Iger on CNBC this afternoon ...

[WDW1974]

Yes,i found that exchange to be rather interesting. I also found how the host - not Bob Iger - kept referring to them as "Activist Shareholders" in an attempt to discredit their opinions.

Activists have to be bad. They want to change the rules and give 'Da Man less power. They're trying to ruin 'Murica doncha know? (they'll take our guns and our women next!!!)

 

[PhotoDave219]

Yes. I thought that when he said that if Maria was a REAL journalist (and not a paid industry shill) she would have simply asked why it was a problem when Michael was in charge, but not now. Very fair and rational question.

TV news, especially cable news, is more about ratings, yelling and general unethical behavior. Her initial statement of "Activist Shareholders" immediately suggested she was "prepping the bull" (DONT google/urban dictionary that one) before said interview was consumated.

 

[flynnibus]

You are right Professor Knows It All ... I am using growth in the non-Wall Street, common sense way that most here would understand it.

In a thread.. talking about a CEO's appearance on a all-financial news program.. about the financial aspects of the company and the financial significance of a business segment. Who would think using business terms would be used in such a thread?

It's not my fault you failed the context test when you tried to jump on my original comment. So yes, I do get to pick the definition used for a term in my own original sentence.

 

[flynnibus]

Okay, so what are reasonable expectations for growth and a ROI for parks and resorts?

That is an entirely different question not related to the comment at hand. What a specific company should target for one of its business units has nothing to do with the accepted definitions of business and market lifecycles.

 

[Darth Sidious]

Okay, so what are reasonable expectations for growth and a ROI for parks and resorts?

Honestly Disney is so huge they should shoot for 2.5% to 3% growth on that segment. I would also love to see mid twenties profit margins for P&R. ROI wouldn't be for a specific segment but rather your whole investment in $DIS. Margins are better for analyzing a segment.

Disclaimer: I am not trying to pick fights or anything I'm just taking part in this discussion. I'm essentially nerding out since finance is my career.

 

[WDW1974]

In a thread.. talking about a CEO's appearance on a all-financial news program.. about the financial aspects of the company and the financial significance of a business segment. Who would think using business terms would be used in such a thread?

It's not my fault you failed the context test when you tried to jump on my original comment. So yes, I do get to pick the definition used for a term in my own original sentence.

Yes, Flynn. You are smarter than everyone else here. I don't get why you aren't running Cisco yet, but one day ... just like one day a simpleton like me will understand all that you do ...

 

[WDW1974]

Honestly Disney is so huge they should shoot for 2.5% to 3% growth on that segment. I would also love to see mid twenties profit margins for P&R. ROI wouldn't be for a specific segment but rather your whole investment in $DIS. Margins are better for analyzing a segment.

Disclaimer: I am not trying to pick fights or anything I'm just taking part in this discussion. I'm essentially nerding out since finance is my career.

That's fine. I don't ever get the idea that you are trying to play know it all here!

 

[PhotoDave219]

That is an entirely different question not related to the comment at hand. What a specific company should target for one of its business units has nothing to do with the accepted definitions of business and market lifecycles.

Okay, lets walk away from definitions for a minute.

What kind of ROI should Parks & Resorts be making? How much growth (revenue & attendance) should WDW have, yearly?

Clearly the business types have taken over and have no real desire to look at the Parks as anything other than a source of revenue.

So lets examine what type of economic performance should be happening here.

 

[disney fan 13]

Star Wars a great fit for Disney what? really. They cancelled The Clone Wars (with what I think is the best animation out there)delayed episodes II and III 3D releases put the RPG game 1313 on hold ended Star Wars Detours and as some have said no immediate plans for any new Star Wars themed attractions in Orlando. Well that fits,let me tell you they are not making many friends in the Star Wars fan community but we will get episode 7 O yippie

This sums up my feelings on the gaming sector of SW... http://www.ign.com/articles/2013/03/11/hey-lucasarts-get-your-act-together

(And don't get me started on Underworld or the EU...)

 

[flynnibus]

Okay, lets walk away from definitions for a minute.

What kind of ROI should Parks & Resorts be making? How much growth (revenue & attendance) should WDW have, yearly?

You can ask me.. but I'm not going to give you a number. I don't have an opinion on the matter that I think carries any value.

 

[ParentsOf4]

Parks and Resorts not a growth area? Really?

It isn't a mature business ... even in O-Town ... as UNI has shown. It's only mature when you present a lesser version of the same old product year after year after bloody year ...

Gotta agree with this one. WDW is not a growth business because the folks running it don't have a clue how to make it a growth business.

 

[PhotoDave219]

Honestly Disney is so huge they should shoot for 2.5% to 3% growth on that segment. I would also love to see mid twenties profit margins for P&R. ROI wouldn't be for a specific segment but rather your whole investment in $DIS. Margins are better for analyzing a segment.

Disclaimer: I am not trying to pick fights or anything I'm just taking part in this discussion. I'm essentially nerding out since finance is my career.

So lets look at 3% growth of attendance. 17.1 million (2011 numbers at MK) means 17.6 million.

