It appears that the Disney Investor Day seemed to indicate that Disney+ is the short-term focus for Disney. With billions upon billions being invested into Disney+, I am assuming that the parks are not going to get much in the future. This is surprising to me because of how WDW's 50th anniversary is coming up and it seems that Disney is doing it on the cheap. Of course, we will have a few new attractions on the way, but I don't see too much of the typical "special" things coming to WDW like how DLR got Paint the Night for their 60th. I assume that when things get back to normal WDW will be making some quick moves to make the 50th special. What do you guys think?
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Parks are Taking a Back Seat?
- Thread starter Michael T
- Start date
tl77
Well-Known Member
The Parks have been taking a back to Films for 25 years or more. Before 1990 The Walt Disney Company's biggest product was the Parks, so they focused on them a lot, the 15th 20th and 25th anniversary were huge celebrations at WDW, but as the started having more hit films, and really focused of merchandising, the parks have become less of a priority company wide. Unfortunately I feel like they will "limp along" in the parks division as long as they can
josephe814
New Member
It’s not surprising at all. Great article to explain it: https://www.themeparkinsider.com/flume/202012/7909/
Disney+ will provide the huge profits necessary to build lots of things in the parks.
Seems as if they are going all-in. I fear the cuts that will come with it. It feels like Disney is going all-in with media part 2.
kap91
Well-Known Member
The parks haven't been seen as the main business for a while...and as long as there's a pandemic and they're in crisis mode they'll continue to take a backseat. I wouldn't expect to see much investment aside from what's already in progress for several years as they try to recoup their losses and reevaluate strategy to make sure they don't end up in this position again.
Disney actually just took over all of Disneyland Paris. Hong Kong was always a partnership and Tokyo was always a licensing dead. As the economy recovers and Disney's streaming follow the plan, from 2023 onward Disney will have record profits and have more than enough money to invest in the parks, movies, television shows, and other investments. 2020 was the worst year the world experienced since 1918 and to expect no cuts in parks expansion and to pay every cast member while having major cuts to revenues is just crazy. Disney needed to make cuts.
Goofyernmost
Well-Known Member
It has already been said, but it is my opinion that there is a common misconception that the parks are the cash cow of Disney. Bob Iger has taken tons of criticism because he has not put all his focus on the parks. Instead he focused on other things like ESPN and buying other IP's and making them a part of Disney. Park lovers see that as treason, but in reality it is one of the wisest things anyone could do. He has, by his acquisitions strengthened Disney's power and security. Movies have a high risk factor. They can make all kinds of money or break the bank, but the parks are stable, or at least have been, as an added income source, but they also are one of the largest expenses that Disney has. The massive payroll required to operate those parks, the need for maintenance and upgrade to keep the park presentable and the degree of hassle coming from fans 7 days a week, 365 days of the year is a total PITA. We tend to look at Disney as just the parks when it is a massive corporation with vast numbers of holdings that require attention. We are in a unique time right now and it is mind boggling what people feel Disney should be doing with only one of their domestic parks working at around 35% capacity after about a 6 months shutdown and the need to not have shows that force a huge crowding problem and another park that hasn't been able to pick up a nickel in gate fees since last April. Can any of us even fathom how much revenue has been lost over the last 9 pandemic months just in this country. It was and still is the acquisitions that Iger made that are keeping the company from folding. If all they still had were the parks going into this even Disney might have folded their tent by now.
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Trackmaster
Well-Known Member
The good news is that you don't really need a lot of money to make a great park. You can spend $100M on a flop or you can spend $25M on an awesome ride. Its about execution and actually committing to rides and not just nonsense to get to buy a theme park ticket for the sole purpose of buying stuff. If Disney+ gets big, its not a death blow for the parks. It'll create opportunities for the parks to cross market with the IPs from the service and use Disney+ to market the parks. I think a bigger problem would have been Disney losing like crazy among all segments and having to liquidate and slash fast out of immediate necessity... like the SEAS parks. The parks might take a backseat, but they won't be completely forgotten.
JIMINYCR
Well-Known Member
Business is business and all businesses are scrambling to keep their heads above water. Disney has to focus on whats working now and whats showing improving, consistent, money intake happens to be Disney+. If they keep the cash flow coming eventually things will slowly trickle down to the parks. Parks have never really been a huge priority of "Where can we put the cash for the best return", so I wont be expecting it to change that much even when we get back to normalcy.
Trackmaster
Well-Known Member
Make no mistake, Disney+ is nowhere near making a profit, and it may not be profitable for years... if ever. The success behind Disney+ has been it jacking the stock price up, not necessarily the profit/loss statement. Basically, in layman terms, investors have speculating profits years down the road, and the current profitability is irrelevant.
Facebook, Google, Amazon have never turned profits. They make their money and have high valuations from rounds of investments and speculation that's driven the stock price up. Also why they never really have to pay taxes. No profit to tax.
The question is not does Disney+ make a profit. The correct question is, "Does Disney+ pay more to the Disney owned Studios than they received from Netflix and is that bigger than the loss applied to Disney+." You need to look at the actual bottom line of The Walt Disney Company and not the profit or loss of one Division. I have tried to explain this many times and it is a difficult concept but one that investors need to understand. Put another way, Disney Plus could be very profitable but if it didn't pay the Studios anything for their content, the company could be losing money on their bottom line.
Trackmaster
Well-Known Member
The bottom line (pardon the pun) is that the bottom line doesn't really matter these days. What matters is valuation and stock price. And yes, I'm sure that the finance department and outside investors have their own metrics for determining the contributions that segments are making.
So at this point, there's three concepts that matter:
Cash Flow
Net Income
Stock Price/Company Valuation
Really the last one is the most important, but ultimately the other two have their merits as well. Cash flow is so important for many smaller businesses, but I imagine that if they really needed to Disney could generate a lot of cash very quickly through thousands of methods, so that's not really that important to them at this point.
Good points made. I would say that, in my opinion, Iger was a far better CEO than Eisner because of the additions to the parks, not just the purchases that he made for TWDC. He gave us a lot. I just fear that under Chapek we will see more and more cuts. Iger gave us so much.
Goofyernmost
Well-Known Member
I suppose that there is a possibility, but, Iger really hasn't left and Chapek still works for him in reality. We will just have to wait and see, post Pandemic.
Brer Panther
Well-Known Member
Plus, a lot of projects that were in the works for the parks were apparently put on hold because of the Splash Mountain retheme nobody wanted until 2020. So...
WondersOfLife
Blink, blink. Breathe, breathe. Day in, day out.
I mean, I'd be lying if I didn't just spend $70 on the year subscription for Disney+.