Temper Your Expectations: Quote from Bob Iger

[Atomicmickey]

From the Orlando Sentinel, by way of Disney Report:

Scaling back spending

In his talk at the Sanford C. Bernstein Strategic Decisions Conference in New York, Iger told analysts that Disney’s theme-parks division is likely to pull back on capital spending in a few years.

Iger described the current capital-spending surge at Walt Disney Parks and Resorts — including the two cruise ships; the Hawaiian resort; and expansions of the Magic Kingdom in Orlando, Disney California Adventure in Anaheim, Hong Kong Disneyland and Disneyland Paris — as “mildly aberrational.”

The bulk of the spending on those projects began in 2009 and is expected to continue through 2014.

“I think, once we get through this period, we’re probably going to drop down to what I’ll call a more steady state,” Iger said. “We don’t really project — save for Disneyland Shanghai, should be we successful in completing that agreement and building the park — we don’t really project anything as significant as this collection of investments on the [capital expenditure] front over the next decade.”


http://thedailydisney.com/blog/2010/06/exec-says-disney-might-cruise-to-asia-and-hawaii/

 

[Festivus]

As long as they finish what they've started without scaling back on what's already in development...

 

[Testtrack321]

If they spend money wisely instead of billion dollar rehabs of bad parks we should be fine. Also note they stated the off site DVC resorts and the Cruise line, I imagine those will get the biggest cuts.

 

[RSoxNo1]

They are spending quite a bit of money, it's just not evenly distributed. It's probably not going to be necessary to invest $1.2 billion in California Adventure from 2013-2017. I'm not sure of the price tag of the Fantasyland Expansion (I think the number I heard is $300 million, but have no idea if that's accurate), I don't expect any expansion of that size in Walt Disney World, although I would argue that it would be necessary in the Animal Kingdom.

With significant expansion going on overseas as well, I can definitely understand this statement.

 

[wm49rs]

It sounds like someone was trying to reassure the shareholders.....

 

[Exprcoofto]

Bye bye Mr. Iger :drevil:




:lookaroun

 

[Bluewaves]

If they had did DCA right in the first place it wouldn't cost nearly as much to fix, and buying 2 new cruise ships is a big chunk of money.

Like I always say do it right the first time or spend twice as much to do it again.

 

[MysticOrient]

It sounds like someone was trying to reassure the shareholders.....

That was my thought, too.

 

[Tom]

From the Orlando Sentinel, by way of Disney Report:

Scaling back spending

In his talk at the Sanford C. Bernstein Strategic Decisions Conference in New York, Iger told analysts that Disney’s theme-parks division is likely to pull back on capital spending in a few years.

Iger described the current capital-spending surge at Walt Disney Parks and Resorts — including the two cruise ships; the Hawaiian resort; and expansions of the Magic Kingdom in Orlando, Disney California Adventure in Anaheim, Hong Kong Disneyland and Disneyland Paris — as “mildly aberrational.”

The bulk of the spending on those projects began in 2009 and is expected to continue through 2014.

“I think, once we get through this period, we’re probably going to drop down to what I’ll call a more steady state,” Iger said. “We don’t really project — save for Disneyland Shanghai, should be we successful in completing that agreement and building the park — we don’t really project anything as significant as this collection of investments on the [capital expenditure] front over the next decade.”


http://thedailydisney.com/blog/2010/06/exec-says-disney-might-cruise-to-asia-and-hawaii/

I don't hold a lot of "stock" in this statement. As someone already mentioned, his job is to appease stockholders (the same people who were almost OK with selling Disney to Comcast because they prefer money over tradition & families). He did just that.

This is also from the same guy who said they were getting rid of discounts this year. Some may argue, but with Free Dining (again), Summer Room Discounts, and the assortment of PIN codes already issued through December - 2010 is still swarming with discounts.

Also, everything is relative. It's easy to say that they won't be spending the kind of money they're spending now....because they're spending a record amount of money right now. Between FLE, Hawaii and the Cruise Ships, they're spending well over a billion dollars (if not close to 2) in just a few years (almost half a billion on FLE alone). I don't know what a boat costs, but it has lots of zeros.

They could build an E-ticket attraction in several parks each year and still look like they've "cut back" compared to the past few years. They won't be building any more ships, so DCL's expenses will be almost flatlined. They won't be adding any more lands to the MK, or any other Florida park for that matter, so major expenses come down to new rides. And like I said, they're pennies compared to the bills they're spending now.

Don't let his words scare you. It's his job.

 

[TP2000]

The 1.2 Billion dollars they are spending just in DCA, and just over a short four year period (2009-12) is the type of money they normally spend across the entire Parks division over a full decade on established theme parks. The 1.2 Billion dollar extreme makeover and expansion of DCA is unprecedented in the history of Disney theme parks, so Bob's use of the word "aberration" is quite appropriate.

Take that massive expense of the DCA extreme makeover out of the equation, plus the big ticket cost of another Billion dollars to build and outfit those two fancy new cruise ships, and obviously the expