Cash-Strapped Disney

Mainahman

Mainahman

Well-Known Member
WDW Pro said:
The issue is that so much of their operation runs out of California, which doesn't appear to be getting better. So I appreciate how well you did with all of this, but 9.2b is what I'm hearing from the inside for remaining Q3 reserves. Now, 9.2b is fine, but let's play out a possible scenario: let's say this situation as we are in today continues through the month of September. Let's say stockholders start getting very nervous. That's why they will do whatever it takes to keep WDW up and running (16-20% of all profit). It's because there is a foreseeable future where film is still sidelined, merch is not selling, cruises are docked, and all you've got is TV (which is way down), streaming, and Disney World. The converse is possible but it isn't guaranteed. And let's keep in mind the massive capex expenditures they have to finish at WDW which eat into that 9.2b, especially if parks operate at a loss short term.
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Im ready and willing to drop bank next month! Not that i can keep you all afloat myself ( Im no scrooge mcduck) but im ready and willing to drop the $$ on merch and food, and all those things. I hope theres enough of us, that can really help inject back into the machine,
 
M

Mrtko

Member
WDW Pro said:
The issue is that so much of their operation runs out of California, which doesn't appear to be getting better. So I appreciate how well you did with all of this, but 9.2b is what I'm hearing from the inside for remaining Q3 reserves. Now, 9.2b is fine, but let's play out a possible scenario: let's say this situation as we are in today continues through the month of September. Let's say stockholders start getting very nervous. That's why they will do whatever it takes to keep WDW up and running (16-20% of all profit). It's because there is a foreseeable future where film is still sidelined, merch is not selling, cruises are docked, and all you've got is TV (which is way down), streaming, and Disney World. The converse is possible but it isn't guaranteed. And let's keep in mind the massive capex expenditures they have to finish at WDW which eat into that 9.2b, especially if parks operate at a loss short term.
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Thank you! My numbers are certainly made-up to see where it might land. $9.2B in cash reserve sounds like a lot, but it is terrible and it doesn't keep them afloat for 3 more quarters. It cripples the ability to move forward with all of the projects on the table. The consensus EPS estimate is for around a ($1B) loss in net income. The magnitude of what you are describing would land like a thud in the financial community. I am getting a better sense of what you are alerting us to.
 
Brer Oswald

Brer Oswald

Well-Known Member
londwar said:
Just out of curiosity, did they really have this idea well in hand before they made the announcement, or do you feel someone had a concept and announced it because Disney needed to virtue signal to the world? To me, the timing of the announcement just seemed very strange, specifically because of all the unrest going on. Probably just me.
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From what I can gather, the announcement was pushed up to capitalize on current events. That way, backlash against the change could be considered “evil” and they’d get some good publicity to combat a lot of the negative publicity they’re getting concerning the virus.

But it was a foolish decision because, not only have they committed to doing it on both coasts due to the timing of the announcement, but they’ve also committed to fast tracking it ahead of other projects that were already underway or were about to begin motion.

If the objective was to bury all living reference to SotS, they’ve failed because the Japanese people like the ride as is, and OLC is only going to change the ride in Tokyo if the retheme is leaps and bounds ahead of what is currently in Florida, which isn’t even monetarily possible right now.

If they were smart, they would’ve announced it specifically for Disneyland at the next D23 event, with no mention of WDW. Then, if it was a success in Disneyland, retheme the Florida version within the next 10 years when Epcot is done and the money’s right, and make sure to make it even better in WDW so that Tokyo fees inclined to redo theirs.
 
M

Mrtko

Member
WEDWAY100 said:
I don’t know if you are including the new debt in the interest payments. They floated new bonds for $6B in March and then $11B in May. That’s a lot of new debt!
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I am not an expert, but from what I can see the $6B in March ended up in the cash reserve. If they don't end up needing it, there is no risk. It becomes a problem if they have to use it to fund operations. I think the $11B was to push current debt into the future. I might be making that up, but I thought that is what I remember hearing. In my totally incompetent model I did bump interest up over what they were paying to account for the debt they took on.
 
