• Welcome to the WDWMAGIC.COM Forums!
    Please take a look around, and feel free to sign up and join the community.You can use your Twitter or Facebook account to sign up, or register directly.

Cash-Strapped Disney

I said back in March that if Disney parks and theaters aren't reopen by July there will be a good chance the company goes into serious financial trouble. They didn't take recession hits. They lost almost all revenue aside from Disney Plus seeing as ESPN and ABC aren't doing too well either.
 

Lilofan

Well-Known Member
I said back in March that if Disney parks and theaters aren't reopen by July there will be a good chance the company goes into serious financial trouble. They didn't take recession hits. They lost almost all revenue aside from Disney Plus seeing as ESPN and ABC aren't doing too well either.
When Iger imposes he takes a 100% salary cut, Chapek 50% and 20-30% for TWDC executives that's just not for giggles. It's not rocket science to figure out. It's an omen for things to come.
 

Figments Friend

Well-Known Member
Thats whats concerning...the word symbolic... as in lets make the fanbois happy by saying tonys name....

Tony's involvement is only as a advisor, which has been his part-time role at WDI since he 'retired' in 2013.
He is a Creative Advisor and as such offers suggestions and contributes ideas when called upon.

For this proposed 're-theme' of 'Splash Mountain', his role is to do the same - suggest ideas and offer suggestions.
The trick is - will the team actually tasked with doing this job ACTUALLY listen to those ideas and suggestions?
Which is what i was touching on some time ago in other related threads about this project.

I'll say it again -
Just because his name is attached to this particular project does not mean he endorses the decision to 're-theme' it 100%.

-
 

mgf

Well-Known Member
ETA: I do not doubt that source(s) made these claims. I just want to push on some of these points a bit.

-----

In fact, you might say a rogue committee approved the decision without determining the cost or the feasibility... and then the company realizes the issue after public announcement. So what to do?

I doubt it was a rouge committee. It may have been a group removed from the finances and design considerations, but they clearly had the authority to make the call. This sounds more like a complaint about not being consulted about a change than legitimate retelling of what happened. Bosses get to make calls - even if they do not have all the details figured out or when they are not responsible for figuring them out. Someone decided this was a net positive change for the company. It was not done on a whim. See Nike. Everyone expected they were doomed with their corporate decisions. Their sales exploded. [PLEASE DO NOT START A POLITICAL CONVERSATION ABOUT NIKE.]

As of now, the plan is to "quickly" change the DLR version, where it is more likely to be received positively, then use Epcot capex funds that would have gone to Mary Poppins and JII to change the superior WDW version starting in 2022 or 2023. However, hopes that Disney can plus the attraction are difficult to materialize with Imagineering already completely flummoxed how they can possibly reskin many dozens of animatronics in a crown jewel attraction. One imagineer has compared the task to retheming Pirates of the Caribbean to a Jungle Book ride. Yet more attractions are likely to be modified, budgets be damned.

This has created friction even all the way to the Bobs with Iger doing everything he can to save his legacy, while Chapek tries not to be the fall guy while looking at a company in dire financial straits.

I suspect the friction has been there since Iger decided not to actually step away, but I do not see Iger needing to save his legacy via Splash Mountain if that is what is being implied here. He might have felt the need to help the parks through the pandemic, but he had a chance to walk away without history's judgement. His legacy in the company is the acquisitions that have made the company billions. His legacy is Disney+. His legacy is maybe expansion of the foreign parks. Wall Street does not love Iger because he overhauled DCA or kicked off the EPCOT reboot.

I will also say that I always suspected Chapek would be a transitional/footnote CEO no matter what.

.....Iger overruled the plan and pushed for a full reopening to prevent Universal from getting the upper hand.

I am deeply skeptical of this repeated claim that Disney was caught off guard and overly concerned with Universal getting an upper hand. There was (and as it turns out is) tremendous downside risk to restarting too early. There was no real first mover advantage here for Disney. They were *always* going to get more media and PR scrutiny in reopening. It was always going to be a larger story if an outbreak started at Disney than Universal. I would even go as far as to argue that the share of local park attendees was pre-divided. Universal was not going to breakaway with permanent market share gains.

