Rumor: Details on Disney's Hollywood Adventure

[1023]

Is it more important that someone possibly exaggerated a number or the fact that Universal stated they were going to add a new attraction every year and they seem to be pretty much following through on that?

Agreed...500M a year and the new attraction that buys in both parks is the relevant information or what the take away should be. Facts should be considered when providing an informed opinion.

*1023*

 

[wdisney9000]

For anyone just jumping to the latest page of this thread, you MUST remember that the article linked in the original post IS NOT ANYTHING CONFIRMED. Its just a hodge podge of old and new rumors with a lot guessing and wishful thinking. Ill repeat what has been said by others: Dont fall for the hype. Thats all it is- This article has done more damage than anything else. They should have done a better job disclaiming that their information is COMPLETELY third or fourth hand and in NO WAY WHATSOEVER verified on any level other than that of what any Disney Bus Driver would know.

I just read the last several pages to catch up and on every page there is someone thinking or asking about an attraction thats getting booted. Aside from the attractions that have already closed, there is nothing solid to go on. Take a deep breathe and read through the thread, not jump to the last page and assume that Illuminations, Imagination, or anything else is getting replaced. Dont put any faith in what the article says aside from the budget.

And for the love of all things good and pure, please, please, pretty please stop the armchair imagineering. There are dedicated forums for that.

 

[BrianLo]

I'm a big believer in looking at percentages. Percentages put things into perspective. They adjust for inflation, take into account the size of an organization, and facilitate historical and industry comparisons. Disney spending $100M in 1971 is not the same as Disney spending $100M in 2015. Nor is Disney (with 10 theme parks, 4 cruise ships, and 2 water parks) spending $100M the same as Universal (with 3 domestic theme parks) spending $100M. "Disney dollars" have undergone tremendous inflation over the decades and today's Disney's capital expenditure (capex) gets spread pretty thin.

I don't oppose percentages in the right context, but they are also a common marketing tactic to mislead people. For example: Drug X prevents 40% of condition Y, but if condition Y exists in <0.001% of the population a percentage misleads the reader into how effective the X is for the whole population.

Same with theme parks expenditure that should be considered in the context of scale. If a revenue stream is peanuts its perfectly plausible a company could sink in 200% of revenue into Capex. Similar to a park like HKDL that is now just churning a profit. Similar to Tokyo investing more than 150% to build Tokyo Disney Sea. However, now I'd never expect Tokyo to investment more than 100% of revenue into Capex for a third park, simply because the scale has increased so drastically.

If you rely on presenting the numbers using only a single metric, it is done in part to massage the view point and mislead the reader. I don't disagree with the point however, but all of this is to say the current capex isn't as historically tragic as percentages would lead one to believe.

The upcoming rumoured capex numbers domestically are more appropriate for the size of Disney's domestic operations and that makes me quite happy. We are talking an extra 4+ billion bandied about between Disneyland/WDW, on top of some current expenditures and projects. It's not unreasonable that roughly 1 billion will be spent domestically per year over the next ~5 years. That's a fantastic number and quite competitive to Universal's 500million worldwide. That's also a number Disney should have always been spending for the last decade.

 

[wdisney9000]

All you (or most posters here) care about are rides and only rides at Walt Disney World. It's unbelievably narrow-minded to ignore DCA, NGE, New Fantasyland, the Dream, the Fantasy, Disney Springs, and everything international and claim that Disney isn't investing in the parks and resorts segment. It's called a priority list. DHS is now at the top of that list.

I care about EXPERIENCES at WDW, not rides. The rides are simply an integral part of the overall experience. Sure, the cruise lines and international parks are doing things, but this thread (and most others here) are in regards to the parks in FLORIDA. So what do we have in your list that pertains to FLORIDA? NGE, New Fantasyland, and Disney Springs.

Those three items leave much to be desired. While theyre not horrible, theyre nothing groundbreaking, especially considering the price tag. All over hyped considering what the final product was/will be. Just because they built it doesnt mean its worthy of being heralded as an amazing experience. Not saying its a bad experience either, just over hyped. Thats been their track record as of late. Hopefully things will turn around with DHS, but I think for many people, Disney has to prove it. Which is a shame, but they painted themselves into this corner. People are getting tired of trusting the buzz words and mommy bloggers.

 

[ParentsOf4]

I don't oppose percentages in the right context, but they are also a common marketing tactic to mislead people. For example: Drug X prevents 40% of condition Y, but if condition Y exists in <0.001% of the population a percentage misleads the reader into how effective the X is for the whole population.

