Disney’s Mufasa - the lion king

[easyrowrdw]

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This does not say that cuts and price increases at the parks happen because they lose money at the box office.

Oh look. I Googled it. Do we trust Google these days?
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Yeah I don’t think you need google to “prove” that revenues from one part of the business are used to fund other parts. You’re obviously correct. It’s not like Disney+ was self-sustaining when it launched. Parks have long been a cash cow for Disney.

 

[Disney Irish]

Yeah I don’t think you need google to “prove” that revenues from one part of the business are used to fund other parts. You’re obviously correct. It’s not like Disney+ was self-sustaining when it launched. Parks have long been a cash cow for Disney.

Except you can also say that Studios is also funding the Parks, and so is every other part of the company. One division is not solely funding another division, that is point as its not how companies work no matter how much of a cash cow you think something is. And the point was also that no matter the loses at the box office it’s not directly affecting the Parks.

 

[MisterPenguin]

During COVID, it was the studios, mostly TV, that kept the parks from going bankrupt.

Then it was the parks turn to subsidize streaming until it became net positive.

Now, the parks profits will go toward the $60B capex in the parks.

A diversified portfolio of income segments is what keeps Disney strong.

 

[easyrowrdw]

Except you can also say that Studios is also funding the Parks, and so is every other part of the company. One division is not solely funding another division, that is point as its not how companies work no matter how much of a cash cow you think something is. And the point was also that no matter the loses at the box office it’s not directly affecting the Parks.

I didn’t see an indication that one was solely funding another but I might have missed that comment. But struggles in one area of a business will absolutely impact other areas. You gotta make up for it somehow if you’re gonna hit your targets.

 

[Disney Irish]

I didn’t see an indication that one was solely funding another but I might have missed that comment. But struggles in one area of a business will absolutely impact other areas. You gotta make up for it somehow if you’re gonna hit your targets.

Again not that simple, its a healthy business that uses profits from all business units to fund the rest of the business units. Again this is normal, so not sure why this is even such a heartache to understand. And again its something Disney has been doing since the beginning days of the company when Studios literally built the Parks.

I think what some have issues with is trying to reconcile how no new investments or cuts can happen in Parks when Studios can have Millions spent on them. And again I say to that, its not that simple. Funding for large capital investments like new attractions and such for the Parks doesn't just come out of nowhere. It takes funding from the entire company to do that including from Studios. Targets are set on each business unit and those targets must be hit, if not that is when cuts happens. Most don't pay attention to the cuts that happen in Studios for example, but they do happen, like cancelling shows and movies. Its only the cuts and price increases to Parks that people around here pay attention to, which is why I keep saying "its not that simple". You cannot directly attribute xyz movie or xyz bad box office year losses to zyx cuts and price increases in the Parks. Yes the Parks are asked to tighten their belt when the rest of the company isn't performing, but so is every other business unit inside TWDC, they just are as publicized as Parks.

This is why this simplistic view that "Parks funds everything" is a misconception of how corporate economics works, especially inside TWDC.

 

[Disney Irish]

During COVID, it was the studios, mostly TV, that kept the parks from going bankrupt.

Then it was the parks turn to subsidize streaming until it became net positive.

Now, the parks profits will go toward the $60B capex in the parks.

A diversified portfolio of income segments is what keeps Disney strong.

Everyone forgets that first part.

 

[lazyboy97o]

And again its something Disney has been doing since the beginning days of the company when Studios literally built the Parks.

Only if you retroactively count ABC’s contribution as being from Walt Disney Productions. There’s a reason the studio only owned a third of Disneyland, Inc and it’s because they weren’t the major financier of Disneyland. Walt Disney’s death led to a growing malaise at the studio that ultimately led to it hemorrhaging money and Michael Eisner being brought in. All during that period of decline and extravagant spending on Walt Disney World, Walt Disney Productions as a whole stayed profitable due to the parks. COVID is really the only exception to the parks being able to survive due to the studio, and that’s not really a normal and reoccurring event. It’s been a very asymmetric relationship.

You rightly point out that expecting every movie to be a billion dollar box office hit is ridiculous, but then just gloss over the ridiculous performance expected of the parks. They’re not making cuts due to true need and poor performance. Nor does Disney show the willingness to endure predictable business cycles. The 2023 box office performance didn’t cause the sort of all out panic that routinely occurs at the parks over foreseeable changes in business. Getting control of movie production budgets also is very unlikely to jump right to things that would be noticeable like getting ride of soundtracks or just having animatics for some scenes. There’s a whole knowledge base and culture that will let the professionals figure it out as best as possible without hurting the movie going experience. The parks aren’t handled like that, yes, operating costs are distinct from the production costs, but they’re still tied together because the production of new experiences is required to really keep the business going. They haven’t controlled those costs and they ultimately can’t because there is no respect or trust for the professional who would be best positioned to fix those issues, and performance falls harder on operations.

