It's time for a shake-down

[PeterAlt]

Comcast is the perfect example of a bubble stock. By as soon as next year Comcast could be in serious financial trouble.

Disney stock is recommended as a buy universally by everyone. Disney's future is extremely bright no doubt due to the decisions made by Iger.

Jimmy Thick- Tellin' it like it is.

If I were Comcast, I'd sell of the cable systems and keep the studios, cable networks, broadcast networks, and theme parks. It would then be a equal and fair competitor.

 

[Groxtak]

Just to let everyone know, this is still in progress. The OP can't take credit for it. It's been ongoing way before the OP posted this - and he had nothing to do with it. The process started with the installment of Jack Dorsey to the BOD.

http://thewaltdisneycompany.com/about-disney/leadership/board-directors/jack-dorsey

 

[GoofGoof]

I hate to burst your bubble, but Jobs Trust and Lucas combined only hold about 10% of DIS stock. The top 3 institutional holders combined exceed them. Vanguard still exceeds Lucas. Any movement could be championed by one or both of these people, but they would need significant backing from traditional Wall Street investors to do anything. Wall Street loves DIS and it's huge returns right now. No shot they turn their backs on Iger and the gains he has brought them at least not any time soon.

As far as Jack Dorsey is concerned I know nothing about him personally. Has he ever been to a Disney theme park? Does he have some special passion for WDW or DLR that in some way is expected to help move projects there? Obviously he is a successful business man and can certainly help TWDC make better decisions about technology (especially web based technology) where they are in desperate need of help, but on the face I don't see him being a champion for the parks. However, if there is something about him that I don't know I would love to be educated and proven wrong.

 

[Groxtak]

I hate to burst your bubble, but Jobs Trust and Lucas combined only hold about 10% of DIS stock. The top 3 institutional holders combined exceed them. Vanguard still exceeds Lucas. Any movement could be championed by one or both of these people, but they would need significant backing from traditional Wall Street investors to do anything. Wall Street loves DIS and it's huge returns right now. No shot they turn their backs on Iger and the gains he has brought them at least not any time soon.

As far as Jack Dorsey is concerned I know nothing about him personally. Has he ever been to a Disney theme park? Does he have some special passion for WDW or DLR that in some way is expected to help move projects there? Obviously he is a successful business man and can certainly help TWDC make better decisions about technology (especially web based technology) where they are in desperate need of help, but on the face I don't see him being a champion for the parks. However, if there is something about him that I don't know I would love to be educated and proven wrong.

I just want to answer the first part of this. I'll come back and answer the rest later. The other big stockholders you mentioned are investment funds and are do not make a career in this line of business. So, their opinions could be swayed either way, but it would take a vote of the individual stock holders for each of those funds. It would also have to be initiated by enough members to petition for such a vote. Most of these people are employed outside the industry, and do not really care or know enough to take such an initiative. In the the case of outing Michael Eisner, Roy Disney had to lobby some of these groups in order for them to initiate action and vote against Eisner. I'm sure that was easier said than done. Any such moves today would probably seek similiar tactics; however, it's not really necessary because most don't make the initiative to get their group to vote any way. Without polling the group, the group's vote automatically abstains. Now, if the group does in fact vote, it would most likely follow influencial stock holders on how they vote. In this case, the influence stockholders are Lucas and Jobs.

How much stock did Roy Disney own when he campaigned to remove Ron Miller?

 

[GoofGoof]

I just want to answer the first part of this. I'll come back and answer the rest later. The other big stockholders you mentioned are investment funds and are do not make a career in this line of business. So, their opinions could be swayed either way, but it would take a vote of the individual stock holders for each of those funds. It would also have to be initiated by enough members to petition for such a vote. Most of these people are employed outside the industry, and do not really care or know enough to take such an initiative. In the the case of outing Michael Eisner, Roy Disney had to lobby some of these groups in order for them to initiate action and vote against Eisner. I'm sure that was easier said than done. Any such moves today would probably seek similiar tactics; however, it's not really necessary because most don't make the initiative to get their group to vote any way. Without polling the group, the group's vote automatically abstains. Now, if the group does in fact vote, it would most likely follow influencial stock holders on how they vote. In this case, the influence stockholders are Lucas and Jobs.

