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19th ANNUAL BEAR STEARNS MEDIA CONFERENCE
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GrimGhost
Member
I read this and I am wondering am I being to paranoid in thinking that this is a realistic possibility?
Unidentified audience member:
The investment desired rate of return today is roughly twice the multiple that your stock is trading at. I'm thinking of things like the ownership of the hotels, the ownership of 50,000 acres of land sitting in the middle of the state where you have created the value. Has any consideration been given to restructuring the ownership of the real estate without in any way affecting the operation of the business?
Bob Iger - President and CEO, The Walt Disney Company
The answer is yes. We do have thousands of acres of undeveloped land in Florida. We have actually divested some. Some of it or a fair amount of it is not capable of being developed because of environmental issues. We also look to protect the experience and the control of the land around our parks which I guess you can do in part of the deal terms you might enter into if you were to divest some of it, but I don't think the opportunities are as great. Selling the hotels we've also looked at. Again there are operational issues associated with that. The experience we create in the hotels, the way we are now integrating the operation of the hotels into the operation of the theme parks themselves has increased over time. Tom, maybe you want to address it further as you have looked more carefully at some of these deals than I have, so please stand up and be heard unless you feel I've covered it.
Unidentified audience member:
The investment desired rate of return today is roughly twice the multiple that your stock is trading at. I'm thinking of things like the ownership of the hotels, the ownership of 50,000 acres of land sitting in the middle of the state where you have created the value. Has any consideration been given to restructuring the ownership of the real estate without in any way affecting the operation of the business?
Bob Iger - President and CEO, The Walt Disney Company
The answer is yes. We do have thousands of acres of undeveloped land in Florida. We have actually divested some. Some of it or a fair amount of it is not capable of being developed because of environmental issues. We also look to protect the experience and the control of the land around our parks which I guess you can do in part of the deal terms you might enter into if you were to divest some of it, but I don't think the opportunities are as great. Selling the hotels we've also looked at. Again there are operational issues associated with that. The experience we create in the hotels, the way we are now integrating the operation of the hotels into the operation of the theme parks themselves has increased over time. Tom, maybe you want to address it further as you have looked more carefully at some of these deals than I have, so please stand up and be heard unless you feel I've covered it.
When Eisner first took over WDC in the mid 80's, they had considered selling the hotel portfolio to Marriott, and given Marriott the ability to build new hotels on property.
The was before the big hotel boom, when the only hotels that existed were Poly, Contemporary, and The Golf Resort.
The was before the big hotel boom, when the only hotels that existed were Poly, Contemporary, and The Golf Resort.
Doubtful....I think Iger's answer (above) said to the analyst "No....it would ruin the experience, and it would not be worth the problems it would cause.
All the analysts see is "they could sell these hard assets to a REIT, and not only make a ton of money doing so, but also increase their margin"