffered a microfracture to his foot, according to his lawsuit, but that was only the start of his troubles.

Scipione sued the company he was providing services for — Osaka, Japan-based transportation and manufacturing company Kinkisharyo — for negligence shortly after the workplace fall, his lawyers said. But he eventually developed a debilitating medical condition due to the injury, according to court documents, leading the skilled tradesman to quit his job. He asked his legal representation to seek a settlement of $3 million in July 2022 to pay mounting medical bills.

The offer was rejected by Kinkisharyo’s defense team, according to Scipione’s attorneys.

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That decision backfired for Kinkisharyo on Tuesday when a Los Angeles County Superior Court jury awarded Scipione $58.35 million in compensatory and punitive damages.

Calls to Kinkisharyo’s legal team, Los Angeles-based Husch Blackwell, were not returned.

Khail Parris is a partner at Lancaster-based Parris Law Firm, and was lead attorney along with Alexander Wheeler for the plaintiff.

Parris said $54.15 million was awarded in compensatory damages for past lost earnings, future lost earnings, future medical expenses and past and future pain and suffering. The jury also awarded $4.2 million in punitive damages.

Parris said he was a little surprised by the payout since juries can be “unpredictable.”

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“I’m happy the jury heard my client,” he said in a phone interview Wednesday. “The defendant took a very aggressive stance on this case and dragged it out for eight years. The jury felt like enough was enough.”

Scipione was employed by railroad contractor Altech Services at the time of the accident, according to court documents. His duties included supervising teams of electrical technicians also employed by Altech, documents say, and his specialty was electrical troubleshooting.

Scipione was dispatched to Kinkisharyo’s Palmdale train yard around 2 a.m. on Feb. 2, 2016, for repair work, according to the lawsuit. He was instructed that it needed to be done within three hours.

Unbeknownst to Scipione, the train he was going to work on was wet after undergoing a recent water tightness test, according to testimony from a Kinkisharyo senior safety manager. That person said the train did not dry for the minimum of two days before Scipione went to work on it.

The Kinkisharyo employee also conceded that there were other safety issues in Scipione’s workspace, including poor lighting.

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Scipione climbed to the top of the rail car and slipped and fell atop the vehicle, causing the microfracture to his left foot, according to court documents. Though Scipione went home after the accident, he came back to work the next day.

Nearly three months after the injury, Scipione was diagnosed with complex regional pain syndrome, court documents say. The Mayo Clinic describes the syndrome as “a form of chronic pain” that usually affects an arm or a leg and typically develops after an injury. The Mayo Clinic added that “the pain is out of proportion to the severity of the initial injury.”

“The defendants fought us at every corner for eight years to help my client receive proper compensation and medical care,” Parris said. “Things didn’t turn until their safety manager conceded that the factory had been unsafe.”

Part of Scipione’s struggle was finding care through workers compensation insurance. Letters were presented in court that showed denials of care as the process of determining if Scipione was an actual employee of Kinkisharyo or Altech dragged out.

“The jurors were 12 little guys and saw a fellow little guy going up against a big corporation,” Parris said. “They stood up for one of their own.”

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Anita Hill-led Hollywood Commission wants to change how workers report sexual harassment

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Anita Hill-led Hollywood Commission wants to change how workers report sexual harassment

In the wake of movie mogul Harvey Weinstein’s 2020 rape trial, a survey of nearly 10,000 workers by the Anita Hill-led Hollywood Commission revealed a sobering result: Few people believed perpetrators would ever be held accountable.

The vast majority, however, were interested in new tools to document incidents and access resources and helplines.

Four years later, the Hollywood Commission is trying to make that request a reality.

On Thursday, the nonprofit organization launched MyConnext, an online resource and reporting tool that will allow workers at five major entertainment business organizations to get help with reporting incidents of harassment, discrimination and abuse.

Homepage of MyConnext.

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(MyConnext)

The website allows those entertainment industry employees to speak with a live ombudsperson, create time-stamped records and submit those reports to their employer or union. (Any entertainment worker can access the site’s resources section to learn more about what it means to report an incident and understand complicating factors such as mandatory arbitration.)

So far, the commission has partnered with the Directors Guild of America, the Writers Guild of America, certain U.S.-based Amazon productions, all U.S.-based Netflix productions and film/TV producer the Kennedy/Marshall Co., founded by filmmakers Kathleen Kennedy and Frank Marshall. The International Alliance of Theatrical Stage Employees is expected to join later this year, according to the commission.

