Why is construction still happening at Universal, but not Disney?

[lazyboy97o]

Every contractor I've ever worked with on a large project gets a down payment up front followed by progress payments and the final payment upon completion.

Universal’s ongoing projects are past the point of working off the initial down payment. Theme parks don’t use the typical design-bid-build project delivery with a stipulated sum. Elements of fast track and cost plus fees are very common.

 

[lazyboy97o]

We will never know. But a safe bet is that team Disney stops construction to evaluate what can be cut. They can't cut too much from epcot but they can downsize upcoming attractions.

That makes sense for projects that have not actually begun, but not ones much further along, especially Ratatouille.

 

[disney4life2008]

That makes sense for projects that have not actually begun, but not ones much further along, especially Ratatouille.

I think rat, Galaxy are good to go. What is likely to get shelved or delayed is spaceship earth which was to close in May. It's last day is May 20, 2020 and at this rate, for many of us the last time we rode was the last time. I suspect Disney will delay the closing until rat and Galaxy open.

 

[Giss Neric]

I'm really worried about the 50th Anniversary next year. With all the delays that will or might happen, it will significantly affect their original plans. It has only been a month or two so Universal continuing construction ain't a big deal. Now if these closures lasts for up to six months, then Universal will definitely be ahead.

Ratatouille, France expansion, Tron and Guardians will most likely all open next year although Fall 2020 would still be a possibility for the Rat and France. Harmonious is unlikely to happen this year since social distancing will still be implemented.

The only thing I could think of for Universal is their new Jurassic World rollercoaster which Im sure will be built quickly since it's just a rollercoaster. Secret Life of Pets attraction is supposed to be open now. I guess Epic Universe is their big one.

 

[DVCakaCarlF]

Every contractor I've ever worked with on a large project gets a down payment up front followed by progress payments and the final payment upon completion.

What do you consider large? No commercial construction is ever paid in advance...in my 11 years, I’ve never seen it. Work has to be in place, submitted for payment based on percentage of completion, approved by the architect, accepted by the owner, funded by the bank, and then paid out with 10% held back. There’s no way any of these parties release payment without some work in place.

 

[disney4life2008]

I'm really worried about the 50th Anniversary next year. With all the delays that will or might happen, it will significantly affect their original plans. It has only been a month or two so Universal continuing construction ain't a big deal. Now if these closures lasts for up to six months, then Universal will definitely be ahead.

Ratatouille, France expansion, Tron and Guardians will most likely all open next year although Fall 2020 would still be a possibility for the Rat and France. Harmonious is unlikely to happen this year since social distancing will still be implemented.

The only thing I could think of for Universal is their new Jurassic World rollercoaster which Im sure will be built quickly since it's just a rollercoaster. Secret Life of Pets attraction is supposed to be open now. I guess Epic Universe is their big one.

If we follow 2008 to 2011, universal will completely reimagine their parks and resort to directly compete against the 50th. The gold leaf on the castle will happen and tron. I don't think animal kingdom or Hollywood studios need anything, they have enough. Epcot is what is in most peril

 

[marni1971]

The truth is that the budgets for all of WDC have been blown to hell by this. Any income coming in at this time is a trickle of normal. Disney+ is not profitable at this time and is not projected to be for some time - which is normal for a newly launched product. The company is doing all that they can to do what is best for the company and all of their employees. There are a lot of people putting in extraordinarily hours working on budgets to do the right thing.

Mainly this. We may hear more soon.

 

[splashtest]

I could be wrong, but I don't think construction is going to stay down for much longer. Maybe they are reassessing what to concentrate on and push through those projects. I would imagine, Rat, Tron, and Galaxy will be all hands on deck to get done while their down. I can't see Disney not taking advantage of this down time at some point. I would think the castle will also be able to be painted much faster with no guests in the park. Fixing Rise should also be on their list too.....but who knows.

 

[lazyboy97o]

I could be wrong, but I don't think construction is going to stay down for much longer. Maybe they are reassessing what to concentrate on and push through those projects. I would imagine, Rat, Tron, and Galaxy will be all hands on deck to get done while their down. I can't see Disney not taking advantage of this down time at some point. I would think the castle will also be able to be painted much faster with no guests in the park. Fixing Rise should also be on their list too.....but who knows.

Disney has suspended all construction work. If they wanted to use the time to get stuff done then that is what they would be doing now. Disney is not there own contractor, so they can't move people who in different trades for different companies from something like the Communicore demolition to Guardians of the Galaxy to get it done faster. Ratatouille is nearly done, there is very little to reassess.