How much stock did Roy Disney own when he campaigned to remove Ron Miller?

The bigger question is how was Disney stock doing when they removed Ron Miller? The answer, not great and certainly nowhere near the run it's been on lately. Wall Street guys aren't going to back a movement of any kind to remove the "golden boy" who has brought them great returns. If times get tough at Disney and Iger slips up on something major then you can bet they would pounce on him and cast him aside like a piece of stale bread. His recent moves have been nothing short of massively successful at least from a stock holders perspective.

Don't kid yourself and think that Vanguard would own $5B worth of Disney stock and not have anyone who makes a living knowing every detail of how the business runs. They have some major skin in the game and as much as people like to hate on Wall Street types the ones managing these major funds are usually very bright guys. The analysts who work for these big investment houses know the businesses and the industries they follow too. The better question is how much does Lucas know about running ABC or ESPN or theme parks for that matter. Maybe he knows the movie business, but that's only one aspect of TWDC. The Jobs trust is even less likely to have a valid opinion one way or another. I guess my point is Roy Disney ,who was intimately involved in the business of TWDC, was much more likely to have the ear of the Wall Street guys then Lucas or whoever represents Jobs. When the guy whose family the company was named after and several of his very powerful friends approach other institutional investors and say the CEO needs to go it is more likely to result in action.

 

[GoofGoof]

How much stock did Roy Disney own when he campaigned to remove Ron Miller?

Took me a bit to look the numbers up. Pulled most of this from Disney War. Miller and the Walt side of the family owned about 11% of the company at the time Miller was removed as CEO but it didn't help him. Roy owned about 5% of Disney shares but he had Stanley Gold on his side too when he called for the removal of Ron Miller. Gold was an influential board member. There were a few near hostile takeover attempts including one from corporate raider Saul Steinberg who owned 6% of shares and announced he planned to buy more so he could break up the company and sell it off in pieces. Gold convinced the board the best course of action was a change in management. Again, not really a similar situation to today.

 

[PeterAlt]

Took me a bit to look the numbers up. Pulled most of this from Disney War. Miller and the Walt side of the family owned about 11% of the company at the time Miller was removed as CEO but it didn't help him. Roy owned about 5% of Disney shares but he had Stanley Gold on his side too when he called for the removal of Ron Miller. Gold was an influential board member. There were a few near hostile takeover attempts including one from corporate raider Saul Steinberg who owned 6% of shares and announced he planned to buy more so he could break up the company and sell it off in pieces. Gold convinced the board the best course of action was a change in management. Again, not really a similar situation to today.

Hey, sorry, our discussion was interrupted by me getting my ID back. I actually wrote a long response under Groxtak but just as I was wrapping it up, I accidentally pressed something and it was gone. Instead of re-writing it, I think there were two important points I wanted to make and I think they were....

1. If the reported $800 million budget is correct, current Disney management is doing what the creatives want him to do - and this movement is already working without having to remove Iger. The big test will be if park investments are made for EC and HS as well. He could get away with stalling those, but the longer he pushes those off, the less better off he becomes. The additional budget for Avatar is what the creatives want because that money is spent on creating a better show - a better attraction, which is what Disney needs to compete. This is the bread and butter of WDW. This is why people vacation to WDW. To be entertained in a why which Disney does best. $800 million guarantees that Disney will live up to or exceed the Disney entertainment standard, benefiting in return customers and word of mouth new customers.

2. If Iger continues to give the creatives what they want and gets a handle on NextGen and manages it properly, the creatives will turn their focus to Iger's 2016 successor. If NextGen blows up and capex at the parks freezes, or any other unforeseen major problems happen, the movement will push forward. As long as there's movement, there's checks and balances.

 

[GoofGoof]

Hey, sorry, our discussion was interrupted by me getting my ID back. I actually wrote a long response under Groxtak but just as I was wrapping it up, I accidentally pressed something and it was gone. Instead of re-writing it, I think there were two important points I wanted to make and I think they were....

1. If the reported $800 million budget is correct, current Disney management is doing what the creatives want him to do - and this movement is already working without having to remove Iger. The big test will be if park investments are made for EC and HS as well. He could get away with stalling those, but the longer he pushes those off, the less better off he becomes. The additional budget for Avatar is what the creatives want because that money is spent on creating a better show - a better attraction, which is what Disney needs to compete. This is the bread and butter of WDW. This is why people vacation to WDW. To be entertained in a why which Disney does best. $800 million guarantees that Disney will live up to or exceed the Disney entertainment standard, benefiting in return customers and word of mouth new customers.