A 3% growth in revenue for Domestic P&R Revenue (10.339 BILLION) would mean $10,650 BILLION in revenue. Disney reported an 11% growth for P&R revenue in FY 2012. Per the annual report "Revenue growth of 11% at our domestic operations reflected a 5% increase from higher average guest spending and a 5% increase from volume. Increased guest spending was primarily due to higher average ticket prices, food and beverage spending, and daily hotel room rates."

I dont see where 3% would be acceptable outside of the international business.

 

[PhotoDave219]

You can ask me.. but I'm not going to give you a number. I don't have an opinion on the matter that I think carries any value.

I did ask you. Domestic P&R had 11% growth last year. What should be realistic because I really dont see 11% growth as sustainable.

 

[flynnibus]

I did ask you. Domestic P&R had 11% growth last year. What should be realistic because I really dont see 11% growth as sustainable.

If it were a growth segment.. 11% would be on the bottom of the barrel and it better be sustainable and IMPROVING else the analysts would come down hard on them. But since it's not growth market segment, but a mature/established one... 10%+ is seen as attractive.

 

[ParentsOf4]

Okay, lets walk away from definitions for a minute.

What kind of ROI should Parks & Resorts be making? How much growth (revenue & attendance) should WDW have, yearly?

Clearly the business types have taken over and have no real desire to look at the Parks as anything other than a source of revenue.

So lets examine what type of economic performance should be happening here.

Interesting you should mention that. The following is from the 1984 Disney Annual Report:

Indeed, a major question in analysts' minds was why Disney had chosen to grow the theme-park segment as aggressively as it had. The initial cost estimate of Disney World/EPCOT Center had been $600 million; six years later, the cost had risen to $1.9 billion. One analyst commented, "The increment to the theme parks' operating earnings from Disney's ... investment probably did not exceed $80 million before taxes. After charging itself with taxes, Disney is left with about $45 million. That represents less than a 4 percent return on EPCOT. If Disney had invested in Treasury Bills it could have done better."

It's a good thing TWDC didn't listen to those analysts in the past and too bad for WDW that Iger is obsessed with those analysts today.

I hate to say it but many financial analysts don't have a clue how to run or grow a company.

 

[doctornick]

The Mickey shorts are a result of the fact that Mickey (wait, til you see the hate I get on this one) is slightly more relevant than Oswald these days. Most kids only know him as a foamhead at 'Disney' or a corporate symbol.

Virtually every pre-schooler I know watches Mickey Mouse Clubhouse and is very familiar with him as an animated "living" character, not just a corporate symbol.

Edit: And House of Mouse was on for a while before that.

 

[Darth Sidious]

So lets look at 3% growth of attendance. 17.1 million (2011 numbers at MK) means 17.6 million.

A 3% growth in revenue for Domestic P&R Revenue (10.339 BILLION) would mean $10,650 BILLION in revenue. Disney reported an 11% growth for P&R revenue in FY 2012. Per the annual report "Revenue growth of 11% at our domestic operations reflected a 5% increase from higher average guest spending and a 5% increase from volume. Increased guest spending was primarily due to higher average ticket prices, food and beverage spending, and daily hotel room rates."

I dont see where 3% would be acceptable outside of the international business.

For this year it is... When the economy picks up maybe 5%. Consider this... It is one segment and when combined with your other segments you added $1B more than last year. That's pretty huge... When you're talking tens of billions of dollars, expecting 20% growth is insane.

For attendance you are already the most visited theme park. I'm not sure what percentage increase you're thinking but 5% is good in that scenario.

The returns flatten as you get bigger.

 

[John]

Sharpening my pencils and reviewing my Rosetta Stone program on talking Flynnibus......I smell a new episode of the As the Magic World Turns.

 

[Captain Neo]

He is a Wall Street guy and he was speaking to a Wall Street audience. I swear he said the word FRANCHISE so much in the first five minutes that if I had been doing shots, I would have been passed out on the floor before Maria's lips even touched his butt cheeks.

Come on man, exaggerate much? The transcript is right next to the video and he said franchise a total of 7 times in 14 minutes and only twice in the first five minutes. Plus he is talking to a Wall Street audience like you said.

I've noticed you have had it out for Iger for years now and honestly I don't know why. He has invested in the parks alot more than Eisner did in his last few years and reinvigorated the company with new talent and new IPs. I agree that he should have taken the time to change the corporate culture and some of the underlying issues (the problems that started when Eisner was CEO) but he didn't however isn't that like saying a President is bad because he didn't fix all of the issues completely ignoring all the positive things? The only argument I can see you make is that he isn't a micromanager which has its advantages and disadvantages. The advantage is studios like Pixar and Marvel are free to do what they like and audiences are the better for it. The disadvantage is that bad sectors of the company like WDI and TDO continue to lower the bar and its allowed.

Under Iger's tenure he has made a serious efforts to reinvigorate Disney's in house animation studios and their live action division, smoothed out relationships (hell he even negotiated to get Oswald the rabbit back), Greenlit projects that were stuck in development hell for a long time (Star Tours 2, a sequel to Tron), acquired industry leaders like Pixar, Marvel, and Lucasfilm and brought their talents and assets into the fold, and increased profits for the company which at the end of the day is what matters.

 

[RSoxNo1]

Step 1 to proving the parks are not in a mature stage... build innovative new attractions. If you're worried about relevance, start out with known franchises like Star Wars and/or Pixar.

Step 2: Don't half it.