A Spirited Perfect Ten

[ParentsOf4]

I had to highlight this bizarre exchange regarding MyMagic+ during the earnings call.

Question from Alexia Quadrani, an analyst at JP Morgan:

It seems like MyMagic+ has really improved capacity at Disney World. And you've had a number of record attendance quarters lately. I guess how much can you continue to see those gains? And any color on how international visitors may have trended in the quarter?
​

Answer from CEO Bob Iger:

Sure, Alexia. So as you know that MyMagic+ has had an impact, especially as we've now started to anniversary the startup costs that we had there. And it really is integrated into the total Walt Disney World guest experience. So it's difficult to say just how much it contributed because it's so integrated, but it clearly was a contributor to results.

We've got roughly half of our guests now entering the parks with Magic Bands and the response from those guests has been overwhelmingly positive. So we are very pleased with that.

My Magic Band -- or MyMagic+ as a driver going forward, will still be a factor, but perhaps not with as great an impact as we've seen just in this quarter. Again, as it becomes even more integrated into the base experience.

Looking forward, I think that we're most excited about what we see in terms of the prospects outside of the United States, with the opening of Shanghai Disney Resort next year, and that should drive growth well into the future.

Having said that, though, we saw strong international attendance this year at our domestic parks. There's no question that those results have been strong. And the top line growth, coupled with the close mining of the expense line, has resulted in strong growth and we hope to see our results continue there.
​

Huh?

Last quarter, Iger reported:

We did see in the quarter a positive impact to the bottom line from MyMagic+, just the beginnings of it. We will continue to see more of that. But we do not have data that we can share with you right now about specific guest spending.​

More than 2 years after Staggs introduced MyMagic+ to the public, Disney was seeing "just the beginnings of" "a positive impact to the bottom line from MyMagic+." Yet, as Iger said pretty much every quarter before that, "But we do not have data that we can share with you right now."

This quarter, Iger reports "So as you know that MyMagic+ has had an impact, especially as we've now started to anniversary the startup costs that we had there." So as I mentioned in my earlier post about P&R's expenses and quoting from Disney's 10Q:

The decrease in infrastructure costs reflected higher costs in the prior-year quarter in connection with the launch of MyMagic+​

In other words, Iger is echoing what's in the 10Q, which is that the only financial 'improvement' from MyMagic+ occurred because they don't have rollout costs anymore. More than a year after they first started making MyMagic+ available to Guests, I sure hope not.

Then we get the even more bizarre:

MyMagic+ as a driver going forward, will still be a factor, but perhaps not with as great an impact as we've seen just in this quarter.​

WHAT????!!!!!

Last quarter, you reported "just the beginnings of" "a positive impact to the bottom line from MyMagic+." This quarter you reported that MyMagic+'s 'improvement' was the result of an absence of "startup costs" while, at the same time, stated that MyMagic+ "will still be a factor, perhaps not with as great an impact as we've seen just in this quarter."

But the only "impact" you reported this quarter was that you stopped throwing money at MyMagic+!

Now you're telling us that in the future, MyMagic+ "will still be a factor, perhaps not with as great an impact" as the quarter that you just stopped throwing money at it!

I don't curse on these threads but I was tempted to write one when I read this double-speak.

Then we get this strange statement from Iger:

So it's difficult to say just how much it contributed because it's so integrated, but it clearly was a contributor to results.​

During numerous earnings calls you've been telling us about all these great metrics that show that MyMagic+ is 'working', even though you don't want to discuss them with us. Now you are sure that "it clearly was a contributor to results" even though "it's difficult to say just how much it contributed."

What about all those great metrics you kept hinting at? How the heck do you know it "clearly was a contributor" if it's "difficult to say just how much it contributed?"

"Our wide receiver played a great game even though he didn't catch a pass or make a downfield block. But he clearly was a contributor."

Oh, and then Iger follows up that gem with essentially "Let's talk about Shanghai instead (even though you didn't ask about it) because I don't want to talk about MyMagic+ anymore."

I hate to say it because I really wanted to wait for Iger's great announcement that MyMagic+ was a rousing success, but if this is the best we're going to get, then it's time to declare MyMagic+ a financial failure.