2. If Iger continues to give the creatives what they want and gets a handle on NextGen and manages it properly, the creatives will turn their focus to Iger's 2016 successor. If NextGen blows up and capex at the parks freezes, or any other unforeseen major problems happen, the movement will push forward. As long as there's movement, there's checks and balances.

Glad you got your name back. Who are the creatives that you are talking about?

As much time as we have spent talking about NextGen around here I don't think its as big of a deal to the Wall Street crowd as ESPN or the Studio. They see P&R mostly as a cash machine and they understand it takes large capital investments to keep it fresh and running on all cylinders. My personal opinion is that the NextGen budget has been highly exaggerated on these boards. The original figure was less than a billion and I think the last time Iger mentioned costs publicly it was at or a little over $1B. People around here are implying it's something like $3B+. If the costs ballooned that much Iger and company would have had no choice but to disclose it. The project is wrapping up a few months late, but not enough to have caused the budget to blow out that much. IMHO even if NextGen turns out to be a huge flop and doesn't generate any additional revenues per guest and WDW numbers stagnate some I still think Iger largely gets a pass from the Street. Based on crowd levels in Q1 at WDW I doubt he even has to worry about a dip in the numbers.

Now if there is some sort of disaster with Star Wars and it turns out like Lone Ranger then he might be on the hot seat. Investing $4B in Lucas films and a boat load more in each additional movie was a gamble. If Star Wars 7 is somehow a flop that investment will look really bad and the stock will take a hit. Of course the likelihood of the movie flopping is astronomically small. Betting on Star Wars for Iger was like betting on the Lakers to win the NBA title back when they had Shaq and Kobe in their prime. It's pretty much a sure thing.

On Avatar the $800M seems like a pretty bold move. My personal opinion is that they sold it to the board as spending the money to make AK a full day park. The board signed off on a $1.2B overhaul at DHS because there was easy to identify ROI. If they built up DCA it would mean people coming to DL and staying additional days and/or coming to see DCA itself. Remember that DLR in a lot of ways resembles Universal Florida in that it is mostly a locals park and a lot of day trips. WDW is another animal. With multi-day passes and guests staying longer already it's a lot harder to quantify the ROI on new projects by simply saying "if you build it they will come". FLE was sold as mostly an increasing of capacity at MK. They could point directly to lost revenues from days the park hit maximum capacity and had to begin phased closings. Increasing capacity would mean easily identified additional revenue. With AK they probably have stats that show people only spend a half day there and then either hop to MK or another park. It leads to overcrowding at MK and lost revenue when people can do DHS and AK on one day freeing them up to go off property the next day. By making AK an all day park they can keep guest there and spending for 2 days. The amount of money made now on dinner at the park has to be minimal. Having a night show and extended hours will open up additional revenue streams for food and drinks. I think that helped ease the process of getting it approved. The $800M is surprisingly large and I am cautiously optimistic that we will be getting a really high quality upgrade and some good additions besides Avatar.

DHS...who knows. All signs point or StarWarsLand but the question is when. It may not be popular around these parts, but I could see them waiting to see what impact AK 2.0 has on revenues and profits before committing another close to $1B on DHS. They really could use a DCA style makeover with StarWars playing the part of Carsland but they need other additions too. Once Avatar is done DHS will be a distant 4th in attendance. That will be rock bottom. It may take until then to get a green light for the park.

EPCOT I have the least amount of hope for. They make money on the countries and the alcohol so I don't see there being a rush to do much there. After the other 2 parks are taken care of I could see maybe a few new attractions open, but that may be 2020 or later. The park may get a few little things sooner than that like a new film for Soarin with an additional theater or a refurb of imagination but nothing epic like Avatar or StarWars.

 

[PeterAlt]

Glad you got your name back. Who are the creatives that you are talking about?

