News Disney and Fox come to terms -- announcement soon; huge IP acquisition

[Stripes]

That’s why a 5th gate may effectively do nothing...if you go there instead of going to Epcot and buying spaten from the dudes in the lederhosen.

Yep. Which is why Disney has to make sure that all their parks have something compelling. We know that by 2025, all the WDW parks will have plenty of new compelling rides and experiences, thereby significantly lessening the potential for cannibalization, and instead targeting the remaining 30% of the Orlando marketshare.

I'm not discounting the 7 day theory whatsoever. I believe it's true, and it has been a major factor preventing the addition of another gate, but times are changing and I don't think, financially, that factor matters as much as it used to.

 

[CaptainAmerica]

But you missed how that average “7” tied into all of this...the average visit grew greatly under the Eisner era expansion but has dead ended and I bet dimes to dollar has remained so or even declined since DAK. That isn’t an Orlando, disney thing...it’s your jerk boss not giving you more than 5 days or getting back for lacrosse camp or before winter break is over...

That’s why a 5th gate may effectively do nothing...if you go there instead of going to Epcot and buying spaten from the dudes in the lederhosen.

This guy gets it. Me in a different thread about a year ago:

They will never build a 5th gate. Never. Their bread-and-butter guest is the American family of 4 and the American family of 4 has a relatively fixed vacation budget and a similarly fixed number of vacation days. A 5th gate would expand WDW beyond what the average family can do in a week but the average family isn't going to stay longer than a week no matter what because they don't have the money or the vacation time. The ROI isn't there because the idea of a "week long vacation" creates diminishing returns when you try to expand beyond that point.

I'm not discounting the 7 day theory whatsoever. I believe it's true, and it has been a major factor preventing the addition of another gate, but times are changing and I don't think, financially, that factor matters as much as it used to.

I think vacation time is the bigger constraint than the financials. Disney's target guest is probably a middle manager somewhere making $95,000 a year who gets three weeks vacation time. One week is for the "big" family vacation, another week gets used up around Christmas, and the third week is for taking individual days here an there to extend long weekends. Even if the financials worked, it doesn't give that guy a fourth week of vacation.

 

[seascape]

Ok...but how does that play into this discussion? And make no mistake this is the best one we’ve seen for awhile....

70% is lower than Disney wants, but is acceptable at higher prices. 60% would be catstrophic for them. Like it or not: there is a limited pool of customers. They world isn’t “increasing its value”...it’s redistributing it and concentrating on gilded age levels.

They could build a fifth gate now...but you need another 10-15 annual visitors to make it worth while and there isn’t a line stretching to Indiana waiting to go. Those that want to go are already going and that’s why the levels have only increased gradually - but still impressively - since the phase 2/3 expansion period ended.

In 1998 and 2009 Disney had 75% of the Orlando themepark market. In all other years it was under 75% and went as low as 68%. Disney will gain Market share in 2020 and 2021 and I expect it to be right around 75%. AK should be up another 10% this year as Pandora was not open the first 5 months last year. Hollywood Studios should also be up this year as Toy Story should add something but wait till Star Wars. Then there are 4, yes 4 new rides coming to Epcot. Guardians of the Galaxy, Ratatouille, United Kingdom and Wonders of Life. 65 million is the minimum attendance Disney can count on in 2020 and more in 2021.

 

[Indy_UK]

Universal can open as many parks as they like but it’s more important what you fill them with. There’s masses of things they can in UO or IOA and make them full days before opening a 3rd gate (Dont care what anyone says, Volcano Bay is not a 3rd gate)

What Disney is doing is the right thing. Beefing up what they already have in the existing parks and increase the ‘Value’ per park. By the time you add the water parks and Disney Springs then there’s enough there. Cruisline is a great example where people will take another ‘bolt-on’ holiday like already mentioned.

 

[smile]

important what you fill them with.

how bout the likes of more potter, plenty of nintendo, and a dash of lotr?
... think those'll click a gate?

 

[Indy_UK]

how bout the likes of more potter, plenty of nintendo, and a dash of lotr?
... think those'll click a gate?

Lord of the Rings......Sure Nintendo.....Absolutely Potter......Isn’t there enough already?

 

[Sirwalterraleigh]

Universal can open as many parks as they like but it’s more important what you fill them with. There’s masses of things they can in UO or IOA and make them full days before opening a 3rd gate (Dont care what anyone says, Volcano Bay is not a 3rd gate)

What Disney is doing is the right thing. Beefing up what they already have in the existing parks and increase the ‘Value’ per park. By the time you add the water parks and Disney Springs then there’s enough there. Cruisline is a great example where people will take another ‘bolt-on’ holiday like already mentioned.

