Rumors. Musings. Casual.

[MerlinTheGoat]

…meh…way too “original trilogy”…

…we know that our marketing people assure us that people down want that

(I was in the LEGO store yesterday and had was completely reinforced…of course )

X-wings are used throughout the sequel trilogy, and this specific design is the one used in those movies. There's literally still one of them outside the queue of Rise (and the Falcon has an entire ride dedicated to it).

The ships aren't one of the things that Disney have been criticized for not taking from the OT when designing the land. It's the characters, story and environments. Whatever reason they had for retiring this thing, having connections with the OT had nothing to do with it. It likely was deemed more trouble than they were willing to deal with. Hence all of the broken effects in Rise.

Entirely possible of course, but I don't really think the earnings reports for Disney suggest that they even would need to go in debt (more) to fund the planned spend for the Parks division. I'm moreso pointing out that there seems to be significant variation on how different people are characterizing the financial status of the company in terms of their ability to invest more in the parks.

There's some spin on either side, but the company is definitely not doing nearly as well as they claim. They've sort of run out of Covid related excuses too. There's ample truth in the film division struggling severely right now, and hotel bookings aren't doing well either. The parks, and unfortunately paid Genie+/LL, are likely contributing a lot to keeping things manageable.

They'll be taking on quite a bit of debt if they do invest what they promised. Even a relatively healthier company would as well. Not a complaint on my part that they ARE willing to invest that sort of cash. Just saying that they are struggling financially and this will indeed have an effect.

 

[Sirwalterraleigh]

X-wings are used throughout the sequel trilogy, and this specific design is the one used in those movies. There's literally still one of them outside the queue of Rise (and the Falcon has an entire ride dedicated to it).

The ships aren't one of the things that Disney have been criticized for not taking from the OT when designing the land. It's the characters, story and environments. Whatever reason they had for retiring this thing, having connections with the OT had nothing to do with it. It likely was deemed more trouble than they were willing to deal with. Hence all of the broken effects in Rise.

That was tongue in cheek.

And they managed to kinda screw up the ships too…”slight” redesigns and dumb new label of the combatants that looks aloof. More “sleek” instead of the chunky that actually caused the appeal.

Pretty much complete failure…but that’s kinda set in stone now so there’s no use debating it.

 

[MisterPenguin]

X-wings are used throughout the sequel trilogy, and this specific design is the one used in those movies. There's literally still one of them outside the queue of Rise (and the Falcon has an entire ride dedicated to it).

The ships aren't one of the things that Disney have been criticized for not taking from the OT when designing the land. It's the characters, story and environments. Whatever reason they had for retiring this thing, having connections with the OT had nothing to do with it. It likely was deemed more trouble than they were willing to deal with. Hence all of the broken effects in Rise.


There's some spin on either side, but the company is definitely not doing nearly as well as they claim. They've sort of run out of Covid related excuses too. There's ample truth in the film division struggling severely right now, and hotel bookings aren't doing well either. The parks, and unfortunately paid Genie+/LL, are likely contributing a lot to keeping things manageable.

They'll be taking on quite a bit of debt if they do invest what they promised. Even a relatively healthier company would as well. Not a complaint on my part that they ARE willing to invest that sort of cash. Just saying that they are struggling financially and this will indeed have an effect.

Last quarter, Disney *profited* over $3B.

They are doing as well as they claim according to SEC filings.

Is there proof otherwise outside of whispers?

 

[BrianLo]

They'll be taking on quite a bit of debt if they do invest what they promised. Even a relatively healthier company would as well. Not a complaint on my part that they ARE willing to invest that sort of cash. Just saying that they are struggling financially and this will indeed have an effect.

How do you figure? Free cash flow is currently way in excess of 6 billion a year; and that's post tax and already includes a big chunk of parks Capex ongoing. The current spend isn't leading to more debt, unless they do something else major in the company.

Though they'll probably finance the cruise ships, since there is usually quite generous financing from the builders.

 

[doctornick]

How do you figure? Free cash flow is currently way in excess of 6 billion a year; and that's post tax and already includes a big chunk of parks Capex ongoing. The current spend isn't leading to more debt, unless they do something else major in the company.

Though they'll probably finance the cruise ships, since there is usually quite generous financing from the builders.

