News Disney plans to accelerate Parks investment to $60 billion over 10 years

[SteveAZee]

CoP is an attraction unto itself because of the history.

I agree. It's one of the few memories I have of early childhood, seeing it at the NY World's Fair... and would miss it if/when it goes, but between attendance and wear-and-tear, at some point it will get closed.

 

[tanc]

I'd love to see a mostly original design park again like DisneySea, but it will never happen. I can't even imagine what they will do with 60 billion honestly. I just hope they don't pull another RoR situation and have capacity issues. My concern with any of these IPs is their ability to stay relevant. Things come and go over time, but at least certain original ideas in the parks are timeless. But as Steve said in another thread, they don't get enough from non IP anymore.

 

[Disstevefan1]

So ripping and replacing, along with under-building and over-spending on what they did do, after a decade of not building a damn thing somehow warrants celebration? How much net-new has happened under Iger?

You can't expect that the same person who created the problem is going to fix it.

 

[SteveAZee]

MK 1971
EP 1982
HS 1989
AK 1998

I'd say we're overdue!

Do they have the land? Yes.
Would people go? Yes.
Would it make money? Yes.

What's the problem again?

At the moment, the ROI of building a new park is a lot lower than adding capacity to existing parks. There's also a concern about a new park cannibalizing attendance at three of the four existing parks. If it gets to the point where all four parks are built out and bursting at the seams with guests... then it makes sense.

 

[Disstevefan1]

At the moment, the ROI of building a new park is a lot lower than adding capacity to existing parks. There's also a concern about a new park cannibalizing attendance at three of the four existing parks. If it gets to the point where all four parks are built out and bursting at the seams with guests... then it makes sense.

Speaking of ROI, how about those movies and D+

 

[Tony the Tigger]

How long ago was that?

April of this year (but you already knew that).

So did you. Yet, you still made some comment about not one shovel having moved yet.

 

[HauntedPirate]

So did you. Yet, you still made some comment about not one shovel having moved yet.

And they never even announced an actual project before increasing the number nearly 4x, which is what I said. They haven't put a shovel into the ground on a new project in over a year. These are facts, not opinions or emotions.

Bottom line: They have nothing right now but blue sky ideas and Bob's Blue Ocean beliefs. And marketing announcements to keep the sheep in the field.

 

[SplashJacket]

At every announcement that Disney was pumping x billions into their movies or streaming, there has always been cries about “imagine if they put that kind of money to the parks.”

Well now they’re planning to, and all you get are complaints about how they’re not going to do it. They might scale it back, sure, but would you rather them announce spending cuts unilaterally across its park division to their investors? I’m honestly not sure what a lot of you want, besides something to complain about, of course.

 

[Jrb1979]

At every announcement that Disney was pumping x billions into their movies or streaming, there has always been cries about “imagine if they put that kind of money to the parks.”

Well now they’re planning to, and all you get are complaints about how they’re not going to do it. They might scale it back, sure, but would you rather them announce spending cuts unilaterally across its park division to their investors? I’m honestly not sure what a lot of you want, besides something to complain about, of course.

Shovels in the ground would be nice. Right now all this is WORDS.

 

[MisterPenguin]

Movies and streaming are losers

Netflix has been making a profit.

 

[lentesta]

But Hank Lonely’s catalogue has been acquired by Scooter Braun

One day, many years from now, I'll tell y'all the Starcruiser stories that can't be told in public right now.

 

[HauntedPirate]

At every announcement that Disney was pumping x billions into their movies or streaming, there has always been cries about “imagine if they put that kind of money to the parks.”

Well now they’re planning to, and all you get are complaints about how they’re not going to do it. They might scale it back, sure, but would you rather them announce spending cuts unilaterally across its park division to their investors? I’m honestly not sure what a lot of you want, besides something to complain about, of course.

How about: Sensible project spending, actual expansion of capacity, and some original ride ideas instead of every damn thing requiring movie IP? Nah, that's too logical. Better to double/triple/quadruple down on Iger's strategies from the past 15 years, that'll fix everything.

 

[Rosso11]

Back of napkin math for you.

Take a new ride like Guardians. Assume a capacity of 2000 an hour. Assume half of distribution goes to $20 individual Lightning lane. Assume 14 hours. Of operation. Simple math.

1000(14)(20)(365)=$102,200,000.

That’s a hundred million dollars in free revenue (you have 98% or similar margins).