 

[Disney Irish]

Only if you retroactively count ABC’s contribution as being from Walt Disney Productions. There’s a reason the studio only owned a third of Disneyland, Inc and it’s because they weren’t the major financier of Disneyland. Walt Disney’s death led to a growing malaise at the studio that ultimately led to it hemorrhaging money and Michael Eisner being brought in. All during that period of decline and extravagant spending on Walt Disney World, Walt Disney Productions as a whole stayed profitable due to the parks. COVID is really the only exception to the parks being able to survive due to the studio, and that’s not really a normal and reoccurring event. It’s been a very asymmetric relationship.

You rightly point out that expecting every movie to be a billion dollar box office hit is ridiculous, but then just gloss over the ridiculous performance expected of the parks. They’re not making cuts due to true need and poor performance. Nor does Disney show the willingness to endure predictable business cycles. The 2023 box office performance didn’t cause the sort of all out panic that routinely occurs at the parks over foreseeable changes in business. Getting control of movie production budgets also is very unlikely to jump right to things that would be noticeable like getting ride of soundtracks or just having animatics for some scenes. There’s a whole knowledge base and culture that will let the professionals figure it out as best as possible without hurting the movie going experience. The parks aren’t handled like that, yes, operating costs are distinct from the production costs, but they’re still tied together because the production of new experiences is required to really keep the business going. They haven’t controlled those costs and they ultimately can’t because there is no respect or trust for the professional who would be best positioned to fix those issues, and performance falls harder on operations.

You are correct, I was glossing over the other financing of the Parks to prove a point here. But thank you for adding more context and nuance to the discussion. As said in other posts I’ve long said Studios needs to get their budgets under control, but so does other aspects of Disney’s business like WDI. Which comes back to my ultimate point I’ve said a bunch of times and you seem to acknowledge, it’s not as simple as most everyone who brings up “Parks is the cash cow that funds everything” makes it. So again thank you for bringing more nuance and context to the conversation.

 

[Disstevefan1]

lol, I’m sorry it’s not a far stretch to think you believe because they are using Parks profits for Studios that they are also cutting services and raising prices because of Studios underperformance.

Its a fact, not a belief, they are using theme park profits to fund their movies, if we believe Google.

I don't believe they cost cut the parks because of studio under performance, but I wont tell you what to believe or not to believe.

Also Business Economics 101, all profits are used to fund all parts of a company.

That's not what you said yesterday - see the screen shot of your reply:

You were so sure studios is not actually being funded by the parks, I began to second guess myself so I googled it, and as we saw YES, the profits from theme parks do indeed fund movies.

 

[Disney Irish]

Its a fact, not a belief, they are using theme park profits to fund their movies, if we believe Google.

This is where I think you need to be very clear. Because the way you worded this, and why I've been pushing on this, is that you are making it seem like you believe or at least implying that Parks is solely funding Studios and the rest of the company, which is not the case. All division's profits feed into the whole company and funds flow into every division. So there is no one division that is solely funding everything else. Studios funds Parks, Parks fund Studios, its a symbiotic relationship. Just because Parks happens to be the cash cow doesn't make it the sole provider of everything else.

That is why I've been pushing on this to make sure its clear for all readers, Parks is not solely funding Studios or the rest of the company.

Because you can put a similar question in Google about Disney Studios and get a similar answer regarding the Parks -

I don't believe they cost cut the parks because of studio under performance

Ok good, glad you wrote that and that we're on the same page now.

That's not what you said yesterday - see the screen shot of your reply:
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You were so sure studios is not actually being funded by the parks, I began to second guess myself so I googled it, and as we saw YES, the profits from theme parks do indeed fund movies.

There is no "gotcha" here, words matter, as I explained above in this post and in subsequent posts.

 

[easyrowrdw]

Again not that simple, its a healthy business that uses profits from all business units to fund the rest of the business units. Again this is normal, so not sure why this is even such a heartache to understand. And again its something Disney has been doing since the beginning days of the company when Studios literally built the Parks.

