News Star Wars: Galactic Starcruiser to permanently close this fall

[brettf22]

It's like you have zero knowledge of disney's track record with empty buildings.

What examples would you like to put forth? Most of their inactive spaces have kept up their serviceability quite high. Just because explorers could go around and find things 'frozen in time' doesn't mean buildings were rotting away.

Correct me if I’m wrong, but Disney did not tear down the half built and “abandoned” Pop Century Legendary Years buildings. The parts that were built sat for almost a decade, but were then repurposed for Art of Animation, correct?

 

[flynnibus]

Correct me if I’m wrong, but Disney did not tear down the half built and “abandoned” Pop Century Legendary Years buildings. The parts that were built sat for almost a decade, but were then repurposed for Art of Animation, correct?

For the 'legacy years' portion of Pop Century - they were only the concrete shells of some of the buildings and that project was still under construction when aborted. And yes, the shells were repurposed when Disney was out of the dark days and created Art of Animation on the property. A family suite still being two of the existing Pop sized rooms is no random coincidence there

 

[pdude81]

Sincere questions.

If they are taking tax write offs or write down or whatever they are calling it, they are not required to tear it down?

After taking the tax write offs or write down they can still reuse the building for a similar or same use?

They are just taking the depreciation early to save on taxes now versus later. They aren't writing it off or taking it off the balance sheet yet. I originally thought they were going to write it off and then knock down, but Josh D. has said they plan to do something with it in the future.

 

[Disstevefan1]

They are just taking the depreciation early to save on taxes now versus later. They aren't writing it off or taking it off the balance sheet yet. I originally thought they were going to write it off and then knock down, but Josh D. has said they plan to do something with it in the future.

oh yes I remember... JK

 

[pdude81]

oh yes I remember... JK
View attachment 736941

Temporarily closed often means it never comes back, but they did manage to sell out all remaining voyages after announcing the closure. Perhaps this could be more useful or profitable with limited cruises and possibly different missions. Not sure what they are thinking, but he could have just as easily kept quiet. So who knows.

 

[Disstevefan1]

Temporarily closed often means it never comes back, but they did manage to sell out all remaining voyages after announcing the closure. Perhaps this could be more useful or profitable with limited cruises and possibly different missions. Not sure what they are thinking, but he could have just as easily kept quiet. So who knows.

I for one am accustomed to Disney announcing or talking about things that they change or cancel, so to me it means nothing.

 

[MisterPenguin]

oh yes I remember... JK
View attachment 736941

Monster Shuttle Rallies!!!

 

[JoeCamel]

Temporarily closed often means it never comes back, but they did manage to sell out all remaining voyages after announcing the closure. Perhaps this could be more useful or profitable with limited cruises and possibly different missions. Not sure what they are thinking, but he could have just as easily kept quiet. So who knows.

A block of those remaining trips were allocated to Make-a-Wish

 

[SoFloMagic]

Sincere questions.

If they are taking tax write offs or write down or whatever they are calling it, they are not required to tear it down?

After taking the tax write offs or write down they can still reuse the building for a similar or same use?

I ain't no lawyer, but my understanding is you take annual depreciation on a building held for business purposes. You can accelerate that depreciation (take a tax refund, esentially) and take it in a shorter period if you choose. But then you can't depreciate the structure again, and if you sell it soon after, you're kinda screwed on taxes.

Again, not a tax pro and have no idea if this is 100% right, but may be helpful-ish

 

[flynnibus]

I ain't no lawyer, but my understanding is you take annual depreciation on a building held for business purposes. You can accelerate that depreciation (take a tax refund, esentially) and take it in a shorter period if you choose. But then you can't depreciate the structure again, and if you sell it soon after, you're kinda screwed on taxes.

Again, not a tax pro and have no idea if this is 100% right, but may be helpful-ish

Imagine the asset is more than the structure …

Lets say you invest 50M in a building.in another 100million in adding technology, research and assets in adding a “show” in that building…

They can write off the investment in the show as a loss and take accelerated depreciation on the capital assets in the show and things they capitalized… without necessarily writing off or depreciating the building itself.

Disney is likely taking years worth of technology and assets spent on developing and sustaining the show aspect and putting all those in a bucket being treated as fodder to improve short term reporting.

