Here's the transcript from Q2 in which they were already dealing with a quarter with the domestic parks closed for 2 weeks, and by the time of the call, 2 months.
Pertinent for this call is the metric Chapek set for opening the parks:
Question: I wonder if you could tell us or speak generally about what capacity you guys can operate at the park profitably? And we assume, obviously, when you do open -which I know is very fluid and we can't pinpoint that right now in terms of domestic opening... just trying to get a sense of what sort of capacity you think could still sort of get you to breakeven or profitability?
Chapek: ..in terms of how we look at our park reopenings and what hurdle we need to make to have it make sense -we actually look at it as a positive net contribution to overhead and profit. In other words, it's not about breakeven point for profitability necessarily,but just making a positive contribution at the net contribution level. So what we're thinking is that while every site is completely different, that's the approach that we're going to take. And frankly, we would not reopen any park unless we can make at least a positive contribution to that overhead and operating profit level.
Question: I wonder, for Bob Chapek, how do you staff the parks in anticipation of an opening? What signals do you look for? And what drives your optimization? Is it the number of... does basically the experience you want to have,measure up to a park full opening? So any type of signals, any type of history you have to staff up in anticipation of an opening?
Chapek: In terms of the signals we look for park opening, our hypothesis is because of pent-up demand that if we open up, it's something less than 50% of our standard capacity that we're probably not going to have trouble filling that. So whatever level we state that at, whether it's 10%, 25% or 50% of typical crowds, that's what we'll be able to have at our park. Therefore, we'll staff accordingly to that type of level, whatever that level will be eventually.In terms of optimization and sort of how we'll approach that. Obviously, labor is a huge component of our cost base. And so that will slide with the attendance. And that's why I said when we're looking at the decisions for what that level would be inside the parks and what we're going to be targeting for, it's really looked at as a contribution to net contribution and profit as opposed to saying that we're goingto sort of cover the entirety or not. Therefore, that gives us the ability to make our decisions on a variable basis and keep as much of that cost structure variable as possible. Obviously, we'll practice the yield strategy overall, just like we always have.
And as always, you can get a Bingo when someone from Wall Street asks (i.e., suggests) about forgoing the theatrical window and instead bring movies direct to VoD. Only this time, the question would be actually pertinent given the closure of theaters.
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