So no Star Wars in the forseeable future

[DDLand]

@marni1971 I do have one question, and if you don't feel like answering I understand. I know MiceChat blamed most of the Star Wars problems on MyMagic, and that seems believable. However, it looks like they're ignoring the other elephant in the room. Shanghai. Do you think our DHS Star Wars budget could've been part of the 800,000,000 shipped off overseas?

Edit:I do know what Iger said about incorporating VII in. I'm taking that with a grain of salt...

 

[marni1971]

@marni1971 I do have one question, and if you don't feel like answering I understand. I know MiceChat blamed most of the Star Wars problems on MyMagic, and that seems believable. However, it looks like they're ignoring the other elephant in the room. Shanghai. Do you think our DHS Star Wars budget could've been part of the 800,000,000 shipped off overseas?

Edit:I do know what Iger said about incorporating VII in. I'm taking that with a grain of salt...

It wouldn't surprise me. There are definitely two money pits that have had a knock on effect elsewhere, with MyTragic directly using a contingency fund taken from P&R budgets. Shanghai.... maybe.

 

[DDLand]

It wouldn't surprise me. There are definitely two money pits that have had a knock on effect elsewhere, with MyTragic directly using a contingency fund taken from P&R budgets. Shanghai.... maybe.

Thanks! I just sort of imagined their thought process.
Well Shanghai needs the extra money.
Let's put the SW plans on hold for Frozen parties instead. What's funny is it worked. The place seemed to be packed...

 

[marni1971]

Let's put the SW plans on hold for Frozen parties instead. What's funny is it worked. The place seemed to be packed...

It did work. It saved DHS's 2014-15 annual results. Like Epcots F&W, the parks bottom line is being propped up. They used to do this with attractions.

 

[DDLand]

It did work. It saved DHS's 2014-15 annual results. Like Epcots F&W, the parks bottom line is being propped up. They used to do this with attractions.

Really I should've used the word sad instead of funny above. They get rewarded for doing next to nothing. All those DHS guests had no idea they were enabling Disney to slow expansion down to a glacial pace. We'll be lucky if it's done by 2021.

 

[danlb_2000]

It's happening. It's in development. It's going to be a huge addition to every single Disney park. Some folks just aren't happy that it isn't already here.

There is no way Star Wars will be a huge addition to every park, not going to happen. They will likely add new Star Wars content to each resort, but at this point we don't even know how big these additions will be in each one.

 

[jloucks]

Doesn't have anything to do with not wanting to invest in the parks? Iger is a disgrace - a CEO man more interested in profits than investing in the parks. A CEO whose salary is determined on profit, thus any expenditure on the parks hits his salary !!!!

Now I am a pretty big liberal here, so don't think I am defending our capitalistic society as being the best idea for the indentured servant masses...

...but...

If salary is based on profit, and investment increases profit, then investment is the best move. To say that an expenditure on parks will negatively impact salary is making quite a few assumptions.

Correction: "A bad investment in the parks would negatively affect CEO salary".

A good investment would increase salary.

So what are we really looking at? Risk. There is a risk with investment. Shoot, with most investments. Will doing X at the park increase $?

So why will the CEO not take certain risks? Well, we can take educated (semi-educated) guesses as to why or why not, but ultimately 'why' is when X is deemed unlikely to increase $.

And this whole shebang goes back to the laws of Supply and Demand. Iger can make changes that affect either, or both. That is really all he can do. We do the rest!

Whatever happens to the parks, if they are packed, from a business standpoint success has been achieved. You say Hollywood studios is disgraceful, but the law of supply and demand dictate otherwise.

So whatever idea you have for Disney, lets call it Y, plug it in to the equation....

If Disney implements Y....

Supply increases, Demand increases = Ultra Win for Disney. This is the current model. Jammed parks, willingness to pay lots for tickets, maximized profits. The only thing that will change this is if demand goes down. In other words, when people are sick of the cattle car experience enough to stop going. But so long as people keep going...Iger is right.

Supply decreases, Demand increases = Could result in more crowded parks if profit were not the motive (from a sq ft perspective). Would likely simply manifest as increased ticket prices (thus driving down demand). This is the solution I proposed. Reduce by half the number allowed into the park at a time and double the ticket price. However, it is not that simple, you would have to double everything. Food, lodging, etc. Alas, this would likely cause demand to drop below equilibrium which is a bad business move. Great for us, bad for Iger.

Supply increases, Demand decreases = Bad management in most cases. With high markup items this can work for a little while. Price plummets.

