Spirited News and Observations and Opinions ...

[Lee]

By the way, when did spending capital to make more money become such a horrible thing in our capitalist economic system?

Here's the thing...
It isn't what they're spending...it's what they're spending it on that most folks take issue with.
Lots better ways to spend that kind if money right now.

 

[Figments Friend]

The big problem with the stock industry being the driving factor in a business' operation is that stockholders generally don't care about the long-term health of a company.They only care about short-term profits. The face that they drive companies into unsustainable business models is not a concern of theirs.

All too true....

 

[Figments Friend]

How about that NextGen?!?!

( laughs )

 

[ParentsOf4]

Since everyone is discussing investors, I always get a kick out of this quote from the 1984 (yes, 1984) Disney annual report:

Indeed, a major question in analysts' minds was why Disney had chosen to grow the theme-park segment as aggressively as it had. The initial cost estimate of Disney World/EPCOT Center had been $600 million; six years later, the cost had risen to $1.9 billion. One analyst commented, "The increment to the theme parks' operating earnings from Disney's ... investment probably did not exceed $80 million before taxes. After charging itself with taxes, Disney is left with about $45 million. That represents less than a 4 percent return on EPCOT. If Disney had invested in Treasury Bills it could have done better."

If TWDC had adapted the mentality investors wanted them to follow, today's WDW would consist of MK, DTD, and a bunch of DVCs.

 

[stlphil]

Here's the thing...
It isn't what they're spending...it's what they're spending it on that most folks take issue with.
Lots better ways to spend that kind if money right now.

I agree with this 100%. I guess I wasn't very clear in my comment. I was referring to Wall Street (and the downward pressure they always put on DIS capital spending, particularly at P&R) and not to Disney itself.

Actually I think the Street is way more likely to "get" high-tech infrastructure and data-mining than it is to "get" rides, so NextGen gets a pass.

 

[Darth Sidious]

Since everyone is discussing investors, I always get a kick out of this quote from the 1984 (yes, 1984) Disney annual report:

If TWDC had adapted the mentality investors wanted them to follow, today's WDW would consist of MK, DTD, and a bunch of DVCs.

Yeah because that statement follows Time Value Money... Which is theory. Sometimes you have to do things that involve great risk for great return. Now what is funny is in that quote... TVM is used as the logic behind why the move was stupid. The thing is because it is a theory... If I alter the formula components to whatever their internal numbers are... It would also justify the move. Guess who was right... The internal guys looking long term. There lies the problem... You can justify anything in finance. However someone always loses... Someone always wins. It's like making a deal with Rumplestiltskin... See I found a way for it to relate to MAGIC.

 

[Darth Sidious]

I've read analyst reports about Disney on occasion. Maybe I'm over generalizing, but they mostly view Disney as just a media company, probably because media-savvy analysts are assigned to cover DIS. They don't get the theme parks at all other than noting that P&R is more capital-intensive than the other divisions, making them doubly dubious about the parks.

By the way, when did spending capital to make more money become such a horrible thing in our capitalist economic system?

I never said it wasn't... In fact you can't make money without risking it first. The EPCOT investment is a good example of that. $DIS is a conglomerate entertainment company. They delve into things beyond media.

 

[Lil Fort]

Somehow I missed this last night.
Wonderful post.
It's like grabbing a thread and pulling it, following the logical progression of ideas.

Doesn't matter so much to me if the tech can do exactly what we envision as the worst case scenario, but more so what the underlying goal is.

The guest-friendly parts of NextGen are purely the by-product. No guest ever asked for NextGen. Guests want newer/ better attractions and better maintenance.
Disney wants more money from guests (understandable for a business) and rather than plus the parks to get it, they want to use mined data to get it. That's my main complaint. Nothing about NextGen appeals to me. Nothing. I want the newer/better/improved attractions, not a pre-booked Fastpass. No thanks.

As for the privacy concerns, we'll have to wait and see how it plays out. Too much is unknown for most people to really take a hardcore stand on either side right now.

I will say this, though...there are enough worrisome aspects to warrant taking a very close and skeptical look at the whole program.

Anyone working too hard to defend it at this point...well, there's an old quote about "The lady doth protest too much." And it doesn't have to be a lady.

Thanks @Lee!

