Bob Iger at WDW now ... BoD to Follow?

[stretchsje]

Why do you think Wall Street hates investments in the parks? Wall Street only cares about ROI and the returns on the investment. If the parks grow and become more profitable they reward the stock.

This. Didn't UNI make their original Potter investment back in something like 6 months vs their projection of 4 years? (Whatever the number was, it was impressive.) I'm sure TWDC and its shareholders took notice. While TWDC may not be directly responding to Potter, that doesn't mean investors didn't learn from it. I think the "mature market" label was shattered several years ago, which perhaps not coincidentally is when we're hearing these recently approved plans began on the drawing board.

 

[doctornick]

That's not really my question. I understand and agree with all the reasons the investment is needed. Stale parks, lack of capacity, etc. My question is more about what finally caused this management group, seemingly content to ignore those needs for a decade (as you said), to finally see the light. There had to be a tipping point. Did they always acknowledge a problem and just now decide to fix it? Had they denied the problem even existed? Was it just a matter of getting beyond the bear of the NGE project?

I wouldn't be surprised if the tipping point was a significant drop in revenue (merch and food) from DHS, especially relative to other parks. I wouldn't be surprised if the numbers there were quite low relatively, especially if you remove "special events" like SWW or the Villains party. And it's finally either reached a point where it's considered unacceptable or it's been stable but going on long enough that it was felt something needed to be done.

 

[jt04]

That's my thinking as well... that it was never a matter of "no," but "not yet."

True. And they likely spent considerable time negotiating for certain IP's plus the time to blue sky once they were acquired. Then develop the concepts. Then Shanghai happened. I guess we could say Imagineering got shanghai'ed for a few years. So now, finally, when the time was right, WDW will get some investment. Which is well justified in every way. Patience is rewarded.

 

[CaptainAmerica]

This. Didn't UNI make their original Potter investment back in something like 6 months vs their projection of 4 years? (Whatever the number was, it was impressive.) I'm sure TWDC and its shareholders took notice. While TWDC may not be directly responding to Potter, that doesn't mean investors didn't learn from it. I think the "mature market" label was shattered several years ago, which perhaps not coincidentally is when we're hearing these recently approved plans began on the drawing board.

Nobody ever said "mature market," but rather "mature business." Universal can and should be able to leverage a dollar more efficiently than WDW because it's so much smaller. If Disneyland had any available real estate to speak of, they'd be able to do the same.

 

[gmajew]

Wall St is currently very bearish on investments in 'Physical Things' they want APP's cheap to make companies go from nothing to low billions with only a few tens of millions invested. Low risk high reward, Plant and Equipment is viewed as a much higher risk.

That is why restaurant stocks that are huge capital expenditures are growing and going off with huge bangs. Only way to grow that segment is by putting out cash. No different then parks based on ROI. If the return is their Wall Street rewards.

 

[matt9112]

It's a great question, and one I don't think Disney thinks about enough. I would argue it's their own advertising and marketing — virtually any marketing for the parks they do promotes solely the castle (from the entry arch sign, to the plastic gift shop bags, to the TV commercials). Disney used to be much more balanced in how they promoted each of their parks.

Vintage WDW merchandise bag:

Spaceship Earth has the largest presence on the bag, and DHS/MGM is represented by the Earful Tower and GMR gangsters. Even Downtown Disney/Disney Village got in on the design, with the Empress Lilly.

WDW merchandise bag today:

Disney has created the public impression that the only Disney park worth going to is the MK; that the MK is the end-all, be-all of WDW. It's not hard to see why the masses now overcrowd MK when the other parks' attendance are stagnant.

It's a great question, and one I don't think Disney thinks about enough. I would argue it's their own advertising and marketing — virtually any marketing for the parks they do promotes solely the castle (from the entry arch sign, to the plastic gift shop bags, to the TV commercials). Disney used to be much more balanced in how they promoted each of their parks.

Vintage WDW merchandise bag:

Spaceship Earth has the largest presence on the bag, and DHS/MGM is represented by the Earful Tower and GMR gangsters. Even Downtown Disney/Disney Village got in on the design, with the Empress Lilly.

WDW merchandise bag today:

Disney has created the public impression that the only Disney park worth going to is the MK; that the MK is the end-all, be-all of WDW. It's not hard to see why the masses now overcrowd MK when the other parks' attendance are stagnant.

I want that bag....the retro one.

 

[SJN1279]

That's not really my question. I understand and agree with all the reasons the investment is needed. Stale parks, lack of capacity, etc. My question is more about what finally caused this management group, seemingly content to ignore those needs for a decade (as you said), to finally see the light. There had to be a tipping point. Did they always acknowledge a problem and just now decide to fix it? Had they denied the problem even existed? Was it just a matter of getting beyond the bear of the NGE project?

My belief is that Iger believes this will be the exclamation point on his legacy.

 

[dizneycrazy09]

My belief is that Iger believes this will be the exclamation point on his legacy.

Nothing like waiting till the last minute.

 

[G00fyDad]

If he spread out the repairs, updates, and new attractions over his tenure then he may be afraid that people will not "see" what he has done. However, if he does it all at once he may be seen as a savior of the parks.

 

[Tip Top Club]

DAK is largely set with all that has opened and will into 2018.

All three of the remaining parks will see new product. But the lion's share is going to Studios unless they approved something elsewhere by chipping away at the remaking/rebranding budget for Disney-MGM. I don't believe that happened.

Does this include Frozen at Epcot, or something else?

