80 billion injection, do we know how much is going to Asia?

[WoundedDreamer]

Bob Iger outright said Diney was planning around $60 billion of capex spending in the parks.


Iger also said that Disney was not planning right now on building parks in new cities.

You can see an article about this here.

Great link- I hadn't seen that discussion. Consistent with these public statements, I'm of the mindset that expanding Disney's footprint is not necessary currently. Disney has two resorts that are not major contributors to their bottom line. Both Paris and Hong Kong remain small players in terms of operating income. For years those two resorts have struggled to consistently stay profitable.

Once and for all turning the tide and growing these resorts into businesses with margins similar to Walt Disney World, Disneyland, and Tokyo Disneyland would represent a huge victory. The pathway seems clear. Walt Disney Studios Park needs even more investment. The current investment is a start, but Disney should be aiming to double attendance there. That will be tough, but doing it will transform Disneyland Paris forever. The significance of getting WDSP on the level of DCA or DHS/DAK cannot be overstated. This would have positive impacts on the hotels, Disney Village, and of course Parc Disneyland.

Then there is Hong Kong Disneyland. Think of Disney's announcement of 60 billion in investments being like a serve in a tennis match. Disney is signaling that they are ready to play a match. The ball will be in LegCo's court. If LegCo responds with a willingness to make HKDL the resort it always should have been, the future looks bright. I am sympathetic to LegCo's misgivings- the park's financial struggles at opening and the blow of Shanghai Disney still sting. But Disney is clearly ready to move things forward. Even if Disney devotes only 5% of its $60 Billion investment into HKDL, that would be 3 billion USD. Assuming an equal contribution from LegCo, that's $6 Billion in investment over the next ten years. And again, that is only 5% of the $60 Billion.

And then there is Shanghai. I am more and more convinced that Shanghai will have a new park by the end of the ten years. Disney and Shendi will have a 40% to 60% investment split (corresponding to their ownership share). If Disney invests 10% of the $60 Billion into Shanghai, that's $6 Billion USD. With Shendi's contribution, that would represent $15 Billion in total investments over the ten years. That's an investment substantially bigger than all the money Disney and Shendi have invested into the resort to date. Even if Disney moderated it down to 5% of the $60 Billion, we're still looking at $7 Billion invested over ten years.

Frankly, the last things an International Disney Park fan should want is a new resort. All that could do is divert funds away from improving the existing resorts. A new resort is exciting, but it would be a distraction. If Disney directs 20%-25% of the $60 Billion to Paris, Hong Kong, and Shanghai, those resorts will end the decade vastly improved and significantly more profitable. It's worth it!

My ideal breakdown would be 12.5% to Paris, 7.5% to Shanghai, 5% to HKDL. Paris gets the most since Disney is the sole owner. That would leave Disney $45 Billion to invest into the domestic parks and DCL.

 

[Supersnow84]

I wonder if LegCo would be interested in Disney putting forth more than a 1 to 1 investment for an expansion Disney thinks the park needs but LegCo can’t get public support for

It’s in Disneys best interest to make the park profitable but it can understand LegCo might struggle with actually getting public money

 

[cheezbat]

Honestly, $25 billion should be going to WDW. $10 billion should be going to Disneyland, $15 billion to Disneyland Paris, $5 billion to Hong Kong, and $5 billion to Shanghai.

WDW has so much that needs to be fixed…it’s the big moneymaker…it needs more attractions, so it needs more money.
Disneyland is in great shape and DL park is so jam packed…but DCA could use some more love and a Tomorrowland redo.
Disneyland Paris could use a new E-ticket and a few smaller attractions, but WDSP needs the most love.
Hong Kong doesn’t need as much since it’s just a single park and it’s only partially funded by Disney.
Same for Shanghai.

 

[Advisable Joseph]

Great link- I hadn't seen that discussion.

Quick correction: Iger wasn't necessarily the one who announced that there would be no new parks in new cities, but Disney did announce that, apparently.

 

[Haymarket]

Quick correction: Iger wasn't necessarily the one who announced that there would be no new parks in new cities, but Disney did announce that, apparently.

It's based on a statement seemingly attributable to Josh D'Amaro in the New York Times:

At the moment, Disney does not plan to build parks in new countries or cities. (In the past, the company looked at building a park in India, for instance, and expanding beyond Hong Kong and Shanghai in China.)

That said, I keep this, from the September 19 SEC filing, in mind:

I keep this in mind as well:

 

[WoundedDreamer]

Quick correction: Iger wasn't necessarily the one who announced that there would be no new parks in new cities, but Disney did announce that, apparently.