This. Unless you are suggesting that Disney is outright lying on their financials, what is currently going on suggests they can pay for the reported parks outlay based on how they are currently functioning without taking on more debt.

Now, granted, that doesn't mean that they will continue to have the same net profit going forward in upcoming years so our course there could be the possibility that they can't actual pay for it. I'd certainly be cautious regarding some things including the revenue from the parks themselves plus movie performance in the future (but could it get much worse than the past year?) and even legacy media like cable networks (especially ESPN). On the flip side, we will likely see D+ finally start being profitable which would work in the opposite direction of being to contribute to free cash.

 

[peter11435]

.

They'll be taking on quite a bit of debt if they do invest what they promised. Even a relatively healthier company would as well. Not a complaint on my part that they ARE willing to invest that sort of cash. Just saying that they are struggling financially and this will indeed have an effect.

that’s not really true

 

[MR.Dis]

that’s not really true

I agree. Let us not forget the tremendous losses on the studio side, which was historic and not likely to happen again. The profit picture should be much better this year than last if the studios just break even.

 

[BrianLo]

I agree. Let us not forget the tremendous losses on the studio side, which was historic and not likely to happen again. The profit picture should be much better this year than last if the studios just break even.

I think there tends to be an overweighting of studio performance on the companies health. Even during the best of times (2019) it was the third line item bringing in less than half of the operating revenue that parks did.

What has meaningfully impacted the company the last 5 years is the acceleration of the linear landscape collapsing.

Parks, Resorts, Experiences are self-funding. There’s plenty of money from the parks, for the parks, with plenty of money to spare. That can and will change. But the biggest risk to capex for the parks, is the parks themselves.

There is however an immediate future where the biggest line item is DTC supplanting linear. If that continues forward, the companies health is very assured for this media cycle. Regardless of uneven parks performance the coming decade and even more uneven studio performance.

But like everyone is saying they have committed to spending during a period of time the companies segments could not have done much worse. The next quarter will continue to be informative that the company is in a financial upswing. Including coming off the literal nightmare scenario that they entire parks segment was shut down we sit here a little over four years later with the messaging somehow that the parks are ‘reliable’ - I’ll take it!

 

[MR.Dis]

I think there tends to be an overweighting of studio performance on the companies health. Even during the best of times (2019) it was the third line item bringing in less than half of the operating revenue that parks did.

What has meaningfully impacted the company the last 5 years is the acceleration of the linear landscape collapsing.

Parks, Resorts, Experiences are self-funding. There’s plenty of money from the parks, for the parks, with plenty of money to spare. That can and will change. But the biggest risk to capex for the parks, is the parks themselves.

There is however an immediate future where the biggest line item is DTC supplanting linear. If that continues forward, the companies health is very assured for this media cycle. Regardless of uneven parks performance the coming decade and even more uneven studio performance.

But like everyone is saying they have committed to spending during a period of time the companies segments could not have done much worse. The next quarter will continue to be informative that the company is in a financial upswing. Including coming off the literal nightmare scenario that they entire parks segment was shut down we sit here a little over four years later with the messaging somehow that the parks are ‘reliable’ - I’ll take it!

You miss my point, which is not what the positive numbers will be in the studio section but there will not be a multiple billion dollars in losses.

 

[BrianLo]

You miss my point, which is not what the positive numbers will be in the studio section but there will not be a multiple billion dollars in losses.

I was agreeing with you, I thought?

There won’t be multiple billions of dollars in studio losses, ever. The focus on the box office undersells how much other revenue the studios generate. Even with four quite major flops last year (and hardly any standout blowout successes) the studio didn’t lose billions.

Granted it includes Avatar (and Strange world), but the fiscal 2023 studios lost 179 million. Hardly billions as you say.

 

[mikejs78]

I was agreeing with you, I thought?

There won’t be multiple billions of dollars in studio losses, ever. The focus on the box office undersells how much other revenue the studios generate. Even with four quite major flops last year (and hardly any standout blowout successes) the studio didn’t lose billions.

Granted it includes Avatar (and Strange world), but the fiscal 2023 studios lost 179 million. Hardly billions as you say.