Supply decreases, demand decreases = Usually happens right before bankruptcy. An organization can balance on equilibrium and steadily ride the quantity sold curve down to zero.

Sorry for the long boring details. Reading these threads I cannot control the urge to do a quick business 101 lesson.

 

[Brer Panther]

With three rides closed and no new ones opening in the forseeable future, I'm predicting some pretty long lines for the park's other rides...

 

[JordanNite]

Got to love the Fantasyland expansion - the sole thing Iger has done for Disney. That galioth of an attraction - Minetrain, a true worldclass attraction. Will have them flocking the world over to ride it.

Of course Fantasyland was not about land space to get more people into the park. It was a world class attraction that tops even Harry Potter.

Credit Iger for the one attraction he bought to Disney in his tenure. Forget about the attractions he knocked down, the cheap attractions he set up, and the more shops he set up.

The man clearly loves the parks.

 

[danlb_2000]

Got to love the Fantasyland expansion - the sole thing Iger has done for Disney. That galioth of an attraction - Minetrain, a true worldclass attraction. Will have them flocking the world over to ride it.

Of course Fantasyland was not about land space to get more people into the park. It was a world class attraction that tops even Harry Potter.

Credit Iger for the one attraction he bought to Disney in his tenure. Forget about the attractions he knocked down, the cheap attractions he set up, and the more shops he set up.

The man clearly loves the parks.

Carsland?

 

[LAKid53]

e

I bet Iger is waiting to see if the films deliver. I think the first film will be a huge hit - it's a no-brainer - because the original cast will be in it. The follow-up films, however...I think that's a crap shoot. I think Star Wars is more of a nostalgic thing than a vibrant franchise...but we'll see.

And anyway, look what's being done with Frozen - a huge worldwide hit and cultural phenomenon - and all Iger's done with it is do some quick, mostly-tacky makeovers of existing attractions. You're right, he IS a disgrace. All he gives a darn about is the stockholders - the people Walt cared least about. He's the Darth Vader to Walt's Obi-wan Kenobi.

Please read Captain America's post. Because THAT is how a CEO operates, if he wants to continue to be CEO. Keep the BOD & major shareholders (many of whom sit on BODs) happy. While we may not like his decisions, as a publicly traded company, his job is to keep shareholders happy, i.e., increase their wealth by insuring the company continues to make a profit so the value of their stock increases and they get quarterly dividends. Because that is how he is rewarded - in compensation and keeping his job. And how Wall Street rewards the corporation.

Why do people buy stock? Altruistic reasons? Some. But you invest in the market to do what? Make. Money.

It's B-School 101.

And I bet Walt made decisions based upon what would continue to make TWDC profitable. If he didn't, Roy was there to advise him to do so. Need to take the rose colored glasses off. Walt may have been a great visionary, but he was also a businessman.

 

[LAKid53]

Now I am a pretty big liberal here, so don't think I am defending our capitalistic society as being the best idea for the indentured servant masses...

...but...

If salary is based on profit, and investment increases profit, then investment is the best move. To say that an expenditure on parks will negatively impact salary is making quite a few assumptions.

Correction: "A bad investment in the parks would negatively affect CEO salary".

A good investment would increase salary.

So what are we really looking at? Risk. There is a risk with investment. Shoot, with most investments. Will doing X at the park increase $?

So why will the CEO not take certain risks? Well, we can take educated (semi-educated) guesses as to why or why not, but ultimately 'why' is when X is deemed unlikely to increase $.

And this whole shebang goes back to the laws of Supply and Demand. Iger can make changes that affect either, or both. That is really all he can do. We do the rest!

Whatever happens to the parks, if they are packed, from a business standpoint success has been achieved. You say Hollywood studios is disgraceful, but the law of supply and demand dictate otherwise.

So whatever idea you have for Disney, lets call it Y, plug it in to the equation....

If Disney implements Y....

Supply increases, Demand increases = Ultra Win for Disney. This is the current model. Jammed parks, willingness to pay lots for tickets, maximized profits. The only thing that will change this is if demand goes down. In other words, when people are sick of the cattle car experience enough to stop going. But so long as people keep going...Iger is right.

Supply decreases, Demand increases = Could result in more crowded parks if profit were not the motive (from a sq ft perspective). Would likely simply manifest as increased ticket prices (thus driving down demand). This is the solution I proposed. Reduce by half the number allowed into the park at a time and double the ticket price. However, it is not that simple, you would have to double everything. Food, lodging, etc. Alas, this would likely cause demand to drop below equilibrium which is a bad business move. Great for us, bad for Iger.