As much time as we have spent talking about NextGen around here I don't think its as big of a deal to the Wall Street crowd as ESPN or the Studio. They see P&R mostly as a cash machine and they understand it takes large capital investments to keep it fresh and running on all cylinders. My personal opinion is that the NextGen budget has been highly exaggerated on these boards. The original figure was less than a billion and I think the last time Iger mentioned costs publicly it was at or a little over $1B. People around here are implying it's something like $3B+. If the costs ballooned that much Iger and company would have had no choice but to disclose it. The project is wrapping up a few months late, but not enough to have caused the budget to blow out that much. IMHO even if NextGen turns out to be a huge flop and doesn't generate any additional revenues per guest and WDW numbers stagnate some I still think Iger largely gets a pass from the Street. Based on crowd levels in Q1 at WDW I doubt he even has to worry about a dip in the numbers.

Now if there is some sort of disaster with Star Wars and it turns out like Lone Ranger then he might be on the hot seat. Investing $4B in Lucas films and a boat load more in each additional movie was a gamble. If Star Wars 7 is somehow a flop that investment will look really bad and the stock will take a hit. Of course the likelihood of the movie flopping is astronomically small. Betting on Star Wars for Iger was like betting on the Lakers to win the NBA title back when they had Shaq and Kobe in their prime. It's pretty much a sure thing.

On Avatar the $800M seems like a pretty bold move. My personal opinion is that they sold it to the board as spending the money to make AK a full day park. The board signed off on a $1.2B overhaul at DHS because there was easy to identify ROI. If they built up DCA it would mean people coming to DL and staying additional days and/or coming to see DCA itself. Remember that DLR in a lot of ways resembles Universal Florida in that it is mostly a locals park and a lot of day trips. WDW is another animal. With multi-day passes and guests staying longer already it's a lot harder to quantify the ROI on new projects by simply saying "if you build it they will come". FLE was sold as mostly an increasing of capacity at MK. They could point directly to lost revenues from days the park hit maximum capacity and had to begin phased closings. Increasing capacity would mean easily identified additional revenue. With AK they probably have stats that show people only spend a half day there and then either hop to MK or another park. It leads to overcrowding at MK and lost revenue when people can do DHS and AK on one day freeing them up to go off property the next day. By making AK an all day park they can keep guest there and spending for 2 days. The amount of money made now on dinner at the park has to be minimal. Having a night show and extended hours will open up additional revenue streams for food and drinks. I think that helped ease the process of getting it approved. The $800M is surprisingly large and I am cautiously optimistic that we will be getting a really high quality upgrade and some good additions besides Avatar.

DHS...who knows. All signs point or StarWarsLand but the question is when. It may not be popular around these parts, but I could see them waiting to see what impact AK 2.0 has on revenues and profits before committing another close to $1B on DHS. They really could use a DCA style makeover with StarWars playing the part of Carsland but they need other additions too. Once Avatar is done DHS will be a distant 4th in attendance. That will be rock bottom. It may take until then to get a green light for the park.

EPCOT I have the least amount of hope for. They make money on the countries and the alcohol so I don't see there being a rush to do much there. After the other 2 parks are taken care of I could see maybe a few new attractions open, but that may be 2020 or later. The park may get a few little things sooner than that like a new film for Soarin with an additional theater or a refurb of imagination but nothing epic like Avatar or StarWars.

We have no argument when it comes to AK. I just hope they budget in additional funds for an EE overhaul when this is complete. The overhaul, besides fixing Yeti and the other effects, should also build the enclosure that people here have suggested, as well as adding additional theming and show and effect elements to the actual ride. Then, the park will have more "balance" in quality between attractions, and crowds will be more likely to spread out.

What HS needs is for the Great Movie Ride to be updated, a parking garage on its corner with World Drive and LBV Blvd that also doubles as a future monorail station, a new park entrance near the new parking garage and TTZToT, and a 3/4 mile extension of the monorail to the new garage so that the EC parking lot can be used for overflow when the garage reaches capacity. Once you do that, you have the entire HS parking lot for expansion that can be done in phases. The expansion can include a Star Wars Land, an Indiana Jones Land (with a clone of the DL ride while also keeping the existing stunt show), a Cars Land, and anything else they dream of in the future.

In the MK, they need to add another E-ticket to the New Fantasyland. Tony Baxter worked on an Oz attraction for DL before he retired. This sounds like a good candidate. They need to build that Fire Mountain inverted roller coaster for Adventureland that Eisner wanted. They need to give Space Mountain and BTMRR the DL treatment.