I wouldn't worry about that at all. The style of article that you were linking to is a type that includes deep access to The Walt Disney Company. It's clear they were able to discuss Disney Parks and Resorts with multiple executives. There are different types of journalism- sometimes adversarial and other times more collaborative. This article seemed like the collaborative type where Disney is opening up access to get its message out in exchange for the Times receiving a story.

An example of a similar story is the famous piece that Disney did 15 years ago when the redo of Disney California Adventure was announced (time flies ). If memory serves it was WSJ that received that scoop that time. You can rest assured that whoever said something was vetted- no one was shooting from the hip. If Iger didn't say it, he would have given the opportunity.

It's based on a statement seemingly attributable to Josh D'Amaro in the New York Times:

That said, I keep this, from the September 19 SEC filing, in mind:

View attachment 752355

I keep this in mind as well:

View attachment 752358

Remember the cautionary tale of Wang Jianlin, the founder of Wanda. Back when Shanghai Disneyland was nearing completion, Wang mocked Shendi and Disney with bellicose threats. He argued that Disney and Shendi were being foolish putting all their eggs into the one Shanghai Disneyland basket. While he acknowledged Disney and Shanghai's good work and significant investment, he felt his more numerous smaller parks spread all throughout the country was the better strategy. He explained, "one tiger is no match for a pack of wolves..." The tiger in this case was Shanghai Disneyland and the wolves were his Wanda Amusement Parks.

Years later Wanda would exit the amusement park business in humiliation. Shendi and Disney were right. Focusing on a single experience but ensuring world-class quality was better than building all around China. Shanghai Disney ended up attracting people from all over China because it was high quality. It wasn't necessary to build a Disneyland in every city because Disneyland is a destination worth travelling to.

That's not to argue there will never come a day when Disney decides to build a new resort in China. It is conceivable that Shanghai Disneyland and Hong Kong Disneyland might become too full for their own good. At that point it might make sense to build a new resort. But a new park would likely undercut Shanghai and Hong Kong in the short to medium term.

Plus, we know that LegCo was not pleased when they pursued Shanghai Disneyland. While Disney is already in partnership with both Hong Kong and Shanghai, like any good relationship Disney needs to stay on their partner's good side. There is no reason for Disney to be getting restless when it already has two good relationships. Shanghai and Hong Kong are both attractive partners. If they want to they could find other ways to spend their resources. Disney needs to keep them both friendly and willing to participate in massive expansion.

 

[Haymarket]

I wouldn't worry about that at all. The style of article that you were linking to is a type that includes deep access to The Walt Disney Company. It's clear they were able to discuss Disney Parks and Resorts with multiple executives. There are different types of journalism- sometimes adversarial and other times more collaborative. This article seemed like the collaborative type where Disney is opening up access to get its message out in exchange for the Times receiving a story.

An example of a similar story is the famous piece that Disney did 15 years ago when the redo of Disney California Adventure was announced (time flies ). If memory serves it was WSJ that received that scoop that time. You can rest assured that whoever said something was vetted- no one was shooting from the hip. If Iger didn't say it, he would have given the opportunity.

Remember the cautionary tale of Wang Jianlin, the founder of Wanda. Back when Shanghai Disneyland was nearing completion, Wang mocked Shendi and Disney with bellicose threats. He argued that Disney and Shendi were being foolish putting all their eggs into the one Shanghai Disneyland basket. While he acknowledged Disney and Shanghai's good work and significant investment, he felt his more numerous smaller parks spread all throughout the country was the better strategy. He explained, "one tiger is no match for a pack of wolves..." The tiger in this case was Shanghai Disneyland and the wolves were his Wanda Amusement Parks.

Years later Wanda would exit the amusement park business in humiliation. Shendi and Disney were right. Focusing on a single experience but ensuring world-class quality was better than building all around China. Shanghai Disney ended up attracting people from all over China because it was high quality. It wasn't necessary to build a Disneyland in every city because Disneyland is a destination worth travelling to.

That's not to argue there will never come a day when Disney decides to build a new resort in China. It is conceivable that Shanghai Disneyland and Hong Kong Disneyland might become too full for their own good. At that point it might make sense to build a new resort. But a new park would likely undercut Shanghai and Hong Kong in the short to medium term.

Plus, we know that LegCo was not pleased when they pursued Shanghai Disneyland. While Disney is already in partnership with both Hong Kong and Shanghai, like any good relationship Disney needs to stay on their partner's good side. There is no reason for Disney to be getting restless when it already has two good relationships. Shanghai and Hong Kong are both attractive partners. If they want to they could find other ways to spend their resources. Disney needs to keep them both friendly and willing to participate in massive expansion.

I was thinking Beijing, as it's equidistant to Shanghai as Hong Kong, but then I recalled that Universal has their successful huge resort there.