I think what some have issues with is trying to reconcile how no new investments or cuts can happen in Parks when Studios can have Millions spent on them. And again I say to that, its not that simple. Funding for large capital investments like new attractions and such for the Parks doesn't just come out of nowhere. It takes funding from the entire company to do that including from Studios. Targets are set on each business unit and those targets must be hit, if not that is when cuts happens. Most don't pay attention to the cuts that happen in Studios for example, but they do happen, like cancelling shows and movies. Its only the cuts and price increases to Parks that people around here pay attention to, which is why I keep saying "its not that simple". You cannot directly attribute xyz movie or xyz bad box office year losses to zyx cuts and price increases in the Parks. Yes the Parks are asked to tighten their belt when the rest of the company isn't performing, but so is every other business unit inside TWDC, they just are as publicized as Parks.

This is why this simplistic view that "Parks funds everything" is a misconception of how corporate economics works, especially inside TWDC.

I don't think I have difficulty understanding how businesses operate and I don't see anything in the comments that you're responding to that indicate a lack of understanding either.

 

[Disney Irish]

I don't think I have difficulty understanding how businesses operate and I don't see anything in the comments that you're responding to that indicate a lack of understanding either. I honestly can't figure out what you're arguing against at this point. I'd say I'm done at this point, but sometimes I just can't help myself

Maybe its just semantics at this point, but I've been on these and other boards long enough to know that there has been a long misconception that "Parks funds everything else so why must the Parks suffer when other parts of the company aren't performing". Its a common refrain you hear every time there is a cut or price increase at Parks. Maybe it shouldn't irk me so much but it does, so just as you sometimes I can't help myself.

 

[Prince-1]

I am just glad that Mufasa is gong to wind up beating Sonic 3. I love when trolls are wrong.

 

[Disstevefan1]

I am just glad that Mufasa is gong to wind up beating Sonic 3. I love when trolls are wrong.

You have to give Disney credit here. Sonic came out of the gate strong, but Mufasa did much better than expected over time.

Disney did have the power to have it in more theaters, but still a great job by Disney:

Mufasa:

Sonic:

Mufasa:

Sonic:

 

[easyrowrdw]

Maybe its just semantics at this point, but I've been on these and other boards long enough to know that there has been a long misconception that "Parks funds everything else so why must the Parks suffer when other parts of the company aren't performing". Its a common refrain you hear every time there is a cut or price increase at Parks. Maybe it shouldn't irk me so much but it does, so just as you sometimes I can't help myself.

Okay. I didn't read the present comments that way, but I understand what you're saying

 

[lazyboy97o]

Its a fact, not a belief, they are using theme park profits to fund their movies, if we believe Google.

Do you also think it is a fact that glue is an ingredient in pizza?

 

[Disney Irish]

You have to give Disney credit here. Sonic came out of the gate strong, but Mufasa did much better than expected over time.

Disney did have the power to have it in more theaters, but still a great job by Disney:

Mufasa:
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Sonic:
View attachment 842658

Mufasa:
View attachment 842659

Sonic:
View attachment 842660

I think its easy to see from those graphs why theaters stuck with Mufasa over Sonic, there was more upside with Mufasa over the same period.

 

[MisterPenguin]

Do you also think it is a fact that glue is an ingredient in pizza?

It helps the rocks go down and stay down!

 

[Moka]

You have to give Disney credit here. Sonic came out of the gate strong, but Mufasa did much better than expected over time.

Disney did have the power to have it in more theaters, but still a great job by Disney:

Mufasa:
View attachment 842657
Sonic:
View attachment 842658

Mufasa:
View attachment 842659

Sonic:
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It would've been silly for theaters to drop Mufasa before Sonic - and they were smarter than that. Sonic had the run of an MCU film. It had a giant fan rush at the start, then it dies down because what is left is just the general audience, who don't have as much of an interest in Sonic. It’s not even expected to reach $500M anymore.

Nobody is rushing out to see the newest Lion King film opening night/weekend (except for me). In fact, Mufasa made more on its 2nd weekend than it did opening weekend. They won't rush out to see it, but they will see it eventually. Anyone who thought the general audience had more interest in Sonic than The Lion King is delusional. Lion King is loved worldwide, it will always have legs at the box office. The Broadway production makes more now than it ever did, and still breaks its own records, even 25 years later.

 

[Hawkeye_2018]

I am just glad that Mufasa is gong to wind up beating Sonic 3. I love when trolls are wrong.

I bet Disney would rather have the profits that Sonic 3 has though