For EC, UoE needs an update. Soaring needs all the updates planned for DCA. Don't forget about that "mystery attraction" still planned for 2015. Long term plans should be developed for the Imagination and WoL pavilions. The vacant lots zoned for future resorts at EC should be developed in conjunction with the 3/4 mile extension of the monorail to HS that I proposed.

You asked who the creatives are? The company has always been divided ever since the days of Walt and Roy. There has always been a power struggle between the two camps. Instead of naming names, I'll just say that this struggle is ongoing and continues to this day. I'll leave it at that.

One more thing, I don't know if the increase in Avatar's budget is coming from what was planned for HS or not. We also don't know how true the Miceage report is that Star Wars Land at HS is cancelled or not. It's one of those things that I guess we will have to just wait and see.

As for NextGen, if it's true that the project is the cause of delay of cancellation of new attraction projects, and continues to be a black hole sucking funds, this would be cause for alarm and justification for change among the creatives. My opinion is that it's becoming less of a problem and it's being managed. Once there's closure on it, things should be better.

 

[GoofGoof]

We have no argument when it comes to AK. I just hope they budget in additional funds for an EE overhaul when this is complete. The overhaul, besides fixing Yeti and the other effects, should also build the enclosure that people here have suggested, as well as adding additional theming and show and effect elements to the actual ride. Then, the park will have more "balance" in quality between attractions, and crowds will be more likely to spread out.

What HS needs is for the Great Movie Ride to be updated, a parking garage on its corner with World Drive and LBV Blvd that also doubles as a future monorail station, a new park entrance near the new parking garage and TTZToT, and a 3/4 mile extension of the monorail to the new garage so that the EC parking lot can be used for overflow when the garage reaches capacity. Once you do that, you have the entire HS parking lot for expansion that can be done in phases. The expansion can include a Star Wars Land, an Indiana Jones Land (with a clone of the DL ride while also keeping the existing stunt show), a Cars Land, and anything else they dream of in the future.

In the MK, they need to add another E-ticket to the New Fantasyland. Tony Baxter worked on an Oz attraction for DL before he retired. This sounds like a good candidate. They need to build that Fire Mountain inverted roller coaster for Adventureland that Eisner wanted. They need to give Space Mountain and BTMRR the DL treatment.

For EC, UoE needs an update. Soaring needs all the updates planned for DCA. Don't forget about that "mystery attraction" still planned for 2015. Long term plans should be developed for the Imagination and WoL pavilions. The vacant lots zoned for future resorts at EC should be developed in conjunction with the 3/4 mile extension of the monorail to HS that I proposed.

You asked who the creatives are? The company has always been divided ever since the days of Walt and Roy. There has always been a power struggle between the two camps. Instead of naming names, I'll just say that this struggle is ongoing and continues to this day. I'll leave it at that.

One more thing, I don't know if the increase in Avatar's budget is coming from what was planned for HS or not. We also don't know how true the Miceage report is that Star Wars Land at HS is cancelled or not. It's one of those things that I guess we will have to just wait and see.

As for NextGen, if it's true that the project is the cause of delay of cancellation of new attraction projects, and continues to be a black hole sucking funds, this would be cause for alarm and justification for change among the creatives. My opinion is that it's becoming less of a problem and it's being managed. Once there's closure on it, things should be better.

Didn't an insider here say the Miceage stories about Nextgen were largely untrue or possibly just jumping to conclusions that aren't accurate. That the real reason that WDI people were being diverted to China is that the new park was falling behind and that they had promised the Chinese government a firm opening time. To me the story seemed overly dramatic and possibly an attempt to grab some attention, but I'm no insider so what do I know. I think that one thing we need to keep in mind is that P&R has a lot of "balls in the air" still. They have a park to finish in China, loads of issues in Paris and DLR out west that all share the larger P&R pie.

 

[PeterAlt]

Didn't an insider here say the Miceage stories about Nextgen were largely untrue or possibly just jumping to conclusions that aren't accurate. That the real reason that WDI people were being diverted to China is that the new park was falling behind and that they had promised the Chinese government a firm opening time. To me the story seemed overly dramatic and possibly an attempt to grab some attention, but I'm no insider so what do I know. I think that one thing we need to keep in mind is that P&R has a lot of "balls in the air" still. They have a park to finish in China, loads of issues in Paris and DLR out west that all share the larger P&R pie.