Supply increases, Demand decreases = Bad management in most cases. With high markup items this can work for a little while. Price plummets.

Supply decreases, demand decreases = Usually happens right before bankruptcy. An organization can balance on equilibrium and steadily ride the quantity sold curve down to zero.

Sorry for the long boring details. Reading these threads I cannot control the urge to do a quick business 101 lesson.

The former CEOs of several companies (cannot remember off the top of my head, but I believe one of them was CEO at Home Depot) RAN the companies into the ground, got paid and then canned by the BOD and walked away with a nice compensation package. However, that was before 2007 and I doubt after the Great Recession BODs would be willing to tolerate a CEO running a company in that manner because those shareholders with controlling interests not on the BOD would damn well make sure those directors would lose their seat.

Sorry for the long boring details. Reading these threads I cannot control the urge to do a quick business 101 lesson.

You and me both. I firmly believe they need to teach Finance 101 in high school - both an understanding of how markets work and a corporation is financially managed and even more important, personal finance 101. A lesson in the time value of money and compounding interest is critical.

 

[JordanNite]

Is anyone really happy with what happening at the parks ?!

Look at DHS - it's down to the bare bones. Hell, we argued for more attractions, but instead they've taken attractions away and added nothing !!! Nearly a 150 minute queue for Toy Story attraction there !

It's crazy how anyone can actually sit there and say that's a good thing.

Why not even keep those attractions running ?! The rate at which Disney and this regime work, even if they planned something now, it would take a good 4-5 years for them to finish anything.

 

[Master Yoda]

That hasn't been true for a while. I don't want to get into a 50 page discussion about how these people get paid but it comes down to goals that can't be missed. All paid for with stock options which in theory are coming straight from the stock holders who in theory are the owners of the business etc. etc. but most people don't understand how it all works so.........

Disneys' stock price can take a huge hit and the CEO along with other high level management will still get paid a bunch of money. In that league they are all very rich, the money is just a way to keep score.

Google
Discovery CEO David Zaslav's Pay Soars to $156 Million in 2014.

That will give you an idea of what's going on but basically this guy is getting a bunch of money no matter what happens just as long as the company doesn't go BK. If he gets fired he wins. if the stock does nothing he wins. There isn't a no win situation for him but for stock holders there are many.

It still does not answer the the question. What should a CEO's pay be based off of?

 

[LAKid53]

It still does not answer the the question. What should a CEO's pay be based off of?

In reality, whatever he can negotiate with the BOD. Which will be based on past performance (of the prospective CEO, not the company he's being hired for) and what the prospective CEO lays out as goals for the company, measured in terms of profit, increased market share, expansion into new markets, etc. These guys (and when I mean guys, it's a general, not gender specific, term) all know each other. CEOs and BODs are basically like the old European monarchies - inbred.

 

[CaptainAmerica]

That hasn't been true for a while. I don't want to get into a 50 page discussion about how these people get paid but it comes down to goals that can't be missed. All paid for with stock options which in theory are coming straight from the stock holders who in theory are the owners of the business etc. etc. but most people don't understand how it all works so.........

Disneys' stock price can take a huge hit and the CEO along with other high level management will still get paid a bunch of money. In that league they are all very rich, the money is just a way to keep score.

Google
Discovery CEO David Zaslav's Pay Soars to $156 Million in 2014.

That will give you an idea of what's going on but basically this guy is getting a bunch of money no matter what happens just as long as the company doesn't go BK. If he gets fired he wins. if the stock does nothing he wins. There isn't a no win situation for him but for stock holders there are many.

You need to read up on stock options. Stock options are worthless if market price falls below strike price.

 

[LAKid53]

That hasn't been true for a while. I don't want to get into a 50 page discussion about how these people get paid but it comes down to goals that can't be missed. All paid for with stock options which in theory are coming straight from the stock holders who in theory are the owners of the business etc. etc. but most people don't understand how it all works so.........

Disneys' stock price can take a huge hit and the CEO along with other high level management will still get paid a bunch of money. In that league they are all very rich, the money is just a way to keep score.

Google
Discovery CEO David Zaslav's Pay Soars to $156 Million in 2014.

That will give you an idea of what's going on but basically this guy is getting a bunch of money no matter what happens just as long as the company doesn't go BK. If he gets fired he wins. if the stock does nothing he wins. There isn't a no win situation for him but for stock holders there are many.