Disney is only doing that because they sat on their cans and actually closed things while Comcast cut into thier market share...

The consumer shouldn’t forget that...but they will/have already

 

[Dutch Inn '76]

The mystery to me is why does anyone want a 5th gate in these circumstances? Two of the existing Parks are woefully incomplete right now. As a result, the MK is overstuffed with guests. Let's get Epcot and DHS built out, and maybe even add a few more attractions to AK; then I'll be interested in a 5th gate. Right now, I'd rather The Mouse concentrate on making 4 gates GREAT.

 

[Quinnmac000]

Comcast now has 90 billion in financing for both Fox and Sky...

In the statement, Comcast said it “confirms that it is considering, and is in advanced stages of preparing, an offer for the businesses that Fox has agreed to sell to Disney.” While the company said that “no final decision has been made,” it said that “any offer for Fox would be all-cash and at a premium to the value of the current all-share offer from Disney.” Comcast said, “the work to finance the all-cash offer and make the key regulatory filings is well advanced.”

The statement added, “The structure and terms of any offer by Comcast, including with respect to both the spin-off of “New Fox” and the regulatory risk provisions and the related termination fee, would be at least as favorable to Fox shareholders as the Disney offer.”

https://www.reuters.com/article/us-...challenge-disney-for-fox-assets-idUSKCN1IO1P3

And also before Seascape comes with statements of Brian Roberts power is bad...difference is with Roberts he is vested for life in Comcast success long term while Disney is only focusing on short term gains.

 

[seascape]

Comcast now has 90 billion in financing for both Fox and Sky...



https://www.reuters.com/article/us-...challenge-disney-for-fox-assets-idUSKCN1IO1P3

And also before Seascape comes with statements of Brian Roberts power is bad...difference is with Roberts he is vested for life in Comcast success long term while Disney is only focusing on short term gains.

Please, you really thing Disney wanting to buy Fox and Sky is not for the long term but Comcast wanting them is!

 

[pdude81]

The mystery to me is why does anyone want a 5th gate in these circumstances? Two of the existing Parks are woefully incomplete right now. As a result, the MK is overstuffed with guests. Let's get Epcot and DHS built out, and maybe even add a few more attractions to AK; then I'll be interested in a 5th gate. Right now, I'd rather The Mouse concentrate on making 4 gates GREAT.

IMO the lines suck pretty much everywhere, so any additional attractions would help... and a new park would certainly add more attractions. As a consumer I want more things to see and do wherever they are, and if I had to choose between closing old rides for refurb or getting new ones in a 5th gate, my preference would be the latter. I can see why Disney doesn't want to do it because they won't get a ton of additional guest without using the time stone and changing that Marvel Deal with Universal so they could open a Marvel thrill park full of coasters and pull back some people who tend to go to other theme parks more often.

 

[Sirwalterraleigh]

Comcast now has 90 billion in financing for both Fox and Sky...



https://www.reuters.com/article/us-...challenge-disney-for-fox-assets-idUSKCN1IO1P3

And also before Seascape comes with statements of Brian Roberts power is bad...difference is with Roberts he is vested for life in Comcast success long term while Disney is only focusing on short term gains.

Roberts is better at this than all the people they’ve had in the Mouse house combined for the last 20 years.

Comcast wins this round...big shot bob didn’t go far enough.

 

[Sirwalterraleigh]

Please, you really thing Disney wanting to buy Fox and Sky is not for the long term but Comcast wanting them is!

In a word: yes.

For bob.

It’s still a longterm investment for Disney...but I think the content and Hulu were the prize so bob could get his network up and claim victory over...cough...the problems with the “sports channel that shall not be named”...

...because that doesn’t affect anything...certainly not parks

 

[Rodan75]

I'll be honest, I'm surprised Comcast is really going through with this. My opinion on this is changing, either this is the biggest game of chicken ever, or they are really willing to add this much debt to their bottom line. If they are willing to finance $90B, then why not $100 or $120? And as @seascape and others have said, both SKY and FOX also come with their own debt.

1. I don't know how Disney competes, they've never been willing to bet the whole farm on an acquisition (at least not in recent history).
2. Maybe it makes sense for Disney to walk away from Fox, put the money they were willing to spend on the acquisition and put it into Content creation and into the Parks.
3. What does this much debt mean for Comcast, does this kill their wireless ambitions? does this slow their Parks and Resorts expansion plan? There will be real world impact to Comcast pulling in this much debt.

 

[Sirwalterraleigh]

I'll be honest, I'm surprised Comcast is really going through with this. My opinion on this is changing, either this is the biggest game of chicken ever, or they are really willing to add this much debt to their bottom line. If they are willing to finance $90B, then why not $100 or $120? And as @seascape and others have said, both SKY and FOX also come with their own debt.