 

[Horizons '83]

The truth is that the budgets for all of WDC have been blown to hell by this. Any income coming in at this time is a trickle of normal. Disney+ is not profitable at this time and is not projected to be for some time - which is normal for a newly launched product. The company is doing all that they can to do what is best for the company and all of their employees. There are a lot of people putting in extraordinarily long hours working on budgets to do the right thing.

Having worked at a large corporation in their FP&A group, I can't imagine the hours their CAP EX folks and budget folks are putting in right now, particularly because the timeline keeps changing daily.

 

[splashtest]

Disney has suspended all construction work. If they wanted to use the time to get stuff done then that is what they would be doing now. Disney is not there own contractor, so they can't move people who in different trades for different companies from something like the Communicore demolition to Guardians of the Galaxy to get it done faster. Ratatouille is nearly done, there is very little to reassess.

That is not what I was saying. I understand all that. I know what stage all the projects are in. I am just saying that I don't believe that construction will continue to be halted until the park reopens. Florida has made construction projects exempt from the shutdown. I'd be willing to bet construction will resume before the month ends. That is all I was getting at. All Hands on deck may have been a bad phrase to use. I was simply stating they will chose to go forward with those project vs. the others for the time being.

 

[Seanual757]

That is not what I was saying. I understand all that. I know what stage all the projects are in. I am just saying that I don't believe that construction will continue to be halted until the park reopens. Florida has made construction projects exempt from the shutdown. I'd be willing to bet construction will resume before the month ends. That is all I was getting at. All Hands on deck may have been a bad phrase to use. I was simply stating they will chose to go forward with those project vs. the others for the time being.

I do not expect Disney to sit on the sidelines much longer the company I work for has already started delivering product to the universal construction jobs among other construction in the central Florida area we are busy.

 

[Josh Hendy]

Perhaps TWDC is waiting to see how the union negotiations are resolved, and are in extreme cash conservation mode until then.

At one point when the first CV-19 relief package was going through congress I read that one of the items being debated was an article which would give unions significantly more negotiating power. I don't know if that was passed ... and I didn't understand its significance until we heard Disney announce that it had a furlough plan "except for unionized staff which is still under negotiation".

Possibly beancounters at non-unionized Universal can allow construction to proceed with relative fiscal certainty whereas TWDC number crunchers cannot (yet).

 

[Coaster Lover]

Disney has other revenue streams such as Hulu, Disney+, and various other contracts and properties.

I would imagine that the revenue stream from Hulu and Disney+ is exceptionally small compared to the revenue stream Comcast has from it's cable/internet/mobile phone/home security bundle.

 

[SJN1279]

I think it is because Comcast still has a revenue stream coming in being America's largest internet provider. Where as Disney is pretty much dead in the water until things start moving again.

But both companies did the same thing they are doing now during the 2008 crash. Disney shelved everything and sat on their hands for 2 years while Universal built through the recession. By the time travel recovered in 2010, Universal had a sparkly brand new Potter land and WDW still had The Boarded Up Ghost Town Formerly Known As Pleasure Island. Universal gained 12% of the market share because of Disney's conservative philosophy. Looks like they are willing to let it happen again. Just over 2 years from now Universal is going to open a brand new expansion to their resort that will include a new theme park that is home to Super Nintendo World and 2 hotels. Is Disney going to counter that with a grassy field formerly known as Future World?

Only essential workers and businesses should be working now. This is the time to stay home, and stop the spread. I live in NJ, and it is beyond scary. I lost my mother to covid, and a lot of friends and neighbors are now infected. This goes way beyond a silly theme park competition.

I have lost some respect for Universal for having construction crews out there now.

 

[peter11435]

I would imagine that the revenue stream from Hulu and Disney+ is exceptionally small compared to the revenue stream Comcast has from it's cable/internet/mobile phone/home security bundle.

Correct. But on the plus side Disney does have other revenue streams besides streaming. Obviously that doesn’t replace what has been lost around the globe though.

 

[Rteetz]

People are trapped at home with their kids.
They will not be canceling their Disney+ subscriptions unless they absolutely have to...

I was more thinking about attracting a new subscriber not keeping an existing one.

 

[peter11435]

I was more thinking about attracting a new subscriber not keeping an existing one.

So far they have been doing pretty well adding new subscribers through this.

 

[KrazyKat]

I know Disney halted construction, but now would have been a good time to at least paint the castle or get as much of it done. One of the most popular photos taken at WDW is in front of the castle, which millions have. Kind of takes away the magic when you see lifts up there with people working.

 

[NelleBelle]

Maybe Disney is doing the right thing by halting construction instead of companies like Boeing that continued to send their employees to work until unfortunately some ended up dying from covid-19 I imagine some tools in construction likely get shared/passed around and might be difficult to fully clean. Or, it could be as others have mentioned, Disney’s historical “sitting on hands while Uni. gets ahead”??