Will Disney Go Bankrupt?
Could Disney, the House of Mouse, actually go bankrupt in 2025, leaving Mickey’s wallet emptier than a deserted Magic Kingdom? With a market capitalization of $156 billion and $45 billion in debt, Disney’s financial health is under scrutiny.
Despite a recent 1.4 million subscriber boost for Disney+ (bringing its total to 126 million), the company’s history of near-financial disasters and current challenges raise eyebrows. From streaming losses to asset sales, let’s explore whether Disney could face a Magic Kingdom meltdown, what might trigger it, and what happens if the fairy tale ends.
Is Bankruptcy Plausible for a Giant Like Disney?
Disney’s sheer size makes bankruptcy seem like a far-fetched plot twist, but it’s not impossible. Macroaxis pegs Disney’s probability of bankruptcy at 19%, which is 63.19% lower than the entertainment sector average but still higher than the communication services industry. This 19% isn’t a prediction of actual bankruptcy—Macroaxis clarifies it’s not about filing for Chapter 7 or 11, but rather a measure of financial distress risk.
Disney’s diversified portfolio—theme parks, movies, streaming, ESPN—and strong brand value provide a buffer. However, with $45 billion in debt and ongoing streaming losses, a perfect storm of mismanagement, market shifts, or economic downturns could push Disney into insolvency.
Scenarios That Could Trigger a Disney Downfall
Several scenarios could tip Disney into financial peril.
First, its streaming business, despite Disney+’s recent subscriber gain, continues to lose money. If subscriber growth stalls again or if Netflix and other competitors dominate, those losses could deepen.
Second, a global recession could slash theme park revenue, which accounts for 37% of Disney’s income.
Third, CEO Bob Iger’s plan to sell legacy media assets like ABC could backfire. Such sales might trigger change-of-control provisions, forcing contract renegotiations and weakening ESPN’s position in sports broadcasting.
Add in a PR disaster—like the backlash over Iger’s 2023 strike comments—or a flop as big as Mufasa: The Lion King (which underperformed with $121 million against a $200 million budget), and Disney’s debt could quickly snowball.
Possible Outcomes: Asset Sales or a Full Shutdown?
If Disney were to face insolvency, the most likely outcome would be asset sales. Offloading declining networks like ABC or Freeform could reduce debt, a move Iger has already considered. This would help buffer streaming losses, but risks weakening Disney’s overall media footprint, especially around ESPN.
A more drastic option would be Chapter 11 bankruptcy, allowing debt restructuring while operations continue. A total shutdown—Chapter 7 liquidation—is highly unlikely. Disney’s theme parks alone generated $32.5 billion in 2024, making the company an attractive acquisition target.
Any significant stumble would more likely result in a merger or acquisition by a media giant like Comcast or Apple than a complete corporate extinction.
Disney’s Near Brushes with Financial Disaster
Disney has faced financial peril before. During World War II, the company nearly folded due to plummeting cinema attendance and frozen productions. The 1941 animators’ strike further strained resources. Even after Cinderella’s 1950 success, debt lingered.
More recently, the COVID-19 pandemic in 2020 caused a $4.7 billion quarterly loss, forcing furloughs and park closures. The company leaned into streaming and reopened parks to weather the storm. These close calls show that Disney has resilience—but also that even titans can stumble.
Could Disney Actually Lose It All?
So, could Disney truly collapse in 2025? Probably not. The 19% bankruptcy probability is a caution flag, not a countdown.
Recent earnings, buoyed by Disney+’s subscriber growth, show some positive momentum. Theme parks continue to be strong earners, and Disney’s intellectual property—Marvel, Star Wars, Pixar—remains globally dominant. But the risks are real. Missteps in asset sales, a faltering economy, or further streaming losses could force restructuring.
Still, a total shutdown seems more fantasy than reality. Disney may be wobbling on the financial tightrope, but the safety net of brand power and diversified assets is strong enough to catch it—for now.
News compiled and edited by Ivy Adams for Prates & Princesses
Sources:
CNBC, "Disney asset sales won’t break the bank, but they will move legacy media forward," September 17, 2023
CNBC, "Disney shares climb 10% on surprise uptick in streaming subscribers, earnings beat," May 7, 2025
Macroaxis, "Disney Probability Of Bankruptcy | (NYSE:DIS)," February 12, 2025
Statista, "Distribution of Walt Disney Company’s revenue from 2010 to 2024, by operating segment," accessed May 8, 2025
Box Office Mojo, "Mufasa: The Lion King (2024)," accessed May 8, 2025
King’s Business Review, "From Near Bankruptcy to Box Office Blasts: How Disney Defied The Odds for 100 years!" October 14, 2023
Variety, "Disney Reports $4.7 Billion Quarterly Loss Due to Coronavirus Pandemic," August 4, 2020