I do not think a company this large gets "surprised" by things like Universal's reopening decision. There is just too much overlap in the restart circles - vendors, local government, state government, local media, etc - for me to believe that any of the Orlando theme parks were surprised by another one. Maybe on the exact date but certainly not their momentum toward opening.

Now, Disney might have felt more pressure to open once Universal had opened, but I don't believe it was a panic situation. Companies game out and forecast for a reason. They might not have gotten the scenarios exactly right, but they had considered this possibility in advance.
 

Mainahman

Well-Known Member
Imagine if they just focused on the attractions already mid-construction and then the 50th. By the time they get around to messing with the attractions that are working, people will have moved on to other worries—>aka systematic change over these park adjustments
Thats my assumption with what will happen here. they will motor ahead, finish the stuff too far along to mothball, not say a word, and the re theme becomes the next main street theater. The average person will forget by the 50th it was even announced.
 

WDW Pro

Well-Known Member
Original Poster
I doubt it was a rouge committee. It may have been a group removed from the finances and design considerations, but they clearly had the authority to make the call. This sounds more like a complaint about not being consulted about a change than legitimate retelling of what happened. Bosses get to make calls - even if they do not have all the details figured out or when they are not responsible for figuring them out. Someone decided this was a net positive change for the company. It was not done on a whim. See Nike. Everyone expected they were doomed with their corporate decisions. Their sales exploded. [PLEASE DO NOT START A POLITICAL CONVERSATION ABOUT NIKE.]

Rogue in that they bypassed important steps knowing they are unlikely to be reprimanded and don't care about the consequences. As for Nike, their stock cratered in April and has been trending downward again since June. Their reliance on Chinese sweatshops is unlikely to yield long term good will.

I suspect the friction has been there since Iger decided not to actually step away, but I do not see Iger needing to save his legacy via Splash Mountain if that is what is being implied here. He might have felt the need to help the parks through the pandemic, but he had a chance to walk away without history's judgement. His legacy in the company is the acquisitions that have made the company billions. His legacy is Disney+. His legacy is maybe expansion of the foreign parks. Wall Street does not love Iger because he overhauled DCA or kicked off the EPCOT reboot.

I will also say that I always suspected Chapek would be a transitional/footnote CEO no matter what.

You're right in most of this. Iger's concern is his acquisitions not being seen as successes, and that's more likely to occur if there company is in poor financial stability with little to no revenue from those entities.

I am deeply skeptical of this repeated claim that Disney was caught off guard and overly concerned with Universal getting an upper hand. There was (and as it turns out is) tremendous downside risk to restarting too early. There was no real first mover advantage here for Disney. They were *always* going to get more media and PR scrutiny in reopening. It was always going to be a larger story if an outbreak started at Disney than Universal. I would even go as far as to argue that the share of local park attendees was pre-divided. Universal was not going to breakaway with permanent market share gains.

Think about where we were when Universal announced. Now see from Disney's point of view that they're taking devastating losses by planning for a mid August to early September reopen with a single park and then phased push to reopening. Now their main rival has announced a total reopen in two weeks. With cases low in Florida, how were they going to justify to shareholders losing billions while Universal ran the summer table? The quickest they could possibly reopen from that point was mid July, and that's exactly what they changed course to do.
 

The_Jobu

Well-Known Member
Well, partially it's because they announced the damn thing, so they've gotta do it. Then they either pull it off and make people actually want the change in Orlando, or people hate on it so much that they can just sit on it indefinitely in Florida. They've done everything they can to get Tokyo on board, and since that's not happening, they're just stuck. And by the way, that's one of the ways you can tell they didn't have their act together: if Splash Mountain is so racist, why will a Disney park continue to have it? If they had this pinned down and ready to go, that wouldn't have been the case.

Wow, its almost like announcing expensive, divisive, unnecessary changes to popular attractions during a summer of hyper-sensitivity, while losing tons of money, is a knee-jerk, poorly planned idea. Weird...
 

Sonconato

Well-Known Member
Let me preface this post by saying I know much more than I'm going to say in this thread. That's just the way it's going to have to be in order to protect sources, prevent doxing, and keep jobs safe. Additionally, it lets those sharing info with me know that if something needs to be off the record, it will stay if the record.

