OS: Disney quarterly profit jumps 21% thanks to parks, TV advertising

[prberk]

www.orlandosentinel.com/the-daily-disney/os-disney-second-quarter-earnings-20120507,0,6268511.story

Great article. Insinuates that profit increases mostly come from increasing hotel and admission prices (and TV revenue). Also that they are working on Marvel rides on the West Coast and overseas. Also confirms discussions here in other threads, that Marvel rides in Orlando are contractually limited to Universal.

Here is some of the article. Click on the link above to see all of it. (I thought it fair to the Sentinel to steer you there for the depth.)

OrlandoSentinel.com
Disney quarterly profit jumps 21% thanks to parks, TV advertising
By Jason Garcia, Orlando Sentinel

8:14 PM EDT, May 8, 2012

In a positive sign for the state of the economy, the Walt Disney Co. said Tuesday that improvements in two of its most consumer-sensitive businesses — theme parks and television advertising — lifted the company to 21 percent profit growth during the second quarter of its fiscal year.

The Burbank, Calif.-based entertainment giant said it earned $1.1 billion for the three months that ended March 31, compared with $942 million a year ago. Total sales climbed 6 percent to $9.6 billion.

But even more than sounding a note on the economy, Disney's earnings underscored the whipsaw nature of its movie studio, which remains the creative heart of the company and the key content pipeline for everything from theme-park rides to consumer products.

Disney's film business lost $84 million in the three months, pulled under by the colossal science-fiction flop "John Carter." But Disney executives spent much of their conference call with investment analysts crowing about the performance of a film released after the quarter had ended: "The Avengers," the Marvel superhero movie that just set an opening-weekend record in the U.S. with $207.1 million in ticket sales and has already grossed more than $700 million worldwide.

Disney Co. President and Chief Executive Officer Bob Iger assured Wall Street that the company is moving quickly to take advantage of the popular film, which features an assortment of well-known comic-book characters. Disney has already lined up releases of "Thor 2" and "Iron Man 3" next year and "Captain America 2" in 2014, and Iger confirmed the company has put an overall Avengers sequel into development.

In addition, Iger said Disney is "hard at work with licensees as well as retailers around the world to stock the shelves as fast as possible" with Avengers merchandise. And he said the company's theme-park engineers have "ramped … up" design work on Marvel-based attractions for parks in California and overseas, though none is likely to be added at Walt Disney World because Universal Orlando holds exclusive theme-park rights to key Marvel properties on the U.S. East Coast.

"I think what you're essentially seeing here is a true franchise, not necessarily in the making, but having been made and launched," Iger said. "There are multiple opportunities to continue to mine this great set of characters."

In addition to their apparently insatiable appetite for superheroes, consumers also showed a willingness to spend more on Disney vacations, as Disney's sprawling theme-parks business continued to recover from the global economic downturn.

Operating income at Walt Disney Parks and Resorts soared 53 percent for the quarter to $222 million on revenue that was up 10 percent to $2.9 billion.

... (Click on link above to read the second half.)

jrgarcia@tribune.com or 407-420-5414
Copyright © 2012, Orlando Sentinel

 

[Magenta Panther]

Since theme-park attendance played a big role in Disney's quarterly profit jump, I think all of us here should take a bow.

(bows)

Hell, why should Iger get all the credit?

Speaking of which, he's probably tickled with the Avengers' success, thinking it justifies his purchase of Marvel. But Uncle Bob should remember that Disney didn't actually make the film; another studio did. It's nice that this film turned out to be a big hit and will help to make up for the John Carter disaster - but Marvel, in the past, has had its share of flops too, and indeed was in such dire straits at one point that it declared bankruptcy. The wisdom of the Marvel purchase, in my opinion, remains to be seen. Although I am glad the Avengers movie is doing so well. Can you imagine the carnage had both Carter AND the Avengers bombed? Not a pretty picture...

 

[TP2000]

In addition, Iger said Disney is "hard at work with licensees as well as retailers around the world to stock the shelves as fast as possible" with Avengers merchandise. And he said the company's theme-park engineers have "ramped … up" design work on Marvel-based attractions for parks in California and overseas, though none is likely to be added at Walt Disney World because Universal Orlando holds exclusive theme-park rights to key Marvel properties on the U.S. East Coast.