 

[bhg469]

Oh, and I just had to highlight this bizarre exchange regarding MyMagic+ during the earnings call.

Question from Alexia Quadrani, an analyst at JP Morgan:

It seems like MyMagic+ has really improved capacity at Disney World. And you've had a number of record attendance quarters lately. I guess how much can you continue to see those gains? And any color on how international visitors may have trended in the quarter?
​

Answer from CEO Bob Iger:

Sure, Alexia. So as you know that MyMagic+ has had an impact, especially as we've now started to anniversary the startup costs that we had there. And it really is integrated into the total Walt Disney World guest experience. So it's difficult to say just how much it contributed because it's so integrated, but it clearly was a contributor to results.

We've got roughly half of our guests now entering the parks with Magic Bands and the response from those guests has been overwhelmingly positive. So we are very pleased with that.

My Magic Band -- or MyMagic+ as a driver going forward, will still be a factor, but perhaps not with as great an impact as we've seen just in this quarter. Again, as it becomes even more integrated into the base experience.

Looking forward, I think that we're most excited about what we see in terms of the prospects outside of the United States, with the opening of Shanghai Disney Resort next year, and that should drive growth well into the future.

Having said that, though, we saw strong international attendance this year at our domestic parks. There's no question that those results have been strong. And the top line growth, coupled with the close mining of the expense line, has resulted in strong growth and we hope to see our results continue there.
​

Huh?

Last quarter, Iger reported:

We did see in the quarter a positive impact to the bottom line from MyMagic+, just the beginnings of it. We will continue to see more of that. But we do not have data that we can share with you right now about specific guest spending.​

More than 2 years after Staggs introduced MyMagic+ to the public, Disney was seeing "just the beginnings of" "a positive impact to the bottom line from MyMagic+." Yet, as Iger said pretty much every quarter before that, "But we do not have data that we can share with you right now."

This quarter, Iger reports "So as you know that MyMagic+ has had an impact, especially as we've now started to anniversary the startup costs that we had there." So as I mentioned in my earlier post about P&R's expenses and quoting Disney's 10K:

The decrease in infrastructure costs reflected higher costs in the prior-year quarter in connection with the launch of MyMagic+​

In other words, Iger is echoing what's in the 10K, which is that the only financial 'improvement' from MyMagic+ occurred because they don't have rollout costs anymore. More than a year since they first started making MyMagic+ available to Guests, I sure hope not.

But then we get the even more bizarre:

MyMagic+ as a driver going forward, will still be a factor, but perhaps not with as great an impact as we've seen just in this quarter.​

WHAT????!!!!!

Last quarter, you reported "just the beginnings of" "a positive impact to the bottom line from MyMagic+." This quarter you report that MyMagic+ 'improvement' was the result of an absence of launch costs while, at the same time, stating that MyMagic+ will "perhaps not with as great an impact as we've seen just in this quarter."

But the only "impact" you reported this quarter was that you stopped throwing money at it!

Now you're telling us, that in the future MyMagic+ will "perhaps not with as great an impact" as the quarter that you just stopped throwing money at MyMagic+.

I don't curse on these threads but I was tempted to write one when I read this double-speak.

And, of course, we get use usual disclaimer from Iger that we hear at every earnings call:

So it's difficult to say just how much it contributed because it's so integrated, but it clearly was a contributor to results.​

For years you've been telling us about all these great metrics that show that MyMagic+ is 'working', even though you don't want to discuss them with us. Now you are sure that "it clearly was a contributor to results" even though "it's difficult to say just how much it contributed."

What about all those great metrics you kept hinting at? How the heck do you know it "clearly was a contributor" if it's "difficult to say just how much it contributed?"

"Our wide receiver played a great game even though he didn't catch a pass or make a downfield block. But I'm sure he clearly was a contributor."

Oh, and then Iger follows up that gem with essentially "Let's then talk about Shanghai instead because I don't want to talk about MyMagic+ anymore."

I hate to say it because I really wanted to wait for Iger's great announcement that MyMagic+ was a rousing success, but if this is the best we're going to get, then it's time to declare MyMagic+ a financial failure.

This is some next level observation man! Bravo!