Same with theme parks expenditure that should be considered in the context of scale. If a revenue stream is peanuts its perfectly plausible a company could sink in 200% of revenue into Capex. Similar to a park like HKDL that is now just churning a profit. Similar to Tokyo investing more than 150% to build Tokyo Disney Sea. However, now I'd never expect Tokyo to investment more than 100% of revenue into Capex for a third park, simply because the scale has increased so drastically.

If you rely on presenting the numbers using only a single metric, it is done in part to massage the view point and mislead the reader. I don't disagree with the point however, but all of this is to say the current capex isn't as historically tragic as percentages would lead one to believe.

The upcoming rumoured capex numbers domestically are more appropriate for the size of Disney's domestic operations and that makes me quite happy. We are talking an extra 4+ billion bandied about between Disneyland/WDW, on top of some current expenditures and projects. It's not unreasonable that roughly 1 billion will be spent domestically per year over the next ~5 years. That's a fantastic number and quite competitive to Universal's 500million worldwide. That's also a number Disney should have always been spending for the last decade.

OK but I fail to a see where you and I disagree since much of what you wrote reinforces the importance of considering percentages when evaluating a company's commitment to an investment.

For a startup to invest $100M means it's committing its entire future to that project.

For a company like Disney to commit $100M means considerably less.

Given the size of its existing Parks & Resorts assets, Disney needs to spend north of $1 billion annually just to keep those aging assets from degrading. (Sometimes referred to as "maintenance capex".) Disney's smallest Parks & Resorts capex budget in the last 20 years was $875M in 2003 when Disney was shuttering hotels in an attempt to preserve profitability in a post-9/11 downturn. Universal's largest Theme Parks division capex budget was last year's $671M. Universal spending $671M is not the same as Disney spending $875M. Again, percentages matter.

Roughly, Disney probably should spend about $400M per year in Orlando on growth initiatives. This represents less than 5% of WDW's annual revenue and can be thought of as "product development". Considering that the New Fantasyland's total budget was slightly above that, WDW arguably should be opening the equivalent of a New Fantasyland every 1-to-2 years.

Even between the New Fantasyland, MyMagic+, and Pandora, Disney has been below that target for a few years now. The 2000s were even worse. With the rumored large capital commitment to be spread out over the next 6 years, Disney is aiming to accelerate its WDW investment.

The new project suggests that Disney's corporate leadership has recognized that WDW was underfunded in the 2000s, and that a large investment is needed to rejuvenate the product.

 

[AndyMagic]

The thing that kills me is that this large renovation with an enormous price tag wouldn't have been necessary had they consistently updated the place with new attractions over the years. It's like those cheap landlords who defer maintenance for decades until their building is on the verge of collapse and then get a big loan to spend years renovating everything from the ground-up. Eventually they're going to have to do the same thing with Epcot.

 

[PhotoDave219]

For anyone just jumping to the latest page of this thread, you MUST remember that the article linked in the original post IS NOT ANYTHING CONFIRMED. Its just a hodge podge of old and new rumors with a lot guessing and wishful thinking. Ill repeat what has been said by others: Dont fall for the hype. Thats all it is- This article has done more damage than anything else. They should have done a better job disclaiming that their information is COMPLETELY third or fourth hand and in NO WAY WHATSOEVER verified on any level other than that of what any Disney Bus Driver would know.

I just read the last several pages to catch up and on every page there is someone thinking or asking about an attraction thats getting booted. Aside from the attractions that have already closed, there is nothing solid to go on. Take a deep breathe and read through the thread, not jump to the last page and assume that Illuminations, Imagination, or anything else is getting replaced. Dont put any faith in what the article says aside from the budget.

And for the love of all things good and pure, please, please, pretty please stop the armchair imagineering. There are dedicated forums for that.

I owe you a drink!

 

[ford91exploder]

OK but I fail to a see where you and I disagree since much of what you wrote reinforces the importance of considering percentages when evaluating a company's commitment to an investment.

For a startup to invest $100M means it's committing its entire future to that project.

For a company like Disney to commit $100M means considerably less.

Given the size of its existing Parks & Resorts assets, Disney needs to spend north of $1 billion annually just to keep those aging assets from degrading. (Sometimes referred to as "maintenance capex".) Disney's smallest Parks & Resorts capex budget in the last 20 years was $875M in 2003 when Disney was shuttering hotels in an attempt to preserve profitability in a post-9/11 downturn. Universal's largest Theme Parks division capex budget was last year's $671M. Universal spending $671M is not the same as Disney spending $875M. Again, percentages matter.