I agree that no guest ever asked for this... well maybe the die hard planners would have, but not the average guest and I doubt that anyone was ever asked. Interestingly enough, when I was at MK last fall I was approached to take a survey when walking past City Hall, and I agreed. Not one question came even close to asking if I would be interested in pre-booking a FP or making reservations with my phone, and if I had been asked, my answer would have been a resounding "NO!" This program is definitely not something that they are doing to improve the guest experience, although it is being marketed as such.

I was reading a thread started by @Goofyernmost today (http://forums.wdwmagic.com/threads/disney-wake-the-hell-up.858480/) and one of the things that he said in his original post comparing his visits to WDW and Universal that struck me was, "Disney, to me, has the feel of a store that is in the process of going out of business." All financial discussion aside, as it is something that I am not well versed in, the direction that Disney has taken lately does seem like the actions of a company that no longer feels that they are able to grow their client base. I could definitely see a company in this position trying to increase revenue by increasing prices as much as the market will handle without adding any value, and by manipulating their guests into using Next Gen so they can cut staffing costs and increase add-on sales. All of this is going on at Disney while Universal is actively investing in new attractions and growing their client base.

I'm sure that this will take a long time to play out and that unfortunately I think we will be stuck with Next Gen in some flavor or another for the long term. After all, once Disney has their cash cow in place, there won't be a reason to remove the program unless there are legal issues or an even better moneymaking scheme comes along.

Now if Universal would just add a campground, it wouldn't be difficult to decide where I would be taking my next vacation...

 

[stlphil]

I never said it wasn't... In fact you can't make money without risking it first. The EPCOT investment is a good example of that. $DIS is a conglomerate entertainment company. They delve into things beyond media.

I see that I doubly wasn't clear. My comment wasn't directed at you, or at Disney (see my response to Lee), it was aimed at the Street. Sorry about that.

I also see that I was wrong in another way as well. Based on ParentsOf4's quote from 1984, I see that this attitude from the analysts is nothing new.

 

[Darth Sidious]

I see that I doubly wasn't clear. My comment wasn't directed at you, or at Disney (see my response to Lee), it was aimed at the Street. Sorry about that.

I also see that I was wrong in another way as well. Based on ParentsOf4's quote from 1984, I see that this attitude from the analysts is nothing new.

Name of the game my friend. Thing is... This is our competition in life... Use it to your advantage.

 

[Mouse Detective]

DCL is considering expanding again. Just one ship this time, likely. I do wonder how that fits with porting all four ships in Florida in 2014, and all doing VERY, VERY, VERY tired itineraries.

Unfortunately, cruise ships in the short 3 &4-day weekend cruise market currently have to stick with Nassau and a private island because everything else is too far away. But let me share a secret with you: Cuba

Sometime before the current Obama presidency ends, Cuba will become accessible by cruise lines and it fits perfectly into 3 & 4-day cruise itineraries. In fact, it will the ideal way to see Cuba's cities due to initial lack of infrastructure. There is a huge pent up demand for visiting Cuba and the cruise lines are gearing up for it now.

 

[artvandelay]

That is another HUGE concern of Disney. Many DVCers don't have buyers remorse (plenty do, but that's another story). They love their resorts and enjoy vacationing there. But an alarming number have decided to visit WDW as a resort and never set foot in its theme parks or maybe do so for 1-2-3 days of a 10-day or longer vacation. There's a reason why Disney offered PAPs for $399 (or less than what they charge for renewals of regular Charter APs like mine ... meaning my 31 years of loyalty means nothing, but that also is another story) this fall. I predict that number will only grow. And unlike hotel rentals, DVC is largely paid upfront (even if you pay it out, I believe, you do like a car loan, not a mortgage). So having the Burkes from Wakefield, MA visiting Saratoga Springs in a Grand Villa for 10 nights in February means absolutely nothing if they just use it as a vacation home and go to the Space Center and their APs for UNI/IOA and visit the beaches ... maybe try Discovery Cove.

DVC member who did this last year. Discovery Cove is amazing, and upgraded to get unlimited 2 week access to Sea World, Aquatica and Busch Gardens Tampa. I can't remember the cost, but it was below the cost of a 7 day park hopper. Spent only one day in MK (had free passes).