 

[GoofGoof]

But it fits right with Universal's strategy of getting just a little bit more. They're not emulating Disney's [current] "all or nothing" view.

Maybe so. I still think they need a 3rd gate before expanding to 15,000 hotel rooms. The last thing we need is another Orlando resort that was in the theme park business that's now in the hotel business.

 

[PhotoDave219]

Oh, and I just had to highlight this bizarre exchange regarding MyMagic+ during the earnings call.

Question from Alexia Quadrani, an analyst at JP Morgan:

It seems like MyMagic+ has really improved capacity at Disney World. And you've had a number of record attendance quarters lately. I guess how much can you continue to see those gains? And any color on how international visitors may have trended in the quarter?
​

Answer from CEO Bob Iger:

Sure, Alexia. So as you know that MyMagic+ has had an impact, especially as we've now started to anniversary the startup costs that we had there. And it really is integrated into the total Walt Disney World guest experience. So it's difficult to say just how much it contributed because it's so integrated, but it clearly was a contributor to results.

We've got roughly half of our guests now entering the parks with Magic Bands and the response from those guests has been overwhelmingly positive. So we are very pleased with that.

My Magic Band -- or MyMagic+ as a driver going forward, will still be a factor, but perhaps not with as great an impact as we've seen just in this quarter. Again, as it becomes even more integrated into the base experience.

Looking forward, I think that we're most excited about what we see in terms of the prospects outside of the United States, with the opening of Shanghai Disney Resort next year, and that should drive growth well into the future.

Having said that, though, we saw strong international attendance this year at our domestic parks. There's no question that those results have been strong. And the top line growth, coupled with the close mining of the expense line, has resulted in strong growth and we hope to see our results continue there.
​

Huh?

Last quarter, Iger reported:

We did see in the quarter a positive impact to the bottom line from MyMagic+, just the beginnings of it. We will continue to see more of that. But we do not have data that we can share with you right now about specific guest spending.​

More than 2 years after Staggs introduced MyMagic+ to the public, Disney was seeing "just the beginnings of" "a positive impact to the bottom line from MyMagic+." Yet, as Iger said pretty much every quarter before that, "But we do not have data that we can share with you right now."

This quarter, Iger reports "So as you know that MyMagic+ has had an impact, especially as we've now started to anniversary the startup costs that we had there." So as I mentioned in my earlier post about P&R's expenses and quoting Disney's 10K:

The decrease in infrastructure costs reflected higher costs in the prior-year quarter in connection with the launch of MyMagic+​

In other words, Iger is echoing what's in the 10K, which is that the only financial 'improvement' from MyMagic+ occurred because they don't have rollout costs anymore. More than a year since they first started making MyMagic+ available to Guests, I sure hope not.

But then we get the even more bizarre:

MyMagic+ as a driver going forward, will still be a factor, but perhaps not with as great an impact as we've seen just in this quarter.​

WHAT????!!!!!

Last quarter, you reported "just the beginnings of" "a positive impact to the bottom line from MyMagic+." This quarter you report that MyMagic+ 'improvement' was the result of an absence of launch costs while, at the same time, stating that MyMagic+ will "perhaps not with as great an impact as we've seen just in this quarter."

But the only "impact" you reported this quarter was that you stopped throwing money at it!

Now you're telling us, that in the future MyMagic+ will "perhaps not with as great an impact" as the quarter that you just stopped throwing money at MyMagic+.

I don't curse on these threads but I was tempted to write one when I read this double-speak.

And, of course, we get use usual disclaimer from Iger that we hear at every earnings call:

So it's difficult to say just how much it contributed because it's so integrated, but it clearly was a contributor to results.​

For years you've been telling us about all these great metrics that show that MyMagic+ is 'working', even though you don't want to discuss them with us. Now you are sure that "it clearly was a contributor to results" even though "it's difficult to say just how much it contributed."

What about all those great metrics you kept hinting at? How the heck do you know it "clearly was a contributor" if it's "difficult to say just how much it contributed?"

"Our wide receiver played a great game even though he didn't catch a pass or make a downfield block. But I'm sure he clearly was a contributor."

Oh, and then Iger follows up that gem with essentially "Let's then talk about Shanghai instead because I don't want to talk about MyMagic+ anymore."