1. I don't know how Disney competes, they've never been willing to bet the whole farm on an acquisition (at least not in recent history).
2. Maybe it makes sense for Disney to walk away from Fox, put the money they were willing to spend on the acquisition and put it into Content creation and into the Parks.
3. What does this much debt mean for Comcast, does this kill their wireless ambitions? does this slow their Parks and Resorts expansion plan? There will be real world impact to Comcast pulling in this much debt.

I think this deal ultimately was about gaining control of Hulu...the content was a bonus.
Disney needs a steaming platform and they are downright awful at tech development.

As far as “how far they will go?” Under Eisner - specifically Capitol cities - he wouldn’t be denied...Iger has faired better from a value perspective.

But Comcast provides Internet service...and that’s why they have a leg up on Disney in this scenario. Unlike cable tv - that’s not going anywhere...it will only intensify and they can hedge debt much more effectively than Disney.

 

[Rodan75]

I think this deal ultimately was about gaining control of Hulu...the content was a bonus.
Disney needs a steaming platform and they are downright awful at tech development.

As far as “how far they will go?” Under Eisner - specifically Capitol cities - he wouldn’t be denied...Iger has faired better from a value perspective.

But Comcast provides Internet service...and that’s why they have a leg up on Disney in this scenario. Unlike cable tv - that’s not going anywhere...it will only intensify and they can hedge debt much more effectively than Disney.

But Telco is a Capital intensive business. It isn't wise for Comcast to tie up so much debt, ISPs do have local competition and national competition with 5G services rolling out in the next couple of years, they have to fight that war domestically. Buying Hulu is small potatoes for any of these players. Disney has the technology for streaming in the BAMTech acquisition.

Not saying this isn't all a wise decision for Comcast - it could be their best long term play, I'm just surprised they are willing to go to these depths to get it. And I don't think the regulatory environment will be as friendly to Comcast as they could have been to Disney, because the distribution angle in this.

 

[the.dreamfinder]

I'll be honest, I'm surprised Comcast is really going through with this. My opinion on this is changing, either this is the biggest game of chicken ever, or they are really willing to add this much debt to their bottom line. If they are willing to finance $90B, then why not $100 or $120? And as @seascape and others have said, both SKY and FOX also come with their own debt.

1. I don't know how Disney competes, they've never been willing to bet the whole farm on an acquisition (at least not in recent history).
2. Maybe it makes sense for Disney to walk away from Fox, put the money they were willing to spend on the acquisition and put it into Content creation and into the Parks.
3. What does this much debt mean for Comcast, does this kill their wireless ambitions? does this slow their Parks and Resorts expansion plan? There will be real world impact to Comcast pulling in this much debt.

Acquiring OLC, possibly with a Japanese partner like Nintendo, for $25-30 Billion with major investments in all resorts makes more sense.

More thoughts later, I guess?

 

[Sirwalterraleigh]

But Telco is a Capital intensive business. It isn't wise for Comcast to tie up so much debt, ISPs do have local competition and national competition with 5G services rolling out in the next couple of years, they have to fight that war domestically. Buying Hulu is small potatoes for any of these players. Disney has the technology for streaming in the BAMTech acquisition.

Not saying this isn't all a wise decision for Comcast - it could be their best long term play, I'm just surprised they are willing to go to these depths to get it. And I don't think the regulatory environment will be as friendly to Comcast as they could have been to Disney, because the distribution angle in this.

Oh I’m not saying it’s wise...i’m Saying they have more flexibility/sell it to Wall Street.

Even though it’s a nightmare...providing service guarantees monthly bills to the masses...something disney wouldn’t delve into because of the overhead.

But you can sell it to Wall Street.

Comcast sucks...everybody pays every month.

 

[Sirwalterraleigh]

Acquiring OLC, possibly with a Japanese partner like Nintendo, for $25-30 Billion with major investments in all resorts makes more sense.

More thoughts later, I guess?

Then they would lose the sweet deals in Tokyo...they build what they want, don’t really pay anything, and sell mickey plushies by the ton.

 

[Rodan75]

Acquiring OLC, possibly with a Japanese partner like Nintendo, for $25-30 Billion with major investments in all resorts makes more sense.

More thoughts later, I guess?

I had assumed OLC was always on Disney's radar at some point. I think the success they are seeing in Paris (yes, after letting it purposefully wither) may inspire them to be more aggressive in their ownership stakes.

They could re-focus on IP acquisition and go after (Mattel? Hasbro?) or they could go another route and go after both Sony Entertainment and Sony Interactive? EA? Although I'm not sure if any of those give the global reach they were targeting with Fox.