Hmmm...wonder if this story is totally factual or not? if it is, must be a wonderful time to visit Disney World with shorter wait times right now!

[Chef Mickey]

Yes.... Disneys board is no different than many other Corporate boards. Some are on the board because they really care about the operations they oversee, others are campaigned to be placed there only to be a support entity that votes the way the chairman wants it to go, others are around the table because of the status they hold by being a member of the xyz corporation and it improves their social/ professional status among their peers. Boards can influence good or bad which has been shown in the past by how many corporations have failed or been on the brink of failure.
Iger has had his way for far too long which shows by how Disney had under progressed over the last few ( actually more) years of his tenure.

I frankly don’t see how Iger isn't gone.

 

[JIMINYCR]

I frankly don’t see how Iger isn't gone.

A combination of his influence and power is far and deep, holding him in place and they haven't made a real determined effort to search outside for a replacement in earnest. Like some other corporations that have kept their CEO's who should have been dropped for massive blunders that have been costly, they are fearful of making the right decision. Even though they continue bleeding out.

 

[Calmdownnow]

I've also been concerned for a while because Disney's primary reason for increased revenue in parks (per their own financial filing mind you) has been increased prices.

Genuine question: if increased revenue reflects increased prices, does greatly increased tariffs on imported t-shirts, souvenir merchandise etc, automatically raise revenue (without raising profit, unless % margins are also increased when goods are imported and sold)? If so. revenue isn't a good measure of trading health. Or am I not reading this correctly?

 

[Calmdownnow]

For a British couple, it was their first visit. They were already dreading leaving and will be planning another trip soon!

It's wonderful that their American interactions was with you. My last American interaction (at the Poly) was with a man my sister and I nicknamed "Machine Gun Dick" because he lectured us at great length about how awful the UK was because our country insisted on gun owners having licenses. He also accused us of being communists because we have a health care system that is free at the point of delivery. Afterwards, we agreed that we didn't want to engage in general chitchat with random Americans at resort hotels.

 

[Chef Mickey]

A combination of his influence and power is far and deep, holding him in place and they haven't made a real determined effort to search outside for a replacement in earnest. Like some other corporations that have kept their CEO's who should have been dropped for massive blunders that have been costly, they are fearful of making the right decision. Even though they continue bleeding out.

What is more motivating than watching other companies double while you decline? It's insane and to me indicates some sort of weird behind the scenes corruption.

 

[Stripes]

It's wonderful that their American interactions was with you. My last American interaction (at the Poly) was with a man my sister and I nicknamed "Machine Gun Dick" because he lectured us at great length about how awful the UK was because our country insisted on gun owners having licenses. He also accused us of being communists because we have a health care system that is free at the point of delivery. Afterwards, we agreed that we didn't want to engage in general chitchat with random Americans at resort hotels.

So you got one of those, did you? So sorry about that!

Pretty bold of him to assume some strangers were interested in his unsolicited political takes. Must be something in his water supply.

 

[Chef Mickey]

It's wonderful that their American interactions was with you. My last American interaction (at the Poly) was with a man my sister and I nicknamed "Machine Gun Dick" because he lectured us at great length about how awful the UK was because our country insisted on gun owners having licenses. He also accused us of being communists because we have a health care system that is free at the point of delivery. Afterwards, we agreed that we didn't want to engage in general chitchat with random Americans at resort hotels.

Not to be argumentative, but I don't believe he called you communists without provocation...I think you're letting your own beliefs exaggerate your story. In general, this isn't a normal human interaction, unsolicited. You likely were giving your positions too, but left that part out.

Maybe don't generalize Americans tho. If that did happen, that's not normal. America was given a second amendment by its Founders and for a reason. You can disagree with it, but that's why it's different here.

Bringing it back to the topic, we have many visitors from the UK at Disney and they are generally quite impressed from my experience.