I hate to say it because I really wanted to wait for Iger's great announcement that MyMagic+ was a rousing success, but if this is the best we're going to get, then it's time to declare MyMagic+ a financial failure.

Well you cant exactly tell JP Morgan that its simply infrastructure that integrates three components that WDW already had....

Did anyone ask about the missing $800M?

 

[PhotoDave219]

Maybe so. I still think they need a 3rd gate before expanding to 15,000 hotel rooms. The last thing we need is another Orlando resort that was in the theme park business that's now in the hotel business.

Ummm..... Four Parks, One World. MK, Epcot, DAK & DHS. Thats four.

 

[Next Big Thing]

Well I take umbrage with the upper management of custodial, especially the area managers. But thats because its personal and they screwed over a good friend. Shame they were more interested in covering their own *** and a 20-year career.....

Oh, I have plenty of feelings about Custodial management (at MK at least) as well. Like you say, everyone is just there to save their own , if they've made it up to being a leader or even a coordinator, then those who are still just regular workers basically can be fired at any point for any made up reason. You can fight it but it's very rare to win.

They just don't seem to care about their employees like DHS or DAK do. I worked at all 4 parks just to experience the differences (my home was Main Street) and Main Street is just about getting S*** done, no time for patting you on the back, making you feel good, etc. Plus being understaffed, blame often goes out to those front line workers if guests complain about something when truly it's a mangerial problem for not properly staffing.

 

[lazyboy97o]

Mixed with that other stuff it is. I didn't know it had alcohol in it too! Wow

Alcohol is listed as an ingredient in Merchandise 7X according to documents that have been found supposedly linked to John Pemberton. There are only a couple of onces of Merchandise 7x in 5 gallons of syrup which in turn would make 30 gallons of Coca-Cola. So even if Merchandise 7x was all alcohol you'd only be at something like 0.07% of Coca-Cola being alcohol.

 

[BrerJon]

Do you think that back then that each restroom had an assigned CM. That's the only way I can ever see a restroom at the MK being pristine at all times. It would have be cleaned around the clock.

I think the reason is basically they replaced humans with robots. In the old days, they tended to overstaff just to be on the safe side and CMs would be given freedom to look after whichever areas needed attention. Now the computers in CDS micromanage every predicted attendance figure to only give the minimum staff, and deploy people to where they estimate the most overflowing toilets or pools of puke are, removing much of the human judgment that made things so spotless in the past.

 

[BrerJon]

Tack on the reduced costs associated with completion of the MyMagic+ rollout and the operating income number doesn't look as nearly as impressive.

Aren't the MyMagic costs separated from operating profit and depreciated over time? I'm sure someone on here corrected me on that before, when I implied they might show higher figures once they weren't wasting all that cash on the car crash roll-out.

 

[PhotoDave219]

Oops. Ya caught me!

Hopefully sticking on the east-side with Prop Joe and the good stuff the Co-Op is getting....

 

[BrerJon]

I'll take my own personal experience over random people I don't know on the Internet. I can believe that some surveys may not have a comment box. But unless someone can provide a picture or screen shot I will not believe they were given a survey with all positive answers. I've seen enough people around here make things up to push their Disney is evil agenda.

I don't normally get picked for surveys, even when I try they do everything in their power to avoid me, but I know the one time I was picked the survey ended as soon as I'd entered the demographic info. I wonder if I'd said I was with kids, or of a different age group, there might have been more questions.

I do know lots of people who have been picked, however, and from what I've heard over the years they are often written as if they have answers in mind and target specific types of guest with leading questions. So you'll never see a 'what could be improved at Animal Kingdom?' question, but you will see a 'Which did you prefer, Kali or Everest?', the sort of question that leaves no room for mentioning Yetis or anything politically awkward.

 

[ParentsOf4]

Aren't the MyMagic costs separated from operating profit and depreciated over time? I'm sure someone on here corrected me on that before, when I implied they might show higher figures once they weren't wasting all that cash on the car crash roll-out.

MyMagic+ costs are spread out all over the place. Over the last several months, Disney has reported reduced MyMagic+ costs in both opex and SG&A on its 10K and 10Q forms.

