Universal is pausing construction of its Epic Universe theme park in Orlando as its parent company stands to lose $500 million in profits if the parks remain closed for the entire second quarter, Comcast executives said Thursday.
The new park was set to open in 2023, the company previously had disclosed, although Comcast CEO Brian Roberts did not say how much delaying construction would affect the project’s overall timeline.
Orange County Mayor Jerry Demings said senior Universal officials told him Wednesday the project would be delayed for a year.
“What they said to me was that their overall construction project is going to be delayed by a year, however, they’re going to continue with $300 plus million in construction that is really underway at this time,” Demings said Thursday. “In terms of the impact on our economy, there still would be a robust construction activity centered around that development itself.”
Universal spokesman Tom Schroder said Epic Universe’s delay gives contractors, vendors and Universal creative partners more flexibility to work together “within a changing environment.”
“This is about timing only. Our confidence in our business, our communities and our industry is as strong as ever. We will share more specifics as we move forward,” Schroder said in an emailed statement.
Roberts gave the update on Epic Universe during a first-quarter earnings call Thursday that showed Universal’s theme park revenue plunged 32% to $869 million compared to the same time period in 2019 when revenue hit nearly $1.3 billion.
Comcast, which owns NBCUniversal, shut down its Japanese park in late February followed by the U.S. parks in mid-March. Overall, Comcast posted $2.1 billion in net income, a 40% dip from 2019. Earnings per share were $0.46, down 40%.
If the parks remain closed through June, the theme park division could lose $500 million in profits, said chief financial officer Mike Cavanagh.
The company acknowledged they do not know when their theme parks will reopen again in the United States. Currently, Orange County and Florida leaders are meeting to discuss how Universal, Disney and other businesses can safely take in customers again. In Central Florida, as of Thursday’s latest counts, nearly 4,000 people have tested positive for the highly contagious virus while 126 have died from it.
The immediate priority will be safety, not pushing big attendance, Cavanagh stressed.
Roberts spoke of the theme parks’ strength, calling it one of Comcast’s moneymakers in the past decade.
“There is no doubt that our theme parks will reopen, and when they do, I believe we’ll benefit from strong pent-up demand,” Roberts said, calling them “historically resilient.”
Epic Universe comes as Universal invests heavily into its theme parks division to expand its footprint in Orlando in addition to Universal Studios Florida, Universal’s Islands of Adventure and the Volcano Bay water park.
In other Universal construction projects, the opening date for the highly anticipated Super Nintendo World in Japan is expected to be delayed by a few months. However, in China, Universal’s new Beijing park is “amazingly” on time and on budget to open in 2021, Roberts said.
Roberts assured investors the company is in a good position to navigate the coronavirus as it has more than $15 billion in liquidity. Like many companies, Comcast has raised money through debt offerings to have more cash on hand.
While the Universal Orlando hotels and parks remained closed, the company paid full wages to workers through April 19. Starting April 20, the company began paying 80% of their regular wages although it maintained health care coverage for those who already had it. Universal in Orlando employs about 25,000 people.
Starting Sunday, Universal Orlando part-time workers will get furloughed. Universal has pledged to automatically enroll them in Florida’s unemployment system, which has been burdened with payment delays and problems of employees struggling to access it.
Comcast has also committed $500 million to help its employees dealing with the hardship.
Walt Disney Co. and SeaWorld Entertainment are both expected to release their earnings next week.