 

[networkpro]

Genuine question: if increased revenue reflects increased prices, does greatly increased tariffs on imported t-shirts, souvenir merchandise etc, automatically raise revenue (without raising profit, unless % margins are also increased when goods are imported and sold)? If so. revenue isn't a good measure of trading health. Or am I not reading this correctly?

It does upset the calculus that Disney had in place to repatriate any profits from thier Communist China parks. The communist government (that's what they call themselves) is making increasing difficult to move any funds to anywhere not in thier control. Disney has been using merchandise production for that function.

 

[Sirwalterraleigh]

There doesn’t have to be some political conspiracy to believe Disney could be struggling with visitors from their own mismanagement.

Disney’s incompetence is well documented and well reflected in their stock performance and earnings over the last 10 years. During this time, Parks have been the only decent business with the strategy of simply raising prices.

I was just there myself and saw the exact same thing. I’ve never waited 5 minutes for Space Mountain at 2pm, but I did twice in September.

Sure it’s anecdotal, but it’s a data point.

It’s not inconceivable that this margin extraction strategy at Parks has caught up with them and is no longer working. Also, Disney chose to have public political battles, an unforced error regardless of your side.

Disney has some of the worst management in the S&P500. They have somehow to lose 15% of their value while the market has nearly doubled the last 5 years. Truly insane.

 

[Sirwalterraleigh]

It's wonderful that their American interactions was with you. My last American interaction (at the Poly) was with a man my sister and I nicknamed "Machine Gun Dick" because he lectured us at great length about how awful the UK was because our country insisted on gun owners having licenses. He also accused us of being communists because we have a health care system that is free at the point of delivery. Afterwards, we agreed that we didn't want to engage in general chitchat with random Americans at resort hotels.

Yeah…we got a lot of those…

They’re called “idiots”

One thing I do notice about the poly in particular at times is some of the People left behind by the passage of time frequent there…I can only assume they find 70’s
Brown “soothing”?

 

[Sirwalterraleigh]

It does upset the calculus that Disney had in place to repatriate any profits from thier Communist China parks. The communist government (that's what they call themselves) is making increasing difficult to move any funds to anywhere not in thier control. Disney has been using merchandise production for that function.

Those parks were always about sweatshop access…nothing more

 

[Sirwalterraleigh]

Not to be argumentative, but I don't believe he called you communists without provocation...I think you're letting your own beliefs exaggerate your story. In general, this isn't a normal human interaction, unsolicited. You likely were giving your positions too, but left that part out.

Maybe don't generalize Americans tho. If that did happen, that's not normal. America was given a second amendment by its Founders and for a reason. You can disagree with it, but that's why it's different here.

Bringing it back to the topic, we have many visitors from the UK at Disney and they are generally quite impressed from my experience.

I disagree…this account reminds a lot of my home country…where people not only pride themselves on a lack of knowledge…they’ve become increasingly vocal in the last dozen years of being more arrogant and demonstrating their lack of knowledge

As far as the “reason” goes…that maybe the most simple thing to understand that few Seem to? It requires reading and maybe 30 minutes of historical research though…that’s a heavy lift

 

[Sirwalterraleigh]

I frankly don’t see how Iger isn't gone.

A combination of his influence and power is far and deep, holding him in place and they haven't made a real determined effort to search outside for a replacement in earnest. Like some other corporations that have kept their CEO's who should have been dropped for massive blunders that have been costly, they are fearful of making the right decision. Even though they continue bleeding out.

Because Roy failed…when you break it down

And Steve Jobs really poured gas on the fire

A low talent Hollywood stoolie was allowed to consolidate complete control and turn it into a corporate dictatorship. No guardrails…no checks

So now you have money people telling him what they want to hear in private and him repeating it in public and attempting to not look the fool by draining every ounce a of 100 year old brand to do it. Until he leaves and/or dies…which has a 99% chance of being on the same day.

