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

[Sirwalterraleigh]

So basically they're going to try and get D+ profitable so that the parks don't have to sustain it, which would allow them to finally reinvest as they'd probably like.

There’s a flaw in that plan…but at least it’s a semi-reasonable “plan”

I don’t think they want to spend in parks though…even though it’s always required…not to mention the financials behind streams do not translate to the goals.

 

[Sirwalterraleigh]

Yesterday he completely dodged the question in WDW attendance and said we wouldn’t see any real ramp up in the WDW parks development until the latter part of the decade.

Can’t help but think of those two things in context with one another.

…like the Napoleon matador he is
I’ve gone blue in the face for a year and half warning this was coming…and it’s here. The situation/details are absolutely unprecedented for Orlando

The trouble is just starting

 

[drizgirl]

So basically they're going to try and get D+ profitable so that the parks don't have to sustain it, which would allow them to finally reinvest as they'd probably like.

So let me get this straight. They're going to keep using the parks as an ATM until D+ takes off. Then they're going to decide to start actually upgrading the ATMs?

There's only one thing that will get them to take better care of the ATM terminals. And it has nothing to do with D+. They will ride those ATMs hard until they stop spitting out cash.

 

[Sirwalterraleigh]

So let me get this straight. They're going to keep using the parks as an ATM until D+ takes off. Then they're going to decide to start actually upgrading the ATMs?

There's only one thing that will get them to take better care of the ATM terminals. And it has nothing to do with D+. They will ride those ATMs hard until they stop spitting out cash.

They’re already losing customers due to price and stagnation…what could go wrong?

What the Sweater Song guy said yesterday is this: “we aren’t spending in parks (on any REASONABLE timeframe)…but we need more money from them”

When someone tells you who they are…BELIEVE them

 

[MisterPenguin]

So let me get this straight. They're going to keep using the parks as an ATM until D+ takes off. Then they're going to decide to start actually upgrading the ATMs?

There's only one thing that will get them to take better care of the ATM terminals. And it has nothing to do with D+. They will ride those ATMs hard until they stop spitting out cash.

TWDC started a new venture which is predicted to become profitable over the course of five years.

Where do you think they were going to get the money to start up that new venture?

 

[Sirwalterraleigh]

TWDC started a new venture which is predicted to become profitable over the course of five years.

Where do you think they were going to get the money to start up that new venture?

That’s not the unreasonable part

The unreasonable part is that they are using 1990’s expectations of cable revenue and ad revenue to predict their future.
But there’s fundamental/structural reasons in media/society why that’s a tremendously risky bet. And why nobody on Wall Street trusts streams. There’s about 5 articles in the financials a week about it…and that’s been going on for years with little money returned to date.

 

[drizgirl]

TWDC started a new venture which is predicted to become profitable over the course of five years.

Where do you think they were going to get the money to start up that new venture?

At the ATM of course. But they always have an excuse. Remember when they were using WDW as the ATM for the expenses at Shanghai?

I just don't see them all of a sudden saying "We've taken enough. It's time to give back."

 

[MisterPenguin]

I just don't see them all of a sudden saying "We've taken enough. It's time to give back."

<double checks the title of this thread...>

Ok.

 

[Sirwalterraleigh]

I just don't see them all of a sudden saying "We've taken enough. It's time to give back."

The antidote to that is the CONSUMERS saying the same thing back.

And why I don’t blame Disney in Orlando. It. Is. Us!

So it’s jersey week…lots of contacts/friends there right now…been getting “it’s awful…we have to buy our way out of it…” messages all week.

That’s “good business”?

What could go wrong?

 

[Sirwalterraleigh]

<double checks the title of this thread...>

Ok.

Did you notice he said the exact opposite of that yesterday?

 

[lazyboy97o]

Yes. I fully own my initial post was in the context of a more emotional response on a Disney message board. If we are going to talk about a more nuanced investment conversation, you are right. If they genuinely have no intent of spending this money and have "manufactured" it, we could have legitimate compliance issues brewing. What I should have said (as I hopefully clarified) was that this really suggests there are no concrete plans right now. These statements of spend have some truth, but it is blue sky ear marks right now IMHO. These statements are more likely being made (IMHO) to give the analysts something to see and to have something to say to any Epic Universe questions. Theme parks are an odd space because some key analysts often don't have a lot of knowledge of how the space works - especially as part of a larger organization. Disney (and Comcast, Six Flags, etc.) have gotten the luxury of setting the narrative a bit because the analyst pool is relatively niche (vs. things like content, branded consumer products and even hotels). But, that is a separate, much more minor conversation.