O

OhioDuo

New Member
Disney assumed that they would be able to mint money forever off the parks and increase ticket prices at will. It's no secret that ticket price increases have increased at a rate greater than inflation for a decade or more. Nothing is forever, except the desire for more money.
 
londwar

londwar

New Member
WDW Pro said:
The issue is that so much of their operation runs out of California, which doesn't appear to be getting better. So I appreciate how well you did with all of this, but 9.2b is what I'm hearing from the inside for remaining Q3 reserves. Now, 9.2b is fine, but let's play out a possible scenario: let's say this situation as we are in today continues through the month of September. Let's say stockholders start getting very nervous. That's why they will do whatever it takes to keep WDW up and running (16-20% of all profit). It's because there is a foreseeable future where film is still sidelined, merch is not selling, cruises are docked, and all you've got is TV (which is way down), streaming, and Disney World. The converse is possible but it isn't guaranteed. And let's keep in mind the massive capex expenditures they have to finish at WDW which eat into that 9.2b, especially if parks operate at a loss short term.
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What I think will be interesting to look at is how many people re-subscribe to Disney+ at the end of this year. For myself, I took the free year because I got it through Verizon. No money out of my pocket. Will I continue later this year? I don't know. Will others continue if the economy continues the way it is? I guess time will tell. Disney could see a small (or significant) drop in their subs for 2021.
 
WDW Pro

WDW Pro

Well-Known Member
Original Poster
yensidtlaw1969 said:
I'm not sure I understand what Disney+ has to do with Splash Mountain, since Song of the South isn't on it. Can you explain what you mean a little more?
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There was a concern that the Splash Mountain petition could turn into a Disney+ boycott since that's really only thing that could have been boycotted. They're quick to panic over protecting streaming.
 
TraderSam

TraderSam

Member
WDW Pro said:
That depends on the next 4 months, but they would like to maintain the schedule.
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I’m just now seeing this thread for the first time, so thank you for sharing the information, and forgive me if I repeat anything that has already been discussed.
This is a reflection of the larger economic picture regarding discretionary income. These lockdowns, regardless of whether or not they are right course of action, are going to have huge economic impacts that have yet to be felt in many sectors of the economy.
CoStar had an article just yesterday that basically told readers to look to the F&B industry as a lead indicator for other sectors of the economy. TWDC is that on a much larger scale. If they’re strapped for cash, then my antennae are definitely up.
 
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mfortis

Member
If I were Iger (with respect to Disney Parks in US)
  • Cancel any future projects. Splash mountain re-theming for example. No more New hotels or DVC
  • Finish all refurbishments. Keep working the Epcot entrance and France pavilion, etc
  • Stop work on current projects not more to 50% done. Stop working on Star Wars Hotel (and Tron). Finish Avengers campus.
 
J

James Clifton

Active Member
Take a moment & THINK of the decisions IGER has made...count the cost...SPLASH MOUNTAIN...is just one....you don't believe he had a hand in charging parking $$$$ for people staying at WDW resorts? BET...there will be more Iger changes coming....to various rides! Iger has opened the door for POLITICS to change things in WDW!I've been going to WDW for about 40yrs.staying on property for 3day vac.for most of that time....don't care for Iger.....wait &. see what happens....
 
MisterPenguin

MisterPenguin

President of Animal Kingdom
Premium Member
James Clifton said:
Take a moment & THINK of the decisions IGER has made...count the cost...SPLASH MOUNTAIN...is just one....you don't believe he had a hand in charging parking $$$$ for people staying at WDW resorts? BET...there will be more Iger changes coming....to various rides! Iger has opened the door for POLITICS to change things in WDW!I've been going to WDW for about 40yrs.staying on property for 3day vac.for most of that time....don't care for Iger.....wait &. see what happens....
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You can still get more money BY SELLING OFF THE PARKS!!

Just... think about it.
 

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