If you can sustain those prices or similar for 4 years, you generate $400,000,000 in free revenue, which likely pays for the entire ride construction. The ILL revenue cycle will force them to build new rides frequently (and at every park) to ensure they’re keeping up up demand, and the revenue generated will ensure those rides are paid for.

The new attraction will bring other guests which will increase tickets and pay for labor elsewhere and generate additional revenue. Prevents the works from getting stale, etc.

Both major players in the theme park industry realized the goldmine they’ve been sitting on, and we’re officially in the arms race. It’s exciting for fans, and everyone in the industry.

This is the main reason I believe these big expansions are now finally going to happen. The last few years have been proof of concept for Individual lighting lanes as far as the huge revenue it’s generating. Each one of these new E tickets now have ROI due to LL. It’s similar to the old ticket books where they could see the actual revenue each ride brings in. I’m sure they are drooling at having multiple rides at each park that warrant individual LLs. Right now only MK has been pulling that off and I’m sure they would love even more than 2 per park.

 

[ᗩLᘿᑕ ✨ ᗩζᗩᗰ]

Great! Now let's focus on those shuttered attractions...

 

[Dranth]

Speaking of ROI, how about those movies and D+

I know you don't want to hear it but...

One, D+ will be out of the red soon, close to when they said it would when it was originally announced, so that shouldn’t be an issue much longer. Sure, it stinks that it has been sucking up resources to get to this point but it is something that needed to happen to recover some of the continuing drops in linear going forward.

Two, the movies have certainly had a bad run but this stuff goes in cycles. Fix the spending problem and tweak the content here and there and they are right back in the mix.

Bottom line is the studios have helped the company more than once when the parks have been down and the parks have done the same when the situation was reversed. Nothing new here in that sense and further proof that they need both segments.

 

[Dranth]

At every announcement that Disney was pumping x billions into their movies or streaming, there has always been cries about “imagine if they put that kind of money to the parks.”

Well now they’re planning to, and all you get are complaints about how they’re not going to do it. They might scale it back, sure, but would you rather them announce spending cuts unilaterally across its park division to their investors? I’m honestly not sure what a lot of you want, besides something to complain about, of course.

This.

If someone wants to be skeptical about what they put in or where they put it fine. I can see that as a legit issue for many people and makes sense. Want to believe whatever they announce will be cut back in some way, sure, statistically you are almost guaranteed to be right, but why doubt that they are going to spend at all?

 

[doctornick]

Netflix has been making a profit.

Hulu too, no? At least at times?

 

[MisterPenguin]

Hulu too, no? At least at times?

Yes, it has been profitable.

 

[ParentsOf4]

Where is @ParentsOf4 to indicate how this compares with current/past spending with some nice graphs?

Time for a chart!

At first I thought, wow! $60B over 10 years at domestic & international theme parks, resorts, and DCL - pretty good!

But then I was shocked at how ordinary this is compared to previous Iger years, and poor compared to Eisner years and before. To appreciate this, I have to explain the following chart.

This chart looks at current year's Parks & Resort (P&R) revenue compared to the average P&R capex spent over the next 10 years.

For example, Disney announced plans to spend $60B over the next 10 years, an average of $6B per year. If 2023's P&R revenue is $30B, then this works out to 20% ($6B / $30B) in 2023.

For 2023 and before, actual P&R revenue and capex are used. For 2024 and later, I simply assume an average of $6B P&R capex per year.

When you chart what Disney has done in the past compared to what they've announced, it's just not impressive:

 

[flyerjab]

Time for a chart!

At first I thought, wow! $60B over 10 years at domestic & international theme parks, resorts, and DCL - pretty good!

But then I was shocked at how ordinary this is compared to previous Iger years, and poor compared to Eisner years and before. To appreciate this, I have to explain the following chart.

This chart looks at current year's Parks & Resort (P&R) revenue compared to the average P&R capex spent over the next 10 years.

For example, Disney announced plans to spend $60B over the next 10 years, an average of $6B per year. If 2023's P&R revenue is $30B, then this works out to 20% ($6B / $30B) in 2023.

For 2023 and before, actual P&R revenue and capex are used. For 2024 and later, I simply assume an average of $6B P&R capex per year.

When you chart what Disney has done in the past compared to what they've announced, it's just not impressive:

View attachment 743920

Love your posts!

What I wonder is how the $17 Billion for WDW over the next 10 years that Iger mentioned fits into all this.