S&P Global Ratings downgraded Disney’s credit rating on Thursday because the coronavirus outbreak continues to damage its business.
“Its theme parks and film and TV studios remain closed by government-mandated social distancing orders and it's unclear when they will be allowed to reopen,” S&P said in a statement on Thursday.
The credit ratings company downgraded Disney's debt to an "A-" noting that because many of Disney’s businesses “require social interactions,” the outbreak has hit Disney "the hardest of the global media and entertainment companies.”
Disney (DIS) has been significantly exposed to the coronavirus pandemic. Its theme parks around the world have closed, major films have been delayed and live sports, which propel ESPN’s broadcasting, have been put on hold.
S&P added that Disney’s parks won’t likely return to normal capacity even after stay-at-home restrictions are lifted.
“Continued government-imposed social distancing and, longer term, consumer concerns about attending public events will likely retard theme park attendance.,” it said.
Disney has taken steps to manage the financial impact on the company, including executives taking pay cuts and furloughing employees "whose jobs aren't necessary at this time."