Roughly, Disney probably should spend about $400M annually in Orlando each year on growth initiatives. This represents less than 5% of WDW's annual revenue and can be thought of as "product development". Considering that the New Fantasyland's total budget was slightly above that, WDW arguably should be opening the equivalent of a New Fantasyland every 1-to-2 years.

Even between the New Fantasyland, MyMagic+, and Pandora, Disney has been below that target for a few years now. The 2000s were even worse. With the rumored large capital commitment to be spread out over the next 6 years, Disney is aiming to accelerate its WDW investment.

The new project suggests that Disney's corporate leadership has recognized that WDW was underfunded in the 2000s, and that a large investment is needed to rejuvenate the product.

And yet this so called 'investment' is less than 10% of a year's stock repurchases... Wake me when Disney starts ADDING to the parks

 

[PhotoDave219]

OK but I fail to a see where you and I disagree since much of what you wrote reinforces the importance of considering percentages when evaluating a company's commitment to an investment.

For a startup to invest $100M means it's committing its entire future to that project.

For a company like Disney to commit $100M means considerably less.

Given the size of its existing Parks & Resorts assets, Disney needs to spend north of $1 billion annually just to keep those aging assets from degrading. (Sometimes referred to as "maintenance capex".) Disney's smallest Parks & Resorts capex budget in the last 20 years was $875M in 2003 when Disney was shuttering hotels in an attempt to preserve profitability in a post-9/11 downturn. Universal's largest Theme Parks division capex budget was last year's $671M. Universal spending $671M is not the same as Disney spending $875M. Again, percentages matter.

Roughly, Disney probably should spend about $400M annually in Orlando each year on growth initiatives. This represents less than 5% of WDW's annual revenue and can be thought of as "product development". Considering that the New Fantasyland's total budget was slightly above that, WDW arguably should be opening the equivalent of a New Fantasyland every 1-to-2 years.

Even between the New Fantasyland, MyMagic+, and Pandora, Disney has been below that target for a few years now. The 2000s were even worse. With the rumored large capital commitment to be spread out over the next 6 years, Disney is aiming to accelerate its WDW investment.

The new project suggests that Disney's corporate leadership has recognized that WDW was underfunded in the 2000s, and that a large investment is needed to rejuvenate the product.

You sir will be very busy with the CapEx to come....

 

[wdisney9000]

The thing that kills me is that this large renovation with an enormous price tag wouldn't have been necessary had they consistently updated the place with new attractions over the years. It's like those cheap landlords who defer maintenance for decades until their building is on the verge of collapse and then get a big loan to spend years renovating everything from the ground-up. Eventually they're going to have to do the same thing with Epcot.

While I completely agree, I think @ParentsOf4 makes a good point about the corporate leadership possibly, (I stress the word possibly as we have been hoodwinked before) recognizing that the parks have been underfunded and at least theyre doing something now, rather than years down the road. Its overdue, but at least things are happening now. I think the years of neglect will pay off with a massive overhaul rather than mediocre NFL type enhancements here and there.

I feel more excited about WDW than I have in a long time. My hopes are high, but Im remaining cautious until we hear more, and I dont think that D-23 is gonna be our day to get any big news for SW at DHS, I just dont see it happening. For once, Im defending the company, not bashing them because I think they have recognized the problem and theyre gonna do what Disney does best and blow our socks off. C'mon BOD, dont let me down!

 

[ford91exploder]

While I completely agree, I think @ParentsOf4 makes a good point about the corporate leadership possibly, (I stress the word possibly as we have been hoodwinked before) recognizing that the parks have been underfunded and at least theyre doing something now, rather than years down the road. Its overdue, but at least things are happening now. I think the years of neglect will pay off with a massive overhaul rather than mediocre NFL type enhancements here and there.

I feel more excited about WDW than I have in a long time. My hopes are high, but Im remaining cautious until we hear more, and I dont think that D-23 is gonna be our day to get any big news for SW at DHS, I just dont see it happening. For once, Im defending the company, not bashing them because I think they have recognized the problem and theyre gonna do what Disney does best and blow our socks off. C'mon BOD, dont let me down!

I'm expecting to be underwhelmed, I'm not even sure TWDC has the capability anymore to BE amazing

 

[BrianLo]

OK but I fail to a see where you and I disagree since much of what you wrote reinforces the importance of considering percentages when evaluating a company's commitment to an investment.