If I were a betting man, which I'm not (I only go to Vegas for the shows and the tour of Hoover Dam. Ooh, that generator room!), I would say that Disneyland's Tomorrowland is in for some major rethink and heavy infusion of Marvel sooner rather than later.

Either it goes in Disneyland's Tomorrowland around 2015, or the back corner in the Hollywood Land section of DCA. :lookaroun

And if that's succesful, I can't help but think that Burbank will do everything in their power to get out of the legal contract that prevents them from putting anything Marvel related into the WDW parks. Magic Kingdom's Tomorrowland and/or Disney's Hollywood Studios are prime targets, I would think. The ability to put Marvel into Disney's Hollywood Studios could be like the DHS version of Cars Land; a major 600 Million dollar, 12 acre expansion adding two or three attractions, plus stores and restaurants in a heavily themed environment. But that legalese in the contract gets in the way, and must be obliterated by Burbank lawyers somehow!

 

[Duckberg]

Money money money makes the WORLD go round

 

[jt04]

Since theme-park attendance played a big role in Disney's quarterly profit jump, I think all of us here should take a bow.

(bows)

Hell, why should Iger get all the credit?

Speaking of which, he's probably tickled with the Avengers' success, thinking it justifies his purchase of Marvel. But Uncle Bob should remember that Disney didn't actually make the film; another studio did. It's nice that this film turned out to be a big hit and will help to make up for the John Carter disaster - but Marvel, in the past, has had its share of flops too, and indeed was in such dire straits at one point that it declared bankruptcy. The wisdom of the Marvel purchase, in my opinion, remains to be seen. Although I am glad the Avengers movie is doing so well. Can you imagine the carnage had both Carter AND the Avengers bombed? Not a pretty picture...

The fact that Disney did not make the film actually makes "Uncle Bob's" decision to purchase Marvel all the more brilliant.

After the success of the second Batman film I think it sunk in with Hollywood that the genre was not just a hit or miss summer fare proposition. I think many thought Spiderman was just a case of good timing. The Batman series has proven that these movies can have depth and scope that appeals to a large audience and be cinematic.

We could be in the middle of an era where these movies will be looked back on as we look back on 'westerns' now.


No doubt Disney wants to be able to produce block-busters in house in the manner of The Avengers and as Pixar consistantly does. Which is possibly the primary reason why Disney purchased Pixar and Marvel. They got content and talent in both deals and that can be used to facilitate change in-house. It seems to be working for the animation division and I fully expect it will work for the Disney Studios also.

Notice how each division has been brought back systematically over the last few years. Theme parks is one of the best examples of this and keep in mind the major additions at DCA and the MK have not even opened fully yet.

I believe the theme parks provide the most potential for growth and that if enough investment was made in them (mainly DHS, Epcot, DAK) the parking lots would be full and they would have to post a 'all tickets sold' sign every day. Imagine not being able to access a Disney theme park unless you had advanced tickets. That potential is there IMO.

 

[MichWolv]

Speaking of which, he's probably tickled with the Avengers' success, thinking it justifies his purchase of Marvel. But Uncle Bob should remember that Disney didn't actually make the film; another studio did. It's nice that this film turned out to be a big hit and will help to make up for the John Carter disaster - but Marvel, in the past, has had its share of flops too, and indeed was in such dire straits at one point that it declared bankruptcy. The wisdom of the Marvel purchase, in my opinion, remains to be seen. Although I am glad the Avengers movie is doing so well. Can you imagine the carnage had both Carter AND the Avengers bombed? Not a pretty picture...

Actually, the fact that Marvel made the pic makes the purchase look even better. Iger realized that somebody else had a franchise and the movie-making talent that Disney's marketing and distribution could make a mint with. So he authorized a humongous purchase price and then put the Marvel movie people with the Disney marketing people and will probably make back the entire purchase price in about 4 years, between profits on the movies, toys, clothes, you name it. This doesn't show that Iger knows how to run a movie studio, mind you, but it certainly seems to suggest that he can identify a business opportunity.

 

[GLaDOS]

Was I the only one who noticed the only time he mentioned WDW was when he said Marvel wouldn't be going there?

