A Spirited Perfect Ten

[FigmentJedi]

Big Thunder Mountain comic is out today. Has that character they based off Tony Baxter pouring himself a drink in his very first scene.

 

[PhotoDave219]

Company stock buy backs are not as bad as people are making them out. They can have negative effects for some companies, but in reality, they are used to return money to shareholders.

Warren Buffet stated, "If a company buys back shares at above their intrinsic value, buybacks destroy shareholder value. If a company buys back shares at below their intrinsic value, buybacks create value for existing shareholders."

Disney shares are an incredible value right now. Disney should be buying as many shares as they are legally allowed. My gut feeling is, once Dis gets to $120-150 range there will be a split, which would cement Iger's legacy, and make shareholders ecstatic. That would be huge.

There are obvious negatives to share buy backs, ask Best Buy or Capital One, but I can't remember the last time Disney had a bad quarter, I would guess I don't think the Street does as well.

People can of course discuss this ad nauseum, but in Disney's case, this is a good thing. For now.

Why should I care about the Warren Buffet? There isnt even prime rib on it!

 

[Cesar R M]

I see no issue with WDI's ability to continue to over design. The string of projects everywhere but WDW reveal they don't have any problems with being able to still produce grade A attractions. Even NFL is over designed (but lacks substance).

Frankly WDI needs to be put on a leash sometimes, otherwise you get a 100 million dollar queue. Ya sure it's pretty, but did you really need textiles fashioned with diamonds and thibetan monk's tears in lieu of just a solid attraction?

No one seems to understand this better than OLC, who continue to pay more and more and yet receive less for their money out of WDI. Imagination doesn't need to be quashed, but there is nothing wrong with some boundaries.

well.. good old Walt had to fight to put GOLD on his castle.

 

[ford91exploder]

I see no issue with WDI's ability to continue to over design. The string of projects everywhere but WDW reveal they don't have any problems with being able to still produce grade A attractions. Even NFL is over designed (but lacks substance).

Frankly WDI needs to be put on a leash sometimes, otherwise you get a 100 million dollar queue. Ya sure it's pretty, but did you really need textiles fashioned with diamonds and thibetan monk's tears in lieu of just a solid attraction?

No one seems to understand this better than OLC, who continue to pay more and more and yet receive less for their money out of WDI. Imagination doesn't need to be quashed, but there is nothing wrong with some boundaries.

For a park that 'Gets Less' from WDI - why do their attractions blow away anything seen in the US parks...

 

[Cesar R M]

Big Thunder Mountain comic is out today. Has that character they based off Tony Baxter pouring himself a drink in his very first scene.

probably saying "those #$%#@$^# at management want me to build a 500 million attraction with 10, too old fo carp!" (read the last part in Danny Glover's voice)

 

[ford91exploder]

Company stock buy backs are not as bad as people are making them out. They can have negative effects for some companies, but in reality, they are used to return money to shareholders.

Warren Buffet stated, "If a company buys back shares at above their intrinsic value, buybacks destroy shareholder value. If a company buys back shares at below their intrinsic value, buybacks create value for existing shareholders."

Disney shares are an incredible value right now. Disney should be buying as many shares as they are legally allowed. My gut feeling is, once Dis gets to $120-150 range there will be a split, which would cement Iger's legacy, and make shareholders ecstatic. That would be huge.

There are obvious negatives to share buy backs, ask Best Buy or Capital One, but I can't remember the last time Disney had a bad quarter, I would guess I don't think the Street does as well.

People can of course discuss this ad nauseum, but in Disney's case, this is a good thing. For now.

Disagree It's been a bad thing for a long time - It has served only to inflate the EPS numbers while TWDC cuts CAPEX and expansion across all lines of business with the largest cuts in P&R.

 

[DVC91]

That's been fixed for quite a while now. I've seen it on all my most recent rides.

How long is a while? I was last there over NYE and it hasn't been working unless it was addressed during a refurb after that

 

[Nubs70]

Disagree It's been a bad thing for a long time - It has served only to inflate the EPS numbers while TWDC cuts CAPEX and expansion across all lines of business with the largest cuts in P&R.

Businesses have a financial physiology. Buy backs are fine when the company is a tad bit "overweight" and all departments are operating properly, including R&D.

Once the "fat" has been consumed, excessive buy backs begin to eat away at the muscle, then bone. Once into the bone, the company becomes unsound.

Will SDL mark the beginning of bone consupmtion?

Just a thought,

 

[PhotoDave219]

Clearly this is a microcosim of what goes on in american companies anymore. Its clearly going on everywhere, Disney is just where we are seeing it the most because, well, we're all Walt Disney World fans.