MyConnext is not intended to replace any of these organizations’ individual reporting platforms. Rather, it’s designed to provide an additional option and serve as a one-stop shop for workers seeking help or resources. The commission did not say what the initiative cost.

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One key feature of the MyConnext reporting platform is called “hold for match,” which allows a worker to fill out a record of an incident and instructs the system not to send the report to one of the partner organizations until another report about the same person is detected. At that time, both reports will be sent.

“It is very difficult for an individual to come forward,” said Hill, president of the Hollywood Commission, which was founded in October 2017 to help eradicate abuse in the entertainment industry. “Let’s say, for example, Harvey Weinstein: It was very difficult to prove a case when there was only one person because there was a tendency to turn it into a so-called ‘he-said, she-said’ situation.”

With this feature, however, employers could potentially recognize a pattern of abuse. And that, Hill said, could be a game changer.

“We ultimately hope that [the tool] will elevate the level of accountability, and accountability is ultimately what I think everybody wants,” said Hill. The commission led the 2020 survey, along with a follow-up survey this year that found a similar desire for harassment reporting resources.

“Information, really, is power,” said Hill.

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Advocates say such resources have become even more crucial amid what they describe as a pullback in Hollywood’s promised efforts to create a more inclusive industry for women. Fears of backsliding escalated after Weinstein’s New York sex assault conviction was overturned last month by a state appeals court, which ordered a new trial. Weinstein’s conviction in California remains.

“What’s so important even now, in light of the reversal of a conviction, is making sure that individuals who have suffered harm get to choose what makes the most sense for them,” said Malia Arrington, executive director of the Hollywood Commission. “You need to be informed about what all of your different choices may mean to make sure that you’re entering into whatever path with eyes wide open.”

With that in mind, the platform has a multipronged approach. The resources section helps workers understand their options, including the general process for filing a complaint, as well as where to access counseling and emotional or employment support.

Members of the participating organizations also have access to a secure platform through MyConnext that lets them record an incident — regardless of whether they submit it as an official report — send anonymous messages, speak with an independent ombudsperson and submit reports of abuse.

Speaking with an advocate allows workers to get their questions answered confidentially and by a live human, said Lillian Rivera, the ombudsperson who is employed by MyConnext.

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“It’s a human that’s going to listen to folks, who’s going to be nonjudgmental, who is going to be supportive and is going to be able to point people toward all of their options, and really put the power in the hands of the worker so they can make the decision that’s best for them,” Rivera said.

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Boeing's Starliner capsule stuck on ground after helium leak

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Boeing's Starliner capsule stuck on ground after helium leak

After years of delays, Boeing’s Starliner capsule was set to take off early this month with two astronauts aboard — and now the flight to the International Space Station has been put on hold indefinitely following a series of setbacks.

The original May 6 launch was scuttled hours before takeoff due to a balky rocket valve. It was rescheduled first for May 10 and then a second time for Friday, when it was decided to replace the valve on the Atlas V rocket.

All systems seemed go until yet another problem cropped up, this time with the capsule. A helium leak was detected coming from the spacecraft’s propulsion system.

After two more delays, officials with NASA, Boeing and United Launch Alliance, the rocket maker, said late Tuesday that the flight would be postponed indefinitely — a sequence of events that Boeing didn’t need.

“It’s embarrassing that Boeing was on the verge of launching this mission, and now we do not even have a time for when they are planning to launch,” said Laura Forczyk, executive director of space industry consultancy Astralytical. “On the other hand, we have waited years for this launch, so what’s another couple of weeks. They are relying on this mission to go very smoothly.”

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NASA said Tuesday that it is still reviewing flight safety issues and would “share more details once we have a clearer path forward.”

The delays are particularly nettlesome for the Arlington, Va., aerospace giant because it’s years behind SpaceX in launching a crewed capsule to service the space station.

Both companies were given multibillion-dollar contracts in 2014 to develop the craft, and since 2020 Elon Musk’s Hawthorne company has ferried eight operations crews to the base — while Boeing has managed only two unmanned flights.

The companies were chosen by NASA after the agency had to rely on the Russian program to send U.S. astronauts to the station when the space shuttle program was ended in 2011.

Boeing has reportedly had to eat $1.5 billion in Starliner cost overruns, and it can ill afford a failure with astronauts aboard, especially after the two crashes of its 737 Max 8 jets and a door plug that blew out of a 737 Max 9 flight this year on its way to Ontario International Airport in San Bernardino County.

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“Boeing has so much to prove. They’re just about four years behind SpaceX,” Forczyk said. “They need to make sure they have all their ducks lined up in a row.”

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