If Disney buys out the rest of Disneyland Paris, will WDW be put back on the back burner?

[JimboJones123]

Just like it was during the DCA revival?

http://business.time.com/2012/08/24...siders-buyout-of-struggling-disneyland-paris/

 

[Turtle]

I think this sounds kind of selfish but I think Disney should focus A LOT more with all these great creative ideas to put them in the American parks.. Like after all WDW and DL are the marquee resorts yet the other ones have all these brand new e-tickets and ride systems while we only get clones from the other US park..

 

[JimboJones123]

Maybe it is just me, but it has been a LONG time since Everest.

It is still going to be a LONG time until Snow White's replacement gives WDW a new "non-dark ride" ride experience.

 

[JimboJones123]

And that comes as killing one dark ride and is essentially a glorified dark ride anyways.

 

[GoofGoof]

Sounds like Disney is looking to buy out their partners on the cheap. $120 million is a relatively small investment for the company as a whole. I just really, really, really hope they don't shift any of the resources potentially allocated to WDW to Paris. We waited patiently while they built cruise ships, DCA expansion, DVC and international parks. It's our turn now.

 

[yeti]

It sounds like they can't afford to put WDW on the 'back burner' at this point.

And before anyone asks, no, the Saudi prince isn't setting his sights on Central Florida.

 

[danlb_2000]

Sounds like Disney is looking to buy out their partners on the cheap. $120 million is a relatively small investment for the company as a whole. I just really, really, really hope they don't shift any of the resources potentially allocated to WDW to Paris. We waited patiently while they built cruise ships, DCA expansion, DVC and international parks. It's our turn now.

Note that the article says:

"the market value of the 23.4 million shares of the French company that Disney doesn’t own is about $120 million. However, Disney would certainly have to pay a premium over the market price."

so it would be more the $120 million.

 

[GoofGoof]

Note that the article says:

"the market value of the 23.4 million shares of the French company that Disney doesn’t own is about $120 million. However, Disney would certainly have to pay a premium over the market price."

so it would be more the $120 million.

My bad. So they give them a 20% premium $144M. A 30% premium $156M. And so on... My point was that the buy out is not a large investment compared to other recent projects like Carsland, FLE, Cruise ships, Aulani, or Avatarland. If they want to add significant rides to the parks that could cost a lot more and take away from investing in rides elsewhere.

 

[Lee]

The buyout of the shares wouldn't be a huge financial hit to the company.
However, taking on the debt load is another story. If I recall, it is running about €500mil right now (about $625mil).

 

[MichWolv]

My bad. So they give them a 20% premium $144M. A 30% premium $156M. And so on... My point was that the buy out is not a large investment compared to other recent projects like Carsland, FLE, Cruise ships, Aulani, or Avatarland. If they want to add significant rides to the parks that could cost a lot more and take away from investing in rides elsewhere.

Indeed, whatever the equity premium is for EuroDisney shareholders (like me!) would be a drop in the bucket for TWDC. The bigger nut is clearly the debt load, which is substantial. For now, that debt is serviced only by EuroDisney. After a buyout, it would show up on TWDC's balance sheet, and could (but not necessarily) wind up serviced by other parts of the company.

 

[GoofGoof]

Indeed, whatever the equity premium is for EuroDisney shareholders (like me!) would be a drop in the bucket for TWDC. The bigger nut is clearly the debt load, which is substantial. For now, that debt is serviced only by EuroDisney. After a buyout, it would show up on TWDC's balance sheet, and could (but not necessarily) wind up serviced by other parts of the company.

Or refinanced with Walt Diney Company as a guarantor. The debt service would be less costly if they refinance at a lower rate. I am sure that Walt Disney Company has a much lower cost of borrowing then EuroDisney does considering they had to restructure the debt several times. With a refinance it is also possible they would pay off part of the debt too so the total cash out the door could be higher than what they are paying for the equity. In the end if Disney Paris is a positive contributor to cash flow after paying their debt service going forward it would be a benefit to the company as a whole. If they plan a Carsland type expansion to boost earnings that $1 billion+ could be a huge drain on capital available for other parks (specifically WDW).