The Disney company is currently hurting for cash, and not by a little. The absolute destruction of the global film industry means that Disney is losing billions and billions of usual expected revenues with no certain end in sight. Mulan has been pushed to the end of August, but even that still seems optimistic, and likely box office revenues may by as low as 20% of what it could have been. A burgeoning cold war with China likewise makes promoting the film an uncertain formula. The MCU is currently benched, live action Star Wars is on pause, Indiana Jones 5 is more unlikely daily, and there's simply no good path forward outside of the animation studios. Furthering the dearth of income, Disneyland was prepped to reopen at great expense, only to be indefinitely postponed yet again. The money to reopen Walt Disney World has been immense, but with increasing COVID infections in Florida, it seems more and more likely that increasing capacity will be a slow process, which means revenues for WDW will be lower than projected when the rush was approved to get the parks open fast. Adding to this, capex projects needing completing at WDW are substantial, more than ever in the past decade. Conflict has broken out inside Disney's top levels with some pushing for continued spending in new projects, such as Splash Mountain reskinning, while others are extremely bearish with a view that Disney should hold every possible dollar.

It is from within this paradigm that Disney is now struggling with public messaging not matching internal capabilities. For example, Splash Mountain changes were announced with little design ready to implement, based off of a blue sky design that had a concept art package quickly produced for social media advertising. Just one problem: the actuaries were not approached, nor were budgets forecast for the changes. In fact, you might say a rogue committee approved the decision without determining the cost or the feasibility... and then the company realizes the issue after public announcement. So what to do? As of now, the plan is to "quickly" change the DLR version, where it is more likely to be received positively, then use Epcot capex funds that would have gone to Mary Poppins and JII to change the superior WDW version starting in 2022 or 2023. However, hopes that Disney can plus the attraction are difficult to materialize with Imagineering already completely flummoxed how they can possibly reskin many dozens of animatronics in a crown jewel attraction. One imagineer has compared the task to retheming Pirates of the Caribbean to a Jungle Book ride. Yet more attractions are likely to be modified, budgets be damned. This has created friction even all the way to the Bobs with Iger doing everything he can to save his legacy, while Chapek tries not to be the fall guy while looking at a company in dire financial straits. Whereas Chapek wanted to spend the capital necessary to retrofit MK for a pandemic and then slowly open other parks as demand and money permitted, Iger overruled the plan and pushed for a full reopening to prevent Universal from getting the upper hand.

Now the company has greater inner turmoil than at any point in the recent past. Spending is continuing in spite of depression-like revenues projected for the remainder of the year... and often on new projects of a social nature (changes are coming to Hall of Presidents, Jungle Cruise, Country Bears, Pirates of the Carribean, Carousel of Progress, etc). This is coming from one or two factions in the company who share overlap. Other factions are scared the company is stretched thin and needs to hold spending as much as possible. Fear also exists that if relations with China deteriorate, the company could lose both Shanghai and Hong Kong. Not since WWII has uncertainty been so high. The cost of maintaining parks during a pandemic are significantly higher, yet raising ticket prices is nearly impossible.

Going forward, what does this mean?

1. Epcot changes are likely to be MUCH less than originally planned.
2. Layoffs are coming.
3. Announced additions are on very long timelines.
4. Disney World having to close again would be devastating.
5. OLC and Disney relations are strained; expect that to manifest in visible ways.
6. Every penny counts, and cost cutting measures can be expected within 12 months.
7?. Is Chapek the fall guy? Many are speculating Iger plans to use him as the scapegoat.
8. 50th celebration is essentially canceled down to only things that cost little... no new floats, no big refurbs.

Additional info on Splash:
This whole Splash Mountain thing was torpedoed by Tokyo. Disney wanted to get completely away from Song of the South, but OLC essentially told them to pound sand. That meant they're stuck spending enormous money just to match the current quality, and simultaneously NOT getting away from Song of the South. So the only gain they get is Tiana might sell better in the souvenir shop.
Thank you very much for the information. It is greatly appreciated.
 

Register on WDWMAGIC. This sidebar will go away, and you'll see fewer ads.

Top Bottom