Agreed.

 

[Voxel]

Didn't an insider here say the Miceage stories about Nextgen were largely untrue or possibly just jumping to conclusions that aren't accurate. That the real reason that WDI people were being diverted to China is that the new park was falling behind and that they had promised the Chinese government a firm opening time. To me the story seemed overly dramatic and possibly an attempt to grab some attention, but I'm no insider so what do I know. I think that one thing we need to keep in mind is that P&R has a lot of "balls in the air" still. They have a park to finish in China, loads of issues in Paris and DLR out west that all share the larger P&R pie.

This is very true, not based on insider information but based on the Disney Careers page. Over the last few months I have been noticing a drastic increase in System engineers for Ride that Disney is looking for. Either they are having a problem keeping employees or they or trying to increase the amount of people working on projects/preppy to move into over drive.

 

[GoofGoof]

This is very true, not based on insider information but based on the Disney Careers page. Over the last few months I have been noticing a drastic increase in System engineers for Ride that Disney is looking for. Either they are having a problem keeping employees or they or trying to increase the amount of people working on projects/preppy to move into over drive.

That's good to hear. The MiceAge story made it seem like they were going to be laying off a bunch of people since all projects for DLR were on hold and all projects for WDW were cancelled. Sounds like the exact opposite is true.

 

[Voxel]

That's good to hear. The MiceAge story made it seem like they were going to be laying off a bunch of people since all projects for DLR were on hold and all projects for WDW were cancelled. Sounds like the exact opposite is true.

If you see people layed off I am gonna assume the less technical employees but I just don't see it especially with a major park under construction.

 

[PeterAlt]

This is very true, not based on insider information but based on the Disney Careers page. Over the last few months I have been noticing a drastic increase in System engineers for Ride that Disney is looking for. Either they are having a problem keeping employees or they or trying to increase the amount of people working on projects/preppy to move into over drive.

That's the best good news I've heard all week! Hope you're right....

 

[PeterAlt]

That's good to hear. The MiceAge story made it seem like they were going to be laying off a bunch of people since all projects for DLR were on hold and all projects for WDW were cancelled. Sounds like the exact opposite is true.

Notice not one word has been mentioned by Miceage in months about Avatar. Not one word about construction starting, released concept art... Not one word about the $800 million budget.

What alternate reality are they living in? Nevermind. It's California... (No offense to our West Coasters... I love Cali!)

 

[Voxel]

That's the best good news I've heard all week! Hope you're right....

Currently Disney has job offering for and R&D person and two control system engineers. I have seen around 10 control system engineers with different post dates pop up in the last 6 months.

Another curiosity is that about 5 QA engineers jobs and 4 Software Engineer jobs popped up this month which looks to be a drive for something software related for Disney. Considering they are asking for web experience I am assuming we are gonna get an overhaul of the website/mm+ layouts to make the quicker and more efficient.

 

[ford91exploder]

Currently Disney has job offering for and R&D person and two control system engineers. I have seen around 10 control system engineers with different post dates pop up in the last 6 months.

Another curiosity is that about 5 QA engineers jobs and 4 Software Engineer jobs popped up this month which looks to be a drive for something software related for Disney. Considering they are asking for web experience I am assuming we are gonna get an overhaul of the website/mm+ layouts to make the quicker and more efficient.

Or the entire QA staff quit because no one listened to them...

 

[ford91exploder]

This is very true, not based on insider information but based on the Disney Careers page. Over the last few months I have been noticing a drastic increase in System engineers for Ride that Disney is looking for. Either they are having a problem keeping employees or they or trying to increase the amount of people working on projects/preppy to move into over drive.

All for China, Pretty much all US projects are on indefinite hold.

 

[Voxel]

All for China, Pretty much all US projects are on indefinite hold.

Yes which is what I stated with the first statement. Disney has set a deadline with China and China expects Disney to make it.

Or the entire QA staff quit because no one listened to them...

Very true. I do think that this hiring spree is related to MM+ and the websites, especially since the locations are spread out between Washington, Orlando, and California.