 

[JoeCamel]

Imagine the asset is more than the structure …

Lets say you invest 50M in a building.in another 100million in adding technology, research and assets in adding a “show” in that building…

They can write off the investment in the show as a loss and take accelerated depreciation on the capital assets in the show and things they capitalized… without necessarily writing off or depreciating the building itself.

Disney is likely taking years worth of technology and assets spent on developing and sustaining the show aspect and putting all those in a bucket being treated as fodder to improve short term reporting.

Are they taking lost expected income as depreciation though?

 

[splah]

Are they taking lost expected income as depreciation though?

expected income is just that, expected, there is nothing to write-off.

Depreciation is the cost of using an asset. it is a non-cash expense used to approximate the wear/tear/reusability of an asset tangible or non-tangible. and over time it reduces the value of the asset. tax depreciation is a wildly different animal than financial statement depreciation and includes "bonus" depreciation that the government allows to encourage capital investment

 

[flynnibus]

Are they taking lost expected income as depreciation though?

No - depreciation is for capital assets. Think finite goods with a service lifetime. Most common to understand concepts would be like a car, a TV, a multi-media computing farm But they can be intangible assets too, like Intellectual Property, trademarks, etc.

Depreciation is able get a tax deduction for the spending you put into that.. normally taken over an agreed upon length of time that matches the usual serviceable life of the asset. But in this case, Disney is taking an accelerated depreciation schedule because they want all the tax reducing advantage NOW to help with FY2023 woes.

Additionally you have write downs or full write-offs... which is when you change what was the expected value of an asset was. You basically are devaluing something to reduce your taxable assets. An extreme, but over simplified example would be you spent $100 million to build an awesome TV Antenna facility. Then, TVs became antiquated and no one needs your awesome facility anymore, and you don't expect it to generate any revenue. So as the business sees this facility will never make them any future money, it's not really worth a $100million asset anymore, so they will look to write it down (reduce its value) or try to write it off (eliminate its value). In doing so they reduce their taxable assets.. and in turn their tax liability.

So in Disney's case... they can be taking advantage of lower tax liability RIGHT NOW with the advanced depreciation and lowering their taxable assets by writing down the value of the assets they have accumulated to support and operate this thing. That could be intellectual property, it could be investments in patents, technology, R&D, product, inventory, spares, the improved space, etc.

 

[TheIceBaron]

No - depreciation is for capital assets. Think finite goods with a service lifetime. Most common to understand concepts would be like a car, a TV, a multi-media computing farm But they can be intangible assets too, like Intellectual Property, trademarks, etc.

Not to be that guy, (used to practice tax law) but intellectual property is covered under the concept of amortization which has slightly different rules than depreciation. For example here the starcruiser building will be depreciated while the concept and software used for the starcruiser experience won’t necessarily be lumped in with that.

 

[flynnibus]

Not to be that guy, (used to practice tax law) but intellectual property is covered under the concept of amortization which has slightly different rules than depreciation. For example here the starcruiser building will be depreciated while the concept and software used for the starcruiser experience won’t necessarily be lumped in with that.

True - specifically about the difference of the handling of the capital asset in terms of accelleration or not. But those intangible assets they accrued and developed can still be written down or off right? Which is what I was trying to cover with my line here: "So in Disney's case... they can be taking advantage of lower tax liability RIGHT NOW with the advanced depreciation and lowering their taxable assets by writing down the value of the assets they have accumulated to support and operate this thing"

 

[Nubs70]

Some choose not to play the edges and just be straight up. You sleep better at night

Maximum opportunity exists at the edges.

 

[SamusAranX]

Our tax system is wild

 

[Comped]

Has the merch started to hit the character warehouse yet?

 

[TrainsOfDisney]

It's just like some of the content they pulled from streaming.. it's not that there isn't any value there, it's that the value of the tax advantage RIGHT NOW far outweighs the lesser value the 'use' has. So it's advantageous to the company to NOT use it for now.

The question for both of these would be… is the damage to your brand image worth it?

Admitting your brand new star wars hotel was a mistake seems like a bad idea for both the public and the investors. It’s a short term decision that sets a dangerous precedent.

What happens next time they need a money bump? Let’s close whatever attraction gives us the biggest tax write off?

 

[twilight mitsuk]

Just sell off Star Wars and marvel completely