I will say I'm not understanding your second point on the rebalancing. They would announce and follow through on actual expansion plans and have a roadmap of where this spend is going. But, I'm not saying that's the right thing to do or even the financially responsible thing. And I think that's my confusion. My point is this $60B spend talk is really a bit of distraction from TWDC. It's not accompanying concrete 36 month plans. It's not even accompanying separately announced major expansions. So, I just don't see it as guidance that has much value today as a fan of the parks. There are many ways they could spend it now or in the future that would be wonderful. There are significantly more ways that would be problematic. And, on top, ways they could responsibly decide not to spend it at all. So, my point is simply that this statement doesn't give me much hope or despair, pro or con. And I'm a little disappointed Disney is doing something like that officially when we have fairly little on the official table in the coming years.

My point on the rebalancing, my whole point, is that this is how an actual serious plan would work. You would want it to take time. You also want to leave in the ability to be flexible lest you get stuck committed to something you know isn’t going to work (see Fast & Furious: Supercharged). If anything, several parts of Disney have been plagued by content having to serve a fixed schedule instead of things being driven more by the needs of the content.

I’d love to know which posts of mine suggests I have high or even moderate expectations for the results of this planned investment. But not having high expectations, realizing that serious issues with project delivery remain unaddressed are not reasons to just make things up in fits of disappoint and anger. All it does is undermine the credibility of genuine criticisms.

 

[drizgirl]

<double checks the title of this thread...>

Ok.

Yep. I'll believe it when I see it. They announce tons of stuff they pull back on later.

 

[pdude81]

I don't really expect them to be doing much in Orlando until this CFTOD business is resolved. So I'm disappointed they aren't ramping up more now in the parks, but not surprised.

 

[LSLS]

I don't really expect them to be doing much in Orlando until this CFTOD business is resolved. So I'm disappointed they aren't ramping up more now in the parks, but not surprised.

True. But the bigger question is how does the downturn in attendance factor in if it doesn't improve? Do they start significant investment in WDW because the attendance is down and they want to get it back up, or do they transition a lot of this money to other parks?

 

[pdude81]

True. But the bigger question is how does the downturn in attendance factor in if it doesn't improve? Do they start significant investment in WDW because the attendance is down and they want to get it back up, or do they transition a lot of this money to other parks?

It's hard to say. Previously they would have scaled back if revenue projections drop... but if they have attendance drops that coincide with EU opening then that might send things a different way. Plus it all depends on the whether we hit a recession in short order or squeeze through. I am more of a pixie duster so I see the glass half full here.

More to your point I don't think the money goes to other parks. I think they either spend what they planned in Orlando or they simply cut back.

 

[Epcot82Guy]

My point on the rebalancing, my whole point, is that this is how an actual serious plan would work. You would want it to take time. You also want to leave in the ability to be flexible lest you get stuck committed to something you know isn’t going to work (see Fast & Furious: Supercharged). If anything, several parts of Disney have been plagued by content having to serve a fixed schedule instead of things being driven more by the needs of the content.

I’d love to know which posts of mine suggests I have high or even moderate expectations for the results of this planned investment. But not having high expectations, realizing that serious issues with project delivery remain unaddressed are not reasons to just make things up in fits of disappoint and anger. All it does is undermine the credibility of genuine criticisms.

I don't think we are actually disagreeing. I was addressing the sentiment that people were getting excited that Disney had solid plans for investment and we would definitely see $60B over the next ten years, with many of the ideas already in flight and ready to execute. In a way, it's like getting excited for those pants or that dress you will wear next year when you lose this weight. You can have ideas and even plans for doing so. But, I'm not going to get excited until I see concrete action (or at least a concrete action plan).

I think we are aligned on your last statement. I personally think it is way more blue sky and undefined than I get the sese you do. So, that is where my anger and emotion comes from. This isn't a formal investment announcement. It's an excitement driver IMHO (because they don't have any concrete good news in the immediate future to actually report).

 

[flynnibus]

They will ride those ATMs hard until they stop spitting out cash.

Bob's park strategy for the last decade... of course he's going to fall back to it

He'll just get rid of the nitpick charges to save some face... and lean into the prices of the stuff people are used to paying for.

 

[Basil of Baker Street]

Sweater just bought himself 5 years to come up with reasons not to do it.

 

[HauntedPirate]

View attachment 753407

Bob's park strategy for the last decade... of course he's going to fall back to it

He'll just get rid of the nitpick charges to save some face... and lean into the prices of the stuff people are used to paying for.

Yep. Don't forget - He'll want to build some more DVC, because that's the other page of his playbook (which also incorporates higher prices).

 

[Sirwalterraleigh]

I’m excited to see what happens to attendance when the parks become museums in 5 years.

…that clock is ticking