…but I never really thought about it much before just now

 

[StarWarsGirl]

Genuine question: if increased revenue reflects increased prices, does greatly increased tariffs on imported t-shirts, souvenir merchandise etc, automatically raise revenue (without raising profit, unless % margins are also increased when goods are imported and sold)? If so. revenue isn't a good measure of trading health. Or am I not reading this correctly?

That's a good question, and I am perfectly happy to answer questions like this. However...it's complicated because Disney is a complicated business. Honestly, I graduated top of my class, read 10Ks because I find them interesting...and I only read Disney's last year because it's a monstrosity.

First off, Disney is set to release another 10-K filing. I dislike reading quarterly findings because they're not as robust and they're not audited, meaning they could have errors. So at the time of the last release, tariffs were not a thing.

However, merchandising revenue didn't increase from 2023 to 2024. It dropped a bit.

What I specifically don't like in this statement from a business perspective is these two statements:

That means most of the revenue increase is coming from increased prices, not growth.

This is also interesting as most of their attendance growth was from international attendance, not domestic parks. Concerning as here we go again increasing prices in the domestic parks

And yes, we do want to look wholistically at statements and factor in costs. We can't just factor in revenue, because if revenue increased but the costs are out of control that's an issue. Revenue increases to operating income last year were very similar - 5% increased in revenue to 4% increase in profit. However, with any business, I'd want to see increases in revenue that result from something other than price increases because that's just keeping a business afloat, not setting it up for long term success.

I do thing they are doing the right thing with the new land expansions because this will increase capacity and drive attendance; however, it's going to take a bit to see this reflected. You'll also see a jump in depreciation costs after those lands are built. I don't like the current price increases; however, when they have already shown they have had difficulty keeping attendance up.

Back to merchandising between 2023 and 2024 was fairly consistent in terms of volume; that 1% drop was currency related.

Which brings up a strength with Disney: with their international operations, they're slightly more resistant to tariffs and the effects. As shown above, though, they take that risk back with potentially unfavorable exchange rates. Merchandise pricing and tariffs is a complex issue. That's why you have pricing analysts and cost accountants who specifically determine pricing for merchandising. Because yes, you may need to increase your prices because your cost of goods sold is too high.

I am interested to see the next 10K release. I do expect costs have gone up because it's this chain reaction in the economy. My primary concern with the prior 10K, however, is the statements around park ticket increases because the growth is driven primarily, especially in the US, by the price increases and not because they're offering more services, have increased guest spending, etc.

Now, just because I don't like it doesn't mean we should go to doomsday reactions. This means they need to adjust course, not that they're going out of business (they are nowhere near that point...you want a company that won't be around much longer, see Spirit Airlines), not that they'll sell the parks, etc.

So back to the original question around the effect of tariffs: yes I expect them to affect costs. Yes I want to look at net operating profit and compare the increase to revenue. But until Disney releases their financials, it's hard to say what the exact impact is, and due to the nature of their business, they're a bit more resistant to them than many other businesses, but they have other risk factors.

 

[networkpro]

Yeah…we got a lot of those…

They’re called “idiots”

One thing I do notice about the poly in particular at times is some of the People left behind by the passage of time frequent there…I can only assume they find 70’s
Brown “soothing”?

Not as soothing as a few LapuLapus

 

[Calmdownnow]

Not to be argumentative, but I don't believe he called you communists without provocation...I think you're letting your own beliefs exaggerate your story. In general, this isn't a normal human interaction, unsolicited. You likely were giving your positions too, but left that part out.

Maybe don't generalize Americans tho. If that did happen, that's not normal. America was given a second amendment by its Founders and for a reason. You can disagree with it, but that's why it's different here.

Bringing it back to the topic, we have many visitors from the UK at Disney and they are generally quite impressed from my experience.