 

[MichWolv]

Or refinanced with Walt Diney Company as a guarantor. The debt service would be less costly if they refinance at a lower rate. I am sure that Walt Disney Company has a much lower cost of borrowing then EuroDisney does considering they had to restructure the debt several times. With a refinance it is also possible they would pay off part of the debt too so the total cash out the door could be higher than what they are paying for the equity. In the end if Disney Paris is a positive contributor to cash flow after paying their debt service going forward it would be a benefit to the company as a whole. If they plan a Carsland type expansion to boost earnings that $1 billion+ could be a huge drain on capital available for other parks (specifically WDW).

I wonder if Disney would sign on as a guarantor for the debt they don't already guarantee (I believe TWDC does back a line of credit for EuroDis already). After all, there's a reason they set it up as a separate non-controlled entity in the first place. We shall see.

 

[GoofGoof]

I wonder if Disney would sign on as a guarantor for the debt they don't already guarantee (I believe TWDC does back a line of credit for EuroDis already). After all, there's a reason they set it up as a separate non-controlled entity in the first place. We shall see.

No way would they do it now with only a 40% equity interest. If they take 100% equity interest and reduce the total debt for example from $600M to $300M and reduce the interest rate from 10% to 7% they could add another $35M to $40M of cash flow per year. They would have to probably bring the debt under the corporate Disney umbrella to get the rate down. I am making the debt and interest rate numbers numbers up for the sake of an example since I don't know the actual figures and this is just a theory. I haven't heard anything like this. Just reading that EuroDisney has a hard time operating under its current debt load and the only ways to reduce the debt load is to refinance at better rates or pay down part of the debt or both. Of course if they pay down $300M in debt and pay the shareholders $150M then they would be investing $450M total. Now we are in the FLE price range.

 

[td1129]

And that comes as killing one dark ride and is essentially a glorified dark ride anyways.

How is 7DMT a glorified dark ride? Please tell us more since it sounds like you've ridden it several times.

 

[td1129]

Sounds like Disney is looking to buy out their partners on the cheap. $120 million is a relatively small investment for the company as a whole. I just really, really, really hope they don't shift any of the resources potentially allocated to WDW to Paris. We waited patiently while they built cruise ships, DCA expansion, DVC and international parks. It's our turn now.

Lol at "patiently"

 

[WDW1974]

Did I miss the thread directly above which covers the same subject?

Or did everyone else?

 

[WDW1974]

I think this sounds kind of selfish but I think Disney should focus A LOT more with all these great creative ideas to put them in the American parks.. Like after all WDW and DL are the marquee resorts yet the other ones have all these brand new e-tickets and ride systems while we only get clones from the other US park..

That does sound selfish. And DL gets (and will be getting more) great stuff.

I think your issue is more with the staleness and crap added at WDW.

But I have visited every Disney park on the planet in the last 2 1/2 years, so I'm no relegated to the swamps.

 

[WDW1974]

The buyout of the shares wouldn't be a huge financial hit to the company.
However, taking on the debt load is another story. If I recall, it is running about €500mil right now (about $625mil).

That is correct. Just a start.

If all it would take is $120 million, then Disney would have owned the place before.

The issue is Euro Disney has defaulted on debt payments and the government has threatened to take over the resort and not give Disney any royalties/control etc.

Disney needs a buyer, so it might as well be them. The resort needs lots of work, so one would hope this paves the way for more. The hotels are just being refurbed for the first time in TWO DECADES!!!

 

[Californian Elitist]

I think this sounds kind of selfish but I think Disney should focus A LOT more with all these great creative ideas to put them in the American parks.. Like after all WDW and DL are the marquee resorts yet the other ones have all these brand new e-tickets and ride systems while we only get clones from the other US park..

Cars Land was a very creative idea and it was put in an American Disney park, not to mention the E-ticket that came with it.

 

[Turtle]

Cars Land was a very creative idea and it was put in an American Disney park, not to mention the E-ticket that came with it.

Haha I forgot about DCA when writing that.