Disney World and Universal Studios Florida compete for your vacation dollar. That's a battle which the Comcast-owned (CMCSA) park has taken to its rival since the 2010 opening of "The Wizarding World of Harry Potter" at Universal's Islands of Adventure.
Before it added the first-of-its-kind Harry Potter "land," many vacationers viewed Universal Studios as a secondary attraction. You might plan to spend a day of your Disney World trip at the rival park, but you would never spend your whole vacation there.
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"Wizarding World" changed that by changing the standards for what a theme park attraction could offer. Instead of just being a ride, the new Harry Potter land offered a fully immersive experience. When you enter the original "Wizarding World" (or the second one at the main Universal Orlando park), you leave the outside world.
It's a new kind of experience that upped the ante for theme parks. That ended decades of Disney only making minimal investments in its Florida theme parks -- generally adding character meet-and-greets rather than new rides.
Universal's bold stroke forced Disney to spend billion of dollars on everything from "Toy Story Land" and "Star Wars: Galaxy's Edge" to Disney's Hollywood Studios and "Pandora: The World of Avatar" at Disney's Animal Kingdom.
Basically, Universal turned its Florida parks into a viable alternative to a Disney vacation. That has led to both companies continuing to spend money -- billions of dollars a year -- on adding new rides and lands to keep their parks fresh.
Now, Universal has made a more subtle move that could force Disney to spend billions of dollars in a way that won't add a single attraction to its four Florida theme parks.
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Universal Studios Gives Its Workers a Raise
Disney has reached a negotiating impasse with its "cast members" (workers) over a new contract. The company currently has a $15 per hour minimum salary that it reached after multiple years of $1 raises as part of the last contract between the company and its theme park workers.
Now, Disney has offered a similar deal with $1 annual raises, but the Service Trades Council Union (SCTU), which represents the theme park company's workers, overwhelmingly rejected that offer. The union is seeking an $18 per hour minimum wage largely based on how quickly the cost of housing has risen in Central Florida.
"Disney is proposing raises of $1 a year for most workers, but $1 is not enough to pay for the cost-of-living crisis that workers are facing in Central Florida. Rent and other expenses have skyrocketed, leaving workers in a state of emergency," the union shared in a statement.
Now, with Disney and the SCTU heading back to the bargaining table, Universal Studios has made a deal with its workers that might force Disney's hand.
"According to a memo from Universal Orlando Resort President & COO Karen Irwin, Universal Orlando will be increasing the base rate to $17/hr starting June 4, 2023," BlogMickey reported.
Universal May Cost Disney Big Bucks
The SCTU represents about 40,000 Disney "cast members," so every dollar per hour the union negotiates costs the Mouse House $320,000 a day, or $1.6 million a week (assuming workers work a 40-hour week). That's $83.2 million per year, per dollar -- a relatively tiny amount given the billions Disney takes in at its four Florida theme parks, but Universal's move likely set the floor between Disney and the union at $17 per hour.
Realistically, Disney World could make up $166.4 million per year (the cost of a $2 increase for 40,000 workers) by tweaking churro and popcorn prices. The numbers here are relatively small given that Disney's "Parks, Experiences, and Products" division, where Disney World is housed, brought in over $8.7 billion in revenue last quarter.
The issue, however, is that Disney has faced financial constraints that led to layoffs as it figures out its streaming services and deals with the changing nature of the movie business. A few hundred million dollars here or there is essentially tip money or pocket change to Walt Disney, but Universal's move to give its workers a raise will almost certainly force Disney to at least match its rival's offer -- an expenditure the company likely does not want to make while it's trying to get its financial house in order.