I looked at trends and known expenses and calculated that most of MyMagic+'s costs were not recorded as capex. Only capex would be depreciated.

 

[BrerJon]

To be fair it was absolutely a knee jerk reaction to potter.. an extremely slow reaction though. Star wars should have always been the focus but who knows how tangible the deal would be back then?

Avatar wasn't so much a knee-jerk reaction as an arthritic grandmother's knee-jerk.

 

[GoofGoof]

Hopefully sticking on the east-side with Prop Joe and the good stuff the Co-Op is getting....

Nah, I saw her down in Hamsterdam with Bubbles.

 

[PhotoDave219]

Nah, I saw her down in Hamsterdam with Bubbles.

Oh thank god, someone gets it.....

 

[PhotoDave219]

shh...now the government is going to spot me

So you saw that stuff coming out in WaPo and WSJ tonight about government surveillance planes flying over west Baltimore with the intention of tracking people's cell phones?

 

[PhotoDave219]

That's new news? The government tracks everything at every possible moment. I guess Big Brother decided to let it out.

Airplanes registered to a third party. taking off from an airport near where I am and conducting surveillance over West Baltimore during their unrest. Rather creepy.

Much more disturbing than Mickey tracking everything I do at WDW. Speaking of which.... @WDW1974, we ever find out more abut Palintir & their role with MM+/NextGen? Or were they simply helping build the database that analyzes every movement we make?

 

[culturenthrills]

I'd say the bathroom filth is a negligence issue, there are far fewer cast members than ever seen patrolling them nowadays. It has become common to see dirty situations remain uncleaned for substantial amounts of time. My past few visits to WDW unfortunately required me to get acquainted with the state of MK's bathrooms for lengthy periods of time. I had first hand experience with how infrequently cast members even go in. And it seems to be a somewhat newish situation (or at least one that has gotten much worse within the past couple of years), even around 2010 through 2012 it was common to see a cast member constantly cleaning.

Epcot's bathrooms weren't as bad, and i visited them during both Food and Wine as well as Flower and Garden events with quite heavy crowds. And i saw more cast members in them keeping things clean than MK's.

Plus us insiders know if you gotta go at Epcot you go to the Imagination bathrooms. Nice, clean and well air conditioned with great music

 

[BrerJon]

I don't disagree with that. But with the lack of available real estate I would think a 3rd gate would be more profitable than building additional hotels geared towards people that aren't going to visit the parks. Just my opinion.

The third gate would be great, but until then you can get a general lift by doing little things to encourage the centre of gravity to shift upwards, and that's what I think Universal is doing.

Disney is centred on the once-in-a-lifetime guest, spending a fortune on overpriced products because they're unlikely to come back, and trying to convince people there's nothing worth seeing off-property.

Universal seems to be taking the opposite approach. Instead of trying to get people to blow thousands of dollars on a one-off vacation, they want people to see Orlando as somewhere where - if you only do a couple of days at Disney and don't stay in WDW - a vacation doesn't have to break the bank. With this in mind it's no biggie if only part of the vacation is spent in Universal's parks, and if they are taking a percentage, no matter how small, of room rates, that's a bonus.

By building something new every year, they guarantee people spend at least one day in their parks, but by encouraging a more general trend of visits in that part, even being comfortable with people heading off to Sea World, or the malls, or I-Drive... while you wait for the timing to be right to build a third gate, you're subtly training people to visit more often and always taking some of their dollars, even if not a huge amount.

Then when you do open your third gate, boom you have the hotels and infrastructure ready, and suddenly you look like WDW North overnight.

 

[BrerJon]

Much more disturbing than Mickey tracking everything I do at WDW. Speaking of which.... @WDW1974, we ever find out more abut Palintir & their role with MM+/NextGen? Or were they simply helping build the database that analyzes every movement we make?

Remember that time when Bob Iger went ballistic on the congressman who questioned MyMagic's privacy implications?

http://deadline.com/2013/01/disney-...ngressman-ed-markey-magicband-privacy-415038/

I wonder if after that they went back to the drawing board and cancelled some of the more controversial tracking and analytics benefits from the project in order to duck the political heat. I could see that causing Palantir to be left out of later implementations, even if they had been working with Disney on the early versions.