Is disney parks and resorts for sale?

[flavious27]

I really do not feel like digging for those contracts. They're all separate companies with different ownership structures in which The Walt Disney Company only ones a minority. I know the Universal one was in the original partnership agreement between Universal and Blackstone Group for Universal City Development Partners.

for disney, are there docs for disney that show them getting paid for licensing of the international parks?

As for universal, this is the license policy for universal orlando:

License to use "Universal". UniCo hereby (if applicable)
licenses and shall cause to be licensed to the Partnership the right to use
"Universal" as the name of the Master Site on a non-exclusive basis and at no
cost to the Partnership; this license shall not limit or impair Universal
Parent's, UniCo Parent's (or their respective affiliates') rights in said word;
Universal Parent, UniCo Parent and their respective affiliates shall be free to
use (and license others to use) "Universal."

 

[AEfx]

No offense, but despite being "senior imagineers" they are pretty low on the corporate totem pole. They'll probably be the last to know.

Yeah but they like to talk, and if we are sitting here talking about it - as "inside" as some of the info we get is...I'm going with what Eddie said on this one until we have some proof besides "a bunch of board members met at WDW".

 

[SeanC]

Yeah but they like to talk, and if we are sitting here talking about it - as "inside" as some of the info we get is...I'm going with what Eddie said on this one until we have some proof besides "a bunch of board members met at WDW".

Don't be silly EVERYONE knows when a bunch of board members meet at WDW it is:

1. To sell the parks

or

2. To fix the Yeti, the tarp in Big Thunder, and the animatronics in Splash

or

3. To make sure the Four Seasons hotel gets built in 2014

It CANNOT however, be a run of the mill Board of Directors retreat at the vacation kingdom of the world, that they happen to run.

 

[flynnibus]

for disney, are there docs for disney that show them getting paid for licensing of the international parks?

In every annual report when they outline why they get money from Oriential Land Company... the relationship is outlined in the report every year.

 

[flynnibus]

I do have to wonder outloud...what exactly did TWDC give up to get a 2 BILLION yuan loan from ChiComs??? No one is going to sit there and tell me with a straight face that they did it all for just a reasonable rate of return....

uhh.. that's what banks do. Loan money to people they know will pay them back. Plus it's China.. it was probably part of the deal to help grease the skids so it would be easier for Disney to build the park. Cheap financing is always a bone to throw to make a deal happen.

 

[flavious27]

In every annual report when they outline why they get money from Oriential Land Company... the relationship is outlined in the report every year.

yeaaa, because they have a licensing agreement because they don't own the tdl resort. My comments have been that it would be redundant for disney to have a paying licensing agreement for parks that they have a large ownership interest in. Also that if for some reason disney co sold wdw, prices would go up even more for average guests or it would not be a profitable venture for an outside party to buy the parks. Disney Co selling wdw would be as dumb financially as pa privatizing its liquor stores.

 

[PirateFrank]

uhh.. that's what banks do. Loan money to people they know will pay them back. Plus it's China.. it was probably part of the deal to help grease the skids so it would be easier for Disney to build the park. Cheap financing is always a bone to throw to make a deal happen.

Not only did You miss my point entirely, your condescension only exacerbates that...

We're talking about 2 BILLION yuan....that's a massive chunk of money....and some significant collateral had to be fronted, of course, assuming were still operating on the idea of 'what banks do'....interest is assumed here....what other consideration was given is the big question I want answered..

 

[Mr Bill]

2 billion yuan is about 300 million US dollars. Is that really a huge amount for a company that was already carrying 12.7 billion of debt?

 

[flavious27]

Not only did You miss my point entirely, your condescension only exacerbates that...

We're talking about 2 BILLION yuan....that's a massive chunk of money....and some significant collateral had to be fronted, of course, assuming were still operating on the idea of 'what banks do'....interest is assumed here....what other consideration was given is the big question I want answered..

2 BILLION yuan or 309 million usd, for a company that has 39 BILLION usd sitting in the bank. To Disney it isn't that much to develop a park it is building.

 

[lazyboy97o]

yeaaa, because they have a licensing agreement because they don't own the tdl resort. My comments have been that it would be redundant for disney to have a paying licensing agreement for parks that they have a large ownership interest in. Also that if for some reason disney co sold wdw, prices would go up even more for average guests or it would not be a profitable venture for an outside party to buy the parks. Disney Co selling wdw would be as dumb financially as pa privatizing its liquor stores.

Business units of a company paying each other is a standard practice. Disney only owns a minority of Disneyland Paris (39%), Hong Kong Disneyland Resort (43%), and Shanghai Disney Resort (43%).