Correct me if I'm wrong, but despite the losses, isn't studios still profitable? Are any of the three major segments at TWDC operating at a loss?

 

[networkpro]

Correct me if I'm wrong, but despite the losses, isn't studios still profitable? Are any of the three major segments at TWDC operating at a loss?

It depends on your standard for "profit" is. If its limited to ongoing net profit and loss per year, that's one thing, but if it includes recouping the purchase price for each of the acquisitions and/or the ratio ROI per film/series its indeed another. The Parks and Cruise line are a bright spots, other segments are just smudges.

 

[djkidkaz]

Good ol Laughing Place Spirit and WDW1971 loves to pretend like he’s doing everyone a favor and gracing us with his presence. Same schtick for decades, with very little actual rumors of his ever coming true. As they say, even a broken clock will be right twice a day. Nothing to see here…move along.

 

[JoeCamel]

It depends on your standard for "profit" is. If its limited to ongoing net profit and loss per year, that's one thing, but if it includes recouping the purchase price for each of the acquisitions and/or the ratio ROI per film/series its indeed another. The Parks and Cruise line are a bright spots, other segments are just smudges.

Right! With all the crowing about how D+ is on the cusp of profitability I have to remind that they have spent 8B+ to date to get this established so please save the profitability talk until it generates that money back and covers it's cost at the same time.

 

[mikejs78]

It depends on your standard for "profit" is. If its limited to ongoing net profit and loss per year, that's one thing, but if it includes recouping the purchase price for each of the acquisitions and/or the ratio ROI per film/series its indeed another. The Parks and Cruise line are a bright spots, other segments are just smudges.

Right! With all the crowing about how D+ is on the cusp of profitability I have to remind that they have spent 8B+ to date to get this established so please save the profitability talk until it generates that money back and covers it's cost at the same time.

Except none of that is relevant given the context of the conversation? We are talking about the overall financial health of the company (where net profit and cash flow matter) and whether or not their investment in the parks will cause them to go massively into debt. And the answer is the company is healthy (all segments are operating at a profit, and the company has very good cash positions).

As far as the parks, despite some misconceptions, the parks don't need to fund the other business units since each one maintains a net profit, and the net profit of the experiences and consumer products segment is more than enough to cover the $60b over 10 years, as well as have plenty left over to still produce a hefty profit for the company.

Yes, individual investments may be in the red, or may be years before they generate the returns needed to recoup the investment, but none of that matters. The minute streaming makes a profit, even if it's small, Wall Street will jack the stock price up.

 

[networkpro]

Perhaps, but the analysts are a fickle bunch that will start down the road of opportunity costs and what had to be sacrificed to achieve that ROI like Hotstar.

 

[mikejs78]

Perhaps, but the analysts are a fickle bunch that will start down the road of opportunity costs and what had to be sacrificed to achieve that ROI like Hotstar.

That kind of stuff rarely comes into play. It's much more fickle and based on current returns.

 

[doctornick]

Right! With all the crowing about how D+ is on the cusp of profitability I have to remind that they have spent 8B+ to date to get this established so please save the profitability talk until it generates that money back and covers it's cost at the same time.

That’s fine, but this of talk completely ignores that the service itself is an asset with its own value. Eg Hulu was valued at $27.5B in the recent sale.

Or to put into a different prospective, if Disney were to go and build a brand new park for $1.5B or whatever, you wouldn’t just dismiss it as being worthless until it makes that amount in total profit. Because the park itself has value as an asset.

 

[peter11435]

Right! With all the crowing about how D+ is on the cusp of profitability I have to remind that they have spent 8B+ to date to get this established so please save the profitability talk until it generates that money back and covers it's cost at the same time.

Disney+ has been loosing money for years because of those billions spent to establish the service. But it’s not like it hasn’t been bringing in revenue. So they don’t have to wait until profitability to generate that 8B+….

 

[BrianLo]

Correct me if I'm wrong, but despite the losses, isn't studios still profitable? Are any of the three major segments at TWDC operating at a loss?

They bury the studios in content and licensing and it lost 179 million last fiscal year. Which is sort of neutral in the grand scheme of things.

‘Entertainment’ was profitable. Which consisted of DTC (significantly negative) though increasingly rapidly and linear (significantly positive) though declining.