While I agree with some of your points, I do take exception with your assertion that CEOs are paid with stock options. While a CEO's contract will include the payment of bonuses primarily through stock options, they are paid in COLD HARD CASH. Otherwise, why bother taking a job as a CEO of a major Fortune 500 firm if your compensation is in stock options? Which usually have some type of restriction so the CEO won't exercise his/her option all at once and potentially cause the price of the stock to decline.

Stock holders ARE owners of the firm. It's just that unless you have a major position (at least 10%-15%), you don't really have much of a voice. I would say the majority of Americans who own stock own it through a mutual fund, rather than purchasing directly themselves through the exchange. Stocks are typically sold in round lots (group of 100 shares). In fact, the largest investors/owners are typically institutional investors, i.e., pension funds and such. I do own some stock, not through a mutual fund. I get correspondence regarding meetings, asking for my proxy, etc. However, my ownership % compared to the # of shares issued in total is miniscule.

Oh, and if Disney's stock takes a huge hit (which you didn't define what you meant by huge - 10%,15%, 20% decline or more), there is a definite possibility that the BOD could fire the CEO. It has happened. Yes, is CEO compensation out of align with how profitable, i.e., what is the share price, a company is. Most definitely in many cases. But as long as CEO performance is primarily measured by Wall Street, i.e., stock prices, this will always be the case. Want changes? Then support regulation like Dodd-Frank. And the reimplementation of Glass-Steagall.

 

[CaptainAmerica]

While I agree with some of your points, I do take exception with your assertion that CEOs are paid with stock options. While a CEO's contract will include the payment of bonuses primarily through stock options, they are paid in COLD HARD CASH. Otherwise, why bother taking a job as a CEO of a major Fortune 500 firm if your compensation is in stock options? Which usually have some type of restriction so the CEO won't exercise his/her option all at once and potentially cause the price of the stock to decline.

Iger's base compensation is something like 10% of his total package.

Yes, is CEO compensation out of align with how profitable, i.e., what is the share price, a company is.

Profitability is NOT a proxy for share price. Not even close. See Amazon for a perfect example.

Most definitely in many cases. But as long as CEO performance is primarily measured by Wall Street, i.e., stock prices, this will always be the case.

Propose an alternative. This evil "Wall Street" you talk about is mom and pop's pension and 401(k). You absolutely want Iger to maximize "Wall Street" success because that maximizes mom and pop's pension and 401(k).

Then support regulation like Dodd-Frank. And the reimplementation of Glass-Steagall.

Lol those are banking regulations smarty pants. They have absolutely nothing to do with Disney other than the fact that they'd cause financing rates to skyrocket, it would cost more for Disney to borrow to fund expansion projects, and they'd become even more gun shy about building.

ETA: This thread has been like steroids for my "ignore" list.

 

[LAKid53]

Iger's base compensation is something like 10% of his total package.


Profitability is NOT a proxy for share price. Not even close. See Amazon for a perfect example.


Propose an alternative. This evil "Wall Street" you talk about is mom and pop's pension and 401(k). You absolutely want Iger to maximize "Wall Street" success because that maximizes mom and pop's pension and 401(k).


Lol those are banking regulations smarty pants. They have absolutely nothing to do with Disney other than the fact that they'd cause financing rates to skyrocket, it would cost more for Disney to borrow to fund expansion projects, and they'd become even more gun shy about building.

Yes, I know Glass-Steagall and Dodd-Frank are banking regulations. What I said is support regulation LIKE them. And I disagree that Dodd-Frank or Glass-Steagall would cause interest rates to skyrocket. Interest rates will increase when the Fed decides that the economy is strong enough and they start to see signs of inflation beyond their comfort zone.

I never said Wall Street was evil (go back and read my post), I just said that what Wall Street thinks about a company's performance as measured in stock prices now has more of an influence on how a CEO is measured by his/her BOD. Rather than other, more rational measures of a company's performance and health. And yes, Amazon is a good example. How long did it take for Amazon to become profitable? Years. And most companies would have tanked. But Amazon is the exception. Remember, I'm not the one that considers Iger "evil". I believe that was the OP. I'm just trying to answer the question "on what should a CEO's compensation be based?" And I mention several things - stock price, market share, etc.

Since I'm now retired, I damn well want my pension fund to maximize its earnings in order to remain solvent.

I'm trying to refute most of the OP's arguments since he seems to think that Iger's tenure at TWDC has been detrimental to the well being of the company. Which can be refuted by the most visible measure, stock price.