Actual amounts mean nothing. You are trying to claim that a highly variable factor, licensing fees, cannot be properly sorted out to work. That cannot be done because the fees could be none like was between NBCUniversal and Universal City Development Partners, relatively small is between the OLC Group and The Walt Disney Company, mutually equitable or a burden as wad the recent case with Six Flags. There are a plethora of licensing deals in the themed entertainment and amusements business that do not bankrupt the park owners.

The current management of The Walt Disney Company seeking too much for its intellectual property is an entirely different matter that does not rule out the possibility of a feasible deal being brokered.

 

[flynnibus]

yeaaa, because they have a licensing agreement because they don't own the tdl resort. My comments have been that it would be redundant for disney to have a paying licensing agreement for parks that they have a large ownership interest in.

Accounting is a very magically thing. The rules of how things get paid for, taxed, depreciated, all are very big things.

Having companies sell their property, just to lease it back is a very common practice for much of the same reasons.

same as why companies often lay people off to hire them back as contractors.

Business finance isn't like balancing your checkbook.

 

[flynnibus]

Not only did You miss my point entirely, your condescension only exacerbates that...

Well maybe you should spell it out.. because its lost on everyone else but you.

You ask why would a bank loan a big chunk of money? Because banks make money by charging interest.. and the more you loan.. the more you collect.. and the best types of customers are those that are capable of PAYING with little to no risk of default. That's why a bank would load TWDC a lot of money. What is this big cloak and dagger thing you think MUST be there for a tiny business loan at a time when the company is looking to start a large capital project?

It's akin to thinking your bank is acting like the Godfather because they gave you a car loan... sheez

Plus, the bank IS the China Government.. whose purpose is to.. wait for it.. help fund development. And where is it being built.. China.. and who is the other majority partner in the park.. China. This is China helping finance the deal for Disney at what are probably very attractive terms to help fund the capital project.

We're talking about 2 BILLION yuan....that's a massive chunk of money....and some significant collateral had to be fronted, of course, assuming were still operating on the idea of 'what banks do'....interest is assumed here....what other consideration was given is the big question I want answered..

It's not a big chunk of money.. as others have stated, only about 300million dollars... to a company that books over 9 BILLION Dollars (not yuan) PER QUARTER.. has over 3 BILLION in cash.. and has almost 13 billion in debt already. 300 million dollars is operating cash to a company this size. The company is the collateral - they aren't mortgaging their house. China is already the other major owner in the park.

This is china.. china owns the bank. What did China get in the deal? Uh.. helping ensure the Shanghai Park is built. the development partner in the park is a state owned conglomerate.

This is just like any city or county giving tax breaks or low-cost loans to business to help attract and ensure the business is opened in their locale.

 

[flavious27]

Business units of a company paying each other is a standard practice. Disney only owns a minority of Disneyland Paris (39%), Hong Kong Disneyland Resort (43%), and Shanghai Disney Resort (43%).

Actual amounts mean nothing. You are trying to claim that a highly variable factor, licensing fees, cannot be properly sorted out to work. That cannot be done because the fees could be none like was between NBCUniversal and Universal City Development Partners, relatively small is between the OLC Group and The Walt Disney Company, mutually equitable or a burden as wad the recent case with Six Flags. There are a plethora of licensing deals in the themed entertainment and amusements business that do not bankrupt the park owners.

The current management of The Walt Disney Company seeking too much for its intellectual property is an entirely different matter that does not rule out the possibility of a feasible deal being brokered.

It is not uncommon for business units to transfer money from one unit to another, it is how microsoft and other tech companies pay less in taxes for their IP. Microsoft doesn't own 40% of windows and gets a cut of the profits while also charging 15 or 20% for the IP.

Disney is going to charge a licensing fee that is going to give them the same income or about the same income that they would be getting now. With the fox business article I linked earlier, disney got about 16% in income in the first quarter. If Disney Co sold WDW prices are going to go up 16% just to cover disney's share, the buyer is either going to cut costs or increase ticket prices to cover the cost of the acquisition.

 

[tizzo]

Not only did You miss my point entirely, your condescension only exacerbates that...

We're talking about 2 BILLION yuan....that's a massive chunk of money....and some significant collateral had to be fronted, of course, assuming were still operating on the idea of 'what banks do'....interest is assumed here....what other consideration was given is the big question I want answered..

I have to agree with flynnibus. "Massive" when dealing with sums of money is relative, and for Disney, even 2B dollars isn't that massive, let alone 2B Yuan.

The article you cited clearly stated that the reason for the loan was to finance the park being built in Shanghai. I don't see the slightest thing unusual about the loan, including the size. I would frankly be very surprised to learn that they didn't borrow a corresponding amount of money from one or more US banks to finance the FLE.

I also cannot fathom why you feel like there must be some reason other than a "reasonable rate of return" for making such a loan. I know that there's a lot of distrust of banks in general right now, given the perceived role of the industry in the financial collapse. But it's hard to imagine someone sufficiently informed to even think to cite Bloomberg who didn't know that this is mostly politicians playing on the ignorance of the masses to try to conceal their own culpability. Loans are made every day to companies and individuals, many of them for much larger sums than $300M, and 99.99% of them involve no motivation beyond a "reasonable rate of return" and a reasonable likelihood of getting paid.

 

[lazyboy97o]

Disney is going to charge a licensing fee that is going to give them the same income or about the same income that they would be getting now. With the fox business article I linked earlier, disney got about 16% in income in the first quarter. If Disney Co sold WDW prices are going to go up 16% just to cover disney's share, the buyer is either going to cut costs or increase ticket prices to cover the cost of the acquisition.

Part of the whole point of a sale would be getting less in exchange for even less risk and liability. They do not get everything from the international resorts and are happy with that because it involves having to put less into them.

 

[flavious27]

I have to agree with flynnibus. "Massive" when dealing with sums of money is relative, and for Disney, even 2B dollars isn't that massive, let alone 2B Yuan.

The article you cited clearly stated that the reason for the loan was to finance the park being built in Shanghai. I don't see the slightest thing unusual about the loan, including the size. I would frankly be very surprised to learn that they didn't borrow a corresponding amount of money from one or more US banks to finance the FLE.

I also cannot fathom why you feel like there must be some reason other than a "reasonable rate of return" for making such a loan. I know that there's a lot of distrust of banks in general right now, given the perceived role of the industry in the financial collapse. But it's hard to imagine someone sufficiently informed to even think to cite Bloomberg who didn't know that this is mostly politicians playing on the ignorance of the masses to try to conceal their own culpability. Loans are made every day to companies and individuals, many of them for much larger sums than $300M, and 99.99% of them involve no motivation beyond a "reasonable rate of return" and a reasonable likelihood of getting paid.

Well look at it this way, cars 2 probably cost 2 billion yuan to produce, print and advertise.

Part of the whole point of a sale would be getting less in exchange for even less risk and liability. They do not get everything from the international resorts and are happy with that because it involves having to put less into them.

Well if disney co is concerned about risk and liability, they would just sell their shares in china. at this point, the risk is fairly low for disney co to still own wdw and or dlr. And DLP has gotten better since it opened, and it should bring in more guests with their announced expansion.

If the parks were losing money, I could see disney co selling or consider bringing in a partner. At this time, they are far from it. The parks made decent cash, that disney co uses to cover purchases and divisions that are hurting.

 

[bstiles]

A certain spirit offered up more conformation about disneys parks and resorts. He said that the BoD indeed was down at WDW during that week of july 4th and approved the sale of P&R in principle. Now that this has been established doesn't mean they will be sold it just means that they can actively be shopped.

 

[Kamikaze]

A certain spirit offered up more conformation about disneys parks and resorts. He said that the BoD indeed was down at WDW during that week of july 4th and approved the sale of P&R in principle. Now that this has been established doesn't mean they will be sold it just means that they can actively be shopped.

Thats generally not how it works.

However, if this is true, you'll start hearing about it in other places. If they were to actively 'shop' it, the news would leak, and it would get reported.

The biggest mark against this is that no source other than fan sites has reported anything about this. If a multi-billion dollar deal like this was going to go down, it would get leaked at some point. For instance - if Lee and spirit of 74 can get sources to talk about it, then someone like the Wall Street Journal should be able to as well. Why would their sources be giving them misinformation? I don't know, but that happens.

Besides that, the TWDC's largest shareholder is insanely filthy rich with giant piles of cash reserve in his company. If this had to do with money, I would think they would go to him first.

 

[Sir_Cliff]

It's not completely outside the bounds of possibility that Disney would look at selling off parks and resorts, but it seems unlikely to me and even more unlikely that just one Internet source apparently with some attachment to WDI knows about it and apparently no-one else does.

More than anything, it seems to me Disney's brand is too tied up with the parks to ever seriously consider selling them off. They've also put a lot of effort in recent years into building up the parks brand, cultivating the fan market and expanding its various businesses such as the cruise line, DVC and parks (with the mega-DCA redo), and a lot of those expensive projects are still the the process of being completed which meant anyone who bought the division would also be buying into some pretty pricey construction projects. It certainly doesn't look like Disney has been preparing the division as an attractive package that they could sell and virtually walk away from.

BTW, have the board ever met at a Disney resort before? Doesn't seem that odd to me. They have to meet somewhere from time to time, don't they?

 

[Kamikaze]

BTW, have the board ever met at a Disney resort before? Doesn't seem that odd to me. They have to meet somewhere from time to time, don't they?

I'm sure they've met at WDW and DLR many times. Especially in a day and age when people would complain if they were spending tons of the Company's money staying somewhere else when they can stay at a Company resort for basically nothing.