You have the financial guys who are looking to squeeze every dollar possible out for the highest profit possible. This begs the questions of "why" and "how much profits do you need?" These people are not interested in the long term sustainability of their financial returns. They want money NOW.

Meanwhile.... you have the creative types that are looking to build their companies. People who are interested more in the product and its experience rather than the simple bottom line.

Two giant problems with this, especially with an entertainment company. First, the cultures between the two groups are vastly different and have vastly differing goals. The creatives just do things differently and their creativity cannot be quantified on a balance sheet. (CBIDTA?) Second, these financial types wouldn't be caught dead setting foot in a theme park; not enough blow for them. They have no trouble adding additional hoops for guests to jump through and cutting guest services because they've never been a guest. It doesnt effect them so they really dont care.

The pendulum has swung too far in the financial direction much like it swung too far in the creative direction under Ron Miller.

This company needs a creative and financial balance, especially when it comes to theme parks.

 

[ford91exploder]

Businesses have a financial physiology. Buy backs are fine when the company is a tad bit "overweight" and all departments are operating properly, including R&D.

Once the "fat" has been consumed, excessive buy backs begin to eat away at the muscle, then bone. Once into the bone, the company becomes unsound.

Will SDL mark the beginning of bone consupmtion?

Just a thought,

Exactly buybacks are not intrinsically bad, If a company repurchases shares with excess cash during a market event where stocks are far undervalued it returns money to the shareholders and allows the company to sell those treasury shares at a profit when the market turns thereby generating cash for the business.

When it becomes harmful is when buybacks are done to inflate EPS and the company has ceased investing in the business and is focused on managing share price.

 

[GoofGoof]

Disagree It's been a bad thing for a long time - It has served only to inflate the EPS numbers while TWDC cuts CAPEX and expansion across all lines of business with the largest cuts in P&R.

Stock Buybacks are not inherently evil. They are a valuable tool in maintaining a proper capital allocation. In times when your stock price is undervalued it's a particularly valuable tool. They are also another way to return capital to shareholders. As an owner of the company you deserve to share in the good results. DIS has consistently kept their dividend yield around 1%. Shareholders want more than that returned to them. The key to all of this is a balance.

Are the most recent stock Buybacks excessive? In my opinion, yes. I don't agree that it's been a bad thing for DIS for a long time. Until the last couple of years DIS had a realtively conservative buyback program. Even under Iger.

 

[ford91exploder]

Stock Buybacks are not inherently evil. They are a valuable tool in maintaining a proper capital allocation. In times when your stock price is undervalued it's a particularly valuable tool. They are also another way to return capital to shareholders. As an owner of the company you deserve to share in the good results. DIS has consistently kept their dividend yield around 1%. Shareholders want more than that returned to them. The key to all of this is a balance.

Are the most recent stock Buybacks excessive? In my opinion, yes. I don't agree that it's been a bad thing for DIS for a long time. Until the last couple of years DIS had a realtively conservative buyback program. Even under Iger.

We can agree to disagree but @ParentsOf4 most recent buyback chart shows that the excessive buybacks started immediately after Iger took over, MDE DID have a buyback program but from the numbers he used it mainly when the market took a hit and it was a good time to purchase treasury shares where Iger is buying irrespective of price.

 

[GoofGoof]

Exactly buybacks are not intrinsically bad, If a company repurchases shares with excess cash during a market event where stocks are far undervalued it returns money to the shareholders and allows the company to sell those treasury shares at a profit when the market turns thereby generating cash for the business.

When it becomes harmful is when buybacks are done to inflate EPS and the company has ceased investing in the business and is focused on managing share price.

In the case of DIS they didn't resell treasury stock (which rarely happens anywhere) but they did use some of their repurchased shares to buy Pixar, Marvel and Lucas. If you were a Disney shareholder in 2004 before any of those acquisitions and you just held onto those shares you now own a larger percentage of TWDC (due to Buybacks) plus the revenue base was greatly expanded by those acquisitions. As a shareholder it's hard to be upset with the way things worked out.

 

[Mike S]

How long is a while? I was last there over NYE and it hasn't been working unless it was addressed during a refurb after that

Well I haven't been there this year yet but I can tell you all my trips last year it was working. Last I was there was November.

 

[flynnibus]

Blue Ocean Strategy is back
http://qz.com/366601/this-is-how-cirque-du-soleil-reinvented-the-circus/

And a decent readers digest version people might be able to relate to ... and understand it's not necessarily a 'bad word' even though it was painted as such and jumped on here.

 

[doctornick]

Second, these financial types wouldn't be caught dead setting foot in a theme park; not enough blow for them. They have no trouble adding additional hoops for guests to jump through and cutting guest services because they've never been a guest. It doesnt effect them so they really dont care.

You know, I've seen this sentiment before and it gets repeated a lot, but is there any reason to think it is true? Maybe its true for the actual leadership of Disney, but that's specific individuals. But if you take a group of financial types, surely some segment of them enjoy visiting theme parks. I don't think there's any intrinsic reason why business executives would de facto not like theme parks.

 

[PhotoDave219]

And a decent readers digest version people might be able to relate to ... and understand it's not necessarily a 'bad word' even though it was painted as such and jumped on here.

Blue Ocean works. And it could work at Disney, if Disney made the proper investments at the right time. But they didnt. And continue to drag their feet.

 

[tribbleorlfl]

I have been reluctant to post these last two link for fear of a flame war breaking out given the very sensitive subject matter. NPR's Fresh Air had an excellent episode on the treatment of Orcas at SeaWorld. Veteran Journalist Dave Davies, Terry Gross' DH if you will, interviewed former SeaWorld trainer John Hargrove, who appeared in the documentary "Blackfish" and has written a book about Ocras in captivity. While Hargrove is firmly against SeaWorld keeping Orcas in captivity, he doesn't come off as some raging a-hole from PETA, rather an individual with a deep knowledge and first hand experience base with these creatures. His conclusion is that present, he was not asked about the announced expansion to the Killer Whale tanks, methods of keeping Orcas in captivity fail to account for their established behavioral needs like children living with their mothers for the duration of the mom's remaining lifespan. Particularly appalling are allegations SeaWorld is forcing female Ocras to breed far younger than they would in the wild. Seeing that NPR is one of our last bastions of journalism, two senior individuals in charge of the Orca's care were interviewed as well to provide greater context.
http://www.npr.org/2015/03/23/39473...hare&utm_source=twitter.com&utm_medium=social

These interviews mark a key turning point in how SeaWorld addresses mistreatment of the Orcas at its parks, which Soup and Salad Sandra has covered this week in the Orlando Sentinel.
http://www.orlandosentinel.com/business/tourism/os-seaworld-repairing-brand-20150323-story.html

While I like NPR and Fresh Air, I would hardly call them an unbiased, "last bastion of journalism." They often will only present stories that support a particular narrative. If they present an alternative perspective, it's often a cursory and unbalanced exercise that leaves it clear to the listener what the "truth" is. (I'm thinking of the unrest in Furgeson, MO as a particular example).

As such, I heard the program last night and came off with the feeling the producers wanted to push Mr. Hargrove's book and the anti-SW position and only included the SW officials to provide the appearance of balance.

Hargrove has a history of inconsistent statements (The Real John Hargrove) and his media blitz and the excerpts from his book I have read all smack of an axe to grind towards SW rather than concern for the orcas. Or a desire to personally capitalize on the current negative perception of SW. Note, many former trainers have directly contradicted one of the main points he makes in the book (that SW directed trainers to withhold food to modify poor behavior and punish misperformance), a point that he himself dismissed 2 years ago. (The Truth Behind Blackfish).

 

[EPCOTCenterLover]

I couldn't agree more. I haven't seen the park as bad as you described, but it's no secret that it needs more high capacity attractions. There are plenty of options:

• New attraction in Adventureland... perhaps a 20K Leagues variant, evidently it belongs in Trader Sam's alongside Tiki Room, Jungle Cruise and Pirates content.
• Have an actual bridge/land connection to Tom Sawyer's Island, there's room for at least one ride
• Relocate it's a small world and/or the Tomorrowland Speedway. Use the additional real estate for more Fantasyland content.
• Start over in Tomorrowland. Nothing is safe.

I wouldn't be surprised if a Tomorrowland overhaul is coming, but realistically it would be 5-6 years away at the earliest given what else is in the pipeline. Sure, they could have $500-$1 billion projects all going on simultaneously in each park, but we've been conditioned to expect far less than that.

Do you mean like this aborted Adventureland project?

 

[ford91exploder]

And a decent readers digest version people might be able to relate to ... and understand it's not necessarily a 'bad word' even though it was painted as such and jumped on here.

It's DIsney's interpretation of 'Blue Ocean' which is flawed, Not Blue Ocean itself, DL and DCL were 'Blue Ocean' concepts. iTunes and iPhone were blue ocean concepts because of the seamless integration they were not just another smartphone and music service.

Disney thinks that Blue Ocean means that you can ignore your competition and feed your customers a stale product as long as you keep them in the 'WDW Bubble'