Yes he did call us communists. The idiocy about the gun thing was I worked for UK law enforcement and could put him straight on our gun licensing provisions (which don't prevent gun ownership as he seemed to think). It was at this point when he realized that he wasn't talking to us from any basis in fact that he switched subject and started lecturing us on how we were from a communist country because of our health care system Nobody was going to "make him pay for someone else's health care". He really was a walking stereotype. We have met lovely Americans at Disney before, but with some Americans having increasingly weird ideas about life in other countries, we don't want a repeat of the "Machine Gun Dick" conversation.

Just to underline -- we were perfectly polite to him, he just didn't like someone fact checking him and "communist" seemed to be his go-to insult. Of course, it may not have been our Britishness that offended him. It could just be that he wasn't used to women correcting his facts or having professional expertise. Maybe he just didn't like foreigners. Who knows. But he ponied up all of this without any provocation -- in fact we'd been having a perfectly pleasant conversation with his wife about the timing of school holidays in the two countries when he started up on gun laws.

 

[Sirwalterraleigh]

That's a good question, and I am perfectly happy to answer questions like this. However...it's complicated because Disney is a complicated business. Honestly, I graduated top of my class, read 10Ks because I find them interesting...and I only read Disney's last year because it's a monstrosity.

First off, Disney is set to release another 10-K filing. I dislike reading quarterly findings because they're not as robust and they're not audited, meaning they could have errors. So at the time of the last release, tariffs were not a thing.

However, merchandising revenue didn't increase from 2023 to 2024. It dropped a bit.
View attachment 887645

What I specifically don't like in this statement from a business perspective is these two statements:
View attachment 887646

That means most of the revenue increase is coming from increased prices, not growth.

This is also interesting as most of their attendance growth was from international attendance, not domestic parks. Concerning as here we go again increasing prices in the domestic parks
View attachment 887647

And yes, we do want to look wholistically at statements and factor in costs. We can't just factor in revenue, because if revenue increased but the costs are out of control that's an issue. Revenue increases to operating income last year were very similar - 5% increased in revenue to 4% increase in profit. However, with any business, I'd want to see increases in revenue that result from something other than price increases because that's just keeping a business afloat, not setting it up for long term success.

I do thing they are doing the right thing with the new land expansions because this will increase capacity and drive attendance; however, it's going to take a bit to see this reflected. You'll also see a jump in depreciation costs after those lands are built. I don't like the current price increases; however, when they have already shown they have had difficulty keeping attendance up.

Back to merchandising between 2023 and 2024 was fairly consistent in terms of volume; that 1% drop was currency related.

Which brings up a strength with Disney: with their international operations, they're slightly more resistant to tariffs and the effects. As shown above, though, they take that risk back with potentially unfavorable exchange rates. Merchandise pricing and tariffs is a complex issue. That's why you have pricing analysts and cost accountants who specifically determine pricing for merchandising. Because yes, you may need to increase your prices because your cost of goods sold is too high.

I am interested to see the next 10K release. I do expect costs have gone up because it's this chain reaction in the economy. My primary concern with the prior 10K, however, is the statements around park ticket increases because the growth is driven primarily, especially in the US, by the price increases and not because they're offering more services, have increased guest spending, etc.

Now, just because I don't like it doesn't mean we should go to doomsday reactions. This means they need to adjust course, not that they're going out of business (they are nowhere near that point...you want a company that won't be around much longer, see Spirit Airlines), not that they'll sell the parks, etc.

So back to the original question around the effect of tariffs: yes I expect them to affect costs. Yes I want to look at net operating profit and compare the increase to revenue. But until Disney releases their financials, it's hard to say what the exact impact is, and due to the nature of their business, they're a bit more resistant to them than many other businesses, but they have other risk factors.

I find this entire post incredibly H-O-T

…but in a totally plutonic, not weird sorta way

 

[Chi84]

I find this entire post incredibly H-O-T

…but in a totally plutonic, not weird sorta way

It’s very informative.

You should take it for granite.