 

[MichWolv]

If I were a betting man, which I'm not (I only go to Vegas for the shows and the tour of Hoover Dam. Ooh, that generator room!), I would say that Disneyland's Tomorrowland is in for some major rethink and heavy infusion of Marvel sooner rather than later.

Either it goes in Disneyland's Tomorrowland around 2015, or the back corner in the Hollywood Land section of DCA. :lookaroun

And if that's succesful, I can't help but think that Burbank will do everything in their power to get out of the legal contract that prevents them from putting anything Marvel related into the WDW parks. Magic Kingdom's Tomorrowland and/or Disney's Hollywood Studios are prime targets, I would think. The ability to put Marvel into Disney's Hollywood Studios could be like the DHS version of Cars Land; a major 600 Million dollar, 12 acre expansion adding two or three attractions, plus stores and restaurants in a heavily themed environment. But that legalese in the contract gets in the way, and must be obliterated by Burbank lawyers somehow!

It'll be interesting to see if Disney tries to buy its way out of the Uni Marvel contract. It would take a boatload of money that could never be justified by the actual value of Uni's rights. Certainly Disney could, if they decide to, make Universal an offer that it just couldn't refuse. But on the other hand, Universal could look at the success of the Avengers, and decide to double-down on Marvel themselves -- make an Avengers 3-D movie attraction, or a fly with Iron Man attraction...it'll be interesting to see.

I wonder if, instead of trying to buy its way out of the contract, Disney will work around it but still use the characters at WDW. Maybe a Marvel themed fireworks display at DtD, or meet-n-greets at hotels. Since the Avengerail was eventually OKd, it's possible that as long as they don't charge admission to the Marvel character-based stuff, they can use it.

 

[MichWolv]

Was I the only one who noticed the only time he mentioned WDW was when he said Marvel wouldn't be going there?

Did you listen to the earnings call? Audio file is available on the web if you'd like to -- I haven't the time. Just because Garcia only mentioned one reference doesn't mean there was only one. In fact, the actual earnings press release mentions capital spending at WDW, so that'd be a second mention there.

 

[GLaDOS]

Did you listen to the earnings call? Audio file is available on the web if you'd like to -- I haven't the time. Just because Garcia only mentioned one reference doesn't mean there was only one. In fact, the actual earnings press release mentions capital spending at WDW, so that'd be a second mention there.

I listened to bits and pieces. And from what I could tell the only time Bob mentioned WDW was during Marvel in the parks. Didn't mention it during the other portions, whereas he went into detail about DLR and Shanghai. I dunno. Just seemed odd. I'm not trying to make a big deal out of it or anything. Just weird.

 

[Buried20KLeague]

If I were a betting man, which I'm not (I only go to Vegas for the shows and the tour of Hoover Dam.

"Anybody know where I can get some dam bait?" - Uncle Eddie

 

[MichWolv]

I listened to bits and pieces. And from what I could tell the only time Bob mentioned WDW was during Marvel in the parks. Didn't mention it during the other portions, whereas he went into detail about DLR and Shanghai. I dunno. Just seemed odd. I'm not trying to make a big deal out of it or anything. Just weird.

Did he mention the other parks much? It seems that earnings calls always have discussion of parks in general, but often don't get into specific parks much except to discuss major capital plans, like the DCA investment and the new park in Shanghai.

 

[Magenta Panther]

And meanwhile the Yeti will continue to do its disco thang...

Nice that Iger has his priorities straight.

And speaking of rides based on superheroes...Disney/Pixar made this movie about superheroes once, what was it called...OH YEAH "The Incredibles". Yeah, the Disney parks have a great ride based on that OH YEAH no they don't...:lookaroun

Once again, Iger looks outside of the Disney archives for attraction properties because he has so little faith in Disney-based creations. Feh.

 

[saxamoophone]

Disney didn't actually make the film; another studio did.

Actually, it was produced by Marvel ( which is the same as Pixar now of course ), and the distribution was Walt Disney Pictures. Paramount was bought out of the Marvel movies starting in 2012, and simply have their logos on the film ( and ugh, 8% total gross). So in a nutshell: it was the first Marvel movie made by Disney from top to bottom (despite the fact Paramount tried to trick everyone )!