 

[CaptainAmerica]

Nothing like waiting till the last minute.

Can we stop with the stupid "I hate Iger" hyperbole? It's really getting old. Under his watch, we got the Dream, the Fantasy, Marvel, Pixar, Lucas, four of the top-10 grossing films of all time, DCA expansion, a profitable Disney Interactive segment, the highest-rated cable broadcast of all time, and a stock price that has grown from $24 to $114. That's a 375% increase, or 17% CAGR. This BS search for a "legacy defining" accomplishment ignores the fact that he, frankly, already has ten of them.

 

[dizneycrazy09]

Does this include Frozen at Epcot, or something else?

Frozenstrom is not included in any money that has been allocated due to this meeting. Anything that comes to EPCOT out of this money will be something entirely different... perhaps an Imagination overhaul????

 

[dizneycrazy09]

Can we stop with the stupid "I hate Iger" hyperbole? It's really getting old. Under his watch, we got the Dream, the Fantasy, Marvel, Pixar, Lucas, four of the top-10 grossing films of all time, DCA expansion, a profitable Disney Interactive segment, the highest-rated cable broadcast of all time, and a stock price that has grown from $24 to $114. That's a 375% increase, or 17% CAGR. This BS search for a "legacy defining" accomplishment ignores the fact that he, frankly, already has ten of them.

Oh, personally, I love what Iger has done for the company as a whole. My family owns many shares. Needless to say, his reign over the company has made many in my family very, very happy. Having said that, I can be frustrated in the lack of investment and attention he has shown the parks, regardless of his accomplishments in other divisions.

 

[PhotoDave219]

Frozenstrom is not included in any money that has been allocated due to this meeting. Anything that comes to EPCOT out of this money will be something entirely different... perhaps an Imagination overhaul????

No one has any specific details.... Yet.

 

[SYRIK2000]

Can we stop with the stupid "I hate Iger" hyperbole? It's really getting old. Under his watch, we got the Dream, the Fantasy, Marvel, Pixar, Lucas, four of the top-10 grossing films of all time, DCA expansion, a profitable Disney Interactive segment, the highest-rated cable broadcast of all time, and a stock price that has grown from $24 to $114. That's a 375% increase, or 17% CAGR. This BS search for a "legacy defining" accomplishment ignores the fact that he, frankly, already has ten of them.

Not to mention Poop Brownies!

 

[dizneycrazy09]

No one has any specific details.... Yet.

I'm guessing it's safe to say that you're diligently working on getting those specifics...

 

[PhotoDave219]

How did September 11 affect those figures and whats the growth since then, also compared to the growth at MK?

The short version?

It was a hard hit, no doubt. 2002 seems to be where most of the numbers bottom out, so I'll use that. Resort as a whole was off -13% from 2000. Epcot took the hardest hit, dropping 22%. DAK/DHS were around 10% drop and MK dropped 9%.

Everything has rebounded and grew and grew.... The resort as a whole is up 37% since 2002. MK/EP up 38% since then, DAK up 42%. Studios lagging at 29% growth since then.

Looking at 2005 and forward, (past 10 years) Everything is growing at about the same rate. Resort as a whole is up 24%, MK/DHS 23%, DAK up 31% and Epcot at 19%. Resort as a whole is up 20% since 2005. MK is up 20% with Studios. Epcot a tad behind at 16% and DAK growing nicely at 27% over the past 10 years.

In the near term, MK is growing at a rate double of all the other parks. Since 2011, MK is up 13% while the other 3 parks are hovering around 6%. Resort as a whole is up 8.5%

I'll dive more into this years numbers after the 4th of july.

(Sources = Amusement Business, TEA)

EDIT= Damn Spreadsheet.

 

[flynnibus]

Why do you think Wall Street hates investments in the parks?

Because its extremely capital intensive with very slow payoffs that are difficult to attach to direct causation.

They just don't reward risky investment thst do not generate a return

Yeah... like attractions that cost tens to hundreds of millions of dollars to build... millions to maintain... collect no direct revenue themselves... and are tiny pushes trying to make a big mountain move (entire park patterns). Yeah, why would WS be skeptical of dumping money wildly at theme parks???

When you look at specific ROI - they are very hard to justify. They know you must invest to grow, and refresh to persist... but do you do that with a small investment or massive? Hence resistance and skepticism.

 

[Andrew C]

Can we stop with the stupid "I hate Iger" hyperbole? It's really getting old. Under his watch, we got the Dream, the Fantasy, Marvel, Pixar, Lucas, four of the top-10 grossing films of all time, DCA expansion, a profitable Disney Interactive segment, the highest-rated cable broadcast of all time, and a stock price that has grown from $24 to $114. That's a 375% increase, or 17% CAGR. This BS search for a "legacy defining" accomplishment ignores the fact that he, frankly, already has ten of them.

Wasn't he also responsible for buying back the Disney Store from the Children's Place? Serious question

 

[Mike S]

Can we stop with the stupid "I hate Iger" hyperbole? It's really getting old. Under his watch, we got the Dream, the Fantasy, Marvel, Pixar, Lucas, four of the top-10 grossing films of all time, DCA expansion, a profitable Disney Interactive segment, the highest-rated cable broadcast of all time, and a stock price that has grown from $24 to $114. That's a 375% increase, or 17% CAGR. This BS search for a "legacy defining" accomplishment ignores the fact that he, frankly, already has ten of them.

I notice a lack of anything WDW specific in your list. Since this is a WDW focused site for the most part, well, you can do the math.