For a startup to invest $100M means it's committing its entire future to that project.

For a company like Disney to commit $100M means considerably less.

I don't disagree, I just wanted to point out that percentages are not a perfect apples to apples comparison either. A larger company cannot possibly scale investments in perpetuity. The truth lies somewhere in the middle between the hard dollar value of a capex project, the percentage of revenue, and the sheer size of the company. Percentages should definitely be considered, but not be the only metric. The point really wasn't towards you though, it was more of a clarification for others interpreting the numbers.

Written another way, for a startup to invest 100% of its revenue means considerably less than a company like Disney committing 100%. It's simply not sustainable to percentage point for percentage point grow capex with revenue. Its reasonable that a small startup may be able to quadruple their meagre revenue with a 100% investment. Disney is of the size that you can't exponentially increase their revenue forever. It can be and should be increased as the company grows, but you can't keep betting the whole farm forever at the risk of diminishing returns. I totally agree that their past decade has been abysmal domestically though, I didn't mean to devalue the actual point of the analysis. They were not matching hard dollar for dollar investments from much smaller companies and that was shameful.

 

[peter11435]

Statement from the 10Q Filing for Comcast's NBCUniversal report:

Theme Parks: Consists primarily of our Universal theme parks in Orlando, Florida and Hollywood, California.

CAPEX from the 10Q:

View attachment 99530

This seems to be a pretty consistent quarterly number. Around $150 per quarter. Last year, same quarter it was 144...

*1023*

So their capex for the second quarter was around $150 million and I believe Disney's was around $900 million

 

[danlb_2000]

The thing that kills me is that this large renovation with an enormous price tag wouldn't have been necessary had they consistently updated the place with new attractions over the years. It's like those cheap landlords who defer maintenance for decades until their building is on the verge of collapse and then get a big loan to spend years renovating everything from the ground-up. Eventually they're going to have to do the same thing with Epcot.

Yeah, if things are handled properly there should never need to be a huge park wide renovation. The parks should be designed and thought out so that they can grow and evolve without having to be redone completely.

 

[peter11435]

I'm expecting to be underwhelmed, I'm not even sure TWDC has the capability anymore to BE amazing

I doubt anything can impress you.

 

[wdisney9000]

I'm expecting to be underwhelmed, I'm not even sure TWDC has the capability anymore to BE amazing

Cant blame you one bit for feeling that way. A month ago, I would have said the same thing. But Ive felt a heartbeat in the last two weeks in my once expired expectations. It could just be cadaveric spasms, or it could be the phoenix rising from its ashes.

 

[ford91exploder]

Statement from the 10Q Filing for Comcast's NBCUniversal report:

Theme Parks: Consists primarily of our Universal theme parks in Orlando, Florida and Hollywood, California.

CAPEX from the 10Q:

View attachment 99530

This seems to be a pretty consistent quarterly number. Around $150 per quarter. Last year, same quarter it was 144...

*1023*

Which works out to 600M GROWTH CAPEX per year, Assuming Disney takes 7 years to build that will be 428 Mil per year, Yeah it looks like 'The Parks Which Must Not be named' are getting more investment going forward than the Disney parks.

 

[BrianLo]

Cant blame you one bit for feeling that way. A month ago, I would have said the same thing. But Ive felt a heartbeat in the last two weeks in my once expired expectations. It could just be cadaveric spasms, or it could be the phoenix rising from its ashes.

I said about a year back that I would be satisfied if the DHS redo went through in light of things happening already at Animal Kingdom. I too said I'd actually be impressed if they didn't completely ignore Epcot in the process. The fact that the DHS budget is astronomical and MK somehow is getting a not altogether insignificant investment too has me actually shocked and without criticism of the direction of WDW.

I'll speak with my wallet and likely move up from 1-2 trips a decade to biannual visits starting 2017.

The next five years sound promising for all 12 parks in the Disney portfolio... when has that ever happened?

 

[SoupBone]

mommy bloggers.

This is one of their biggest problems, and the equivalent of a "Yes Man". They get free stuff to promote Disney attractions as the best thing ever, and while the sky is falling posts are also exaggerated, they are closer to the truth than those painting this rosy picture, and every new attraction as being worthy of the name Disney.

 

[Brer Panther]

They aren't dumb enough to kill Figment again. He's still a money spinner at the park.

Remember those rumors about Phineas and Ferb going into the pavilion? I feel the same way about this as I felt about that: if Figment's just teaming up with the characters, it's fine. I just want him to be there. And not just in a quick cameo like the second version.