I think Comcast has two options here: Double down and expand Marvel Super Hero's Island ( the recently redone Spiderman really puts the AMAZING in Spiderman, and helps ensure it stays in the top 5 themepark attractions in Orlando), or sell to Disney. No way Universal sells off the Marvel rights to Disney, at any price. It's going to be all or nothing.

From what I understand, Universal Orlando is valued at around 2+ billion dollars.

Is that worth it?

To own the Marvel brand from top to bottom.
To expand Marvel to 4 other parks.

Probably not, but I'm sure the conersation has being had at a high level over in LA this week now that they realize the Marvel brand is big $$$$.

 

[GrumpyFan]

Wild idea here, but since Universal Orlando owns the rights to Marvel characters east of the Mississippi, why can't Disney just partner with them to build a new Avengers attraction. Here's how I would envision it. It would take a lot of legal wrangling, but basically, Disney develops the attraction, sells or licenses it to Universal Orlando to install and maintain in their park, but retain the rights to also install it in other Disney parks outside of Orlando. Seems like it would be a win-win scenario for everybody. Sure, they might lose a portion of the guests who visit Orlando and choose to go to Universal, but I hardly think it would be enough to hurt WDW. Besides, what they lose in Orlando would likely be made up for elsewhere and then they would still have license and merchandise revenue to boot, plus they might even get some cross-over guests who come to see the Avengers attraction at Uni, but also visit WDW.

 

[saxamoophone]

Wild idea here, but since Universal Orlando owns the rights to Marvel characters east of the Mississippi, why can't Disney just partner with them to build a new Avengers attraction. Here's how I would envision it. It would take a lot of legal wrangling, but basically, Disney develops the attraction, sells or licenses it to Universal Orlando to install and maintain in their park, but retain the rights to also install it in other Disney parks outside of Orlando. Seems like it would be a win-win scenario for everybody. Sure, they might lose a portion of the guests who visit Orlando and choose to go to Universal, but I hardly think it would be enough to hurt WDW. Besides, what they lose in Orlando would likely be made up for elsewhere and then they would still have license and merchandise revenue to boot, plus they might even get some cross-over guests who come to see the Avengers attraction at Uni, but also visit WDW.

Nice Idea!

Likewise, maybe Universal could license out the Spiderman ride to Disney for use at Disneyland parks.

 

[herc]

It'll be interesting to see if Disney tries to buy its way out of the Uni Marvel contract. It would take a boatload of money that could never be justified by the actual value of Uni's rights. Certainly Disney could, if they decide to, make Universal an offer that it just couldn't refuse. But on the other hand, Universal could look at the success of the Avengers, and decide to double-down on Marvel themselves -- make an Avengers 3-D movie attraction, or a fly with Iron Man attraction...it'll be interesting to see.

Thought that Uni had the contracts on the characters that only had attractions or restaurants. Iron Man does not have an attraction and possibly not in any contract that Uni has. Possibly Disney has rights to certain characters, but not sure.

 

[jt04]

Thought that Uni had the contracts on the characters that only had attractions or restaurants. Iron Man does not have an attraction and possibly not in any contract that Uni has. Possibly Disney has rights to certain characters, but not sure.

Disney has rights to any character not featured at IoA from my understanding. And any new characters from now on.

FWIW-- The Avengers broke the 7 day domestic record today. Today is only day 5 of release. Someone quick, get a calculator. :lol:

 

[bethymouse]

Greed!

It is all about money=business sadly!
I am not so sure that I like the idea of this Disney/Marvel "marriage".
I am getting confused!
I am probably the only one that feels this way

 

[MichWolv]

Thought that Uni had the contracts on the characters that only had attractions or restaurants. Iron Man does not have an attraction and possibly not in any contract that Uni has. Possibly Disney has rights to certain characters, but not sure.

My understanding from reading the exerpts of the contract filed in public docs is that Uni has rights to all characters in the "family" of any chacter used in the park, or something like that. And I suspect they would claim that using Hulk and Captain America means they use the Avenger family, and so Disney couldn't use Iron Man, Black Widow, etc.

Iger's comments suggest that Disney isn't intending to challenge Uni's rights.