 

[artvandelay]

Unfortunately, cruise ships in the short 3 &4-day weekend cruise market currently have to stick with Nassau and a private island because everything else is too far away. But let me share a secret with you: Cuba

Sometime before the current Obama presidency ends, Cuba will become accessible by cruise lines and it fits perfectly into 3 & 4-day cruise itineraries. In fact, it will the ideal way to see Cuba's cities due to initial lack of infrastructure. There is a huge pent up demand for visiting Cuba and the cruise lines are gearing up for it now.

Could this new ship be slotted for NYC? NCL's newest ship (the Breakaway) is making NYC it's home port with 7 night Bermuda and 7 night FL/Bahamas and 12 night Southern Caribbean. DCL could follow the same trips and cash in on the no fly northeast cruise business.

 

[MattM]

You're right... That's why I don't wish to play the finance game despite my degree being in it. I much rather work in corporate finance. I won't discuss my personal feelings on the market but through PM I will LOL. People here don't wanna hear me.

I hear you. I see the market as a necessary evil. You can make money there...a lot of money. But some people let their emotions get too involved when investing, particularly $DIS investors. I always love at annual meetings people line up to ask Iger "when is Disney World going to get "X" ride?" or any other P&R related questions when P&R are only one of $DIS divisions (and Im all, hey thanks for the ride into the low 50's plus the dividend boost!). I always laugh, but maybe its not that funny I guess.

 

[ULPO46]

I've read analyst reports about Disney on occasion. Maybe I'm over generalizing, but they mostly view Disney as just a media company, probably because media-savvy analysts are assigned to cover DIS. They don't get the theme parks at all other than noting that P&R is more capital-intensive than the other divisions, making them doubly dubious about the parks.

By the way, when did spending capital to make more money become such a horrible thing in our capitalist economic system?

You sort of don't see the picture. Disneys market value currently sits at 80 billion dollars. Did you just not hear that Disney bought out lucasfilm and marvel. The parks are only a small percentage of disneys profits sure they are the symbol of the company but how did Disney get its start. It's been a media driven company since its start. It's made movies and television shows for as long as the big five have been in business. Parks is a fraction a whole separate entity the actual company focuses more on getting cartoon and family movies rolling out.

 

[WDW1974]

They're gonna have a rookie QB (Georgie K.) & see signs of hope while still finishing second in their division?

I would call George many things (and have). A rookie wouldn't be one. He'll be 60 next year. He's been an exec for decades with the company, mostly Orlando-based.

 

[Darth Sidious]

You sort of don't see the picture. Disneys market value currently sits at 80 billion dollars. Did you just not hear that Disney bought out lucasfilm and marvel. The parks are only a small percentage of disneys profits sure they are the symbol of the company but how did Disney get its start. It's been a media driven company since its start. It's made movies and television shows for as long as the big five have been in business. Parks is a fraction a whole separate entity the actual company focuses more on getting cartoon and family movies rolling out.

Parks & Resorts is the second largest segment of TWDC after Media. They are both by far larger than the other segments. I think P&R is $13B and Media is $19B... P&R matters... A lot.

 

[WDW1974]

A majority of $DIS investors don't even know what NEXTGEN is. They just see capital expenditures in the P&R Division and assume that it must be bettering the product. Many of $DIS individual investors' are fanbois who just want to own a piece of the company (read: the parks) and know very little about whats going on from an actual business perspective.

Most investors only care about the price of a share today versus what they paid for it. ... Most fanbois who buy a share have no interest in the company beyond whatever aspect they have a strong pull to whether it's the parks, animation, ESPN etc.

But your overall point is so on target. Most investors of all stripes certainly don't know/care about most of what said company is actually doing. I'd be an exception to that.

 

[ULPO46]

Parks & Resorts is the second largest segment of TWDC after Media. They are both by far larger than the other segments. I think P&R is $13B and Media is $19B... P&R matters... A lot.

Agreed. Was just letting this guy know why it's considered media.

 

[Darth Sidious]

Most investors only care about the price of a share today versus what they paid for it. ... Most fanbois who buy a share have no interest in the company beyond whatever aspect they have a strong pull to whether it's the parks, animation, ESPN etc.

But your overall point is so on target. Most investors of all stripes certainly don't know/care about most of what said company is actually doing. I'd be an exception to that.

I think that's true but still... Those people aren't the sharks that really make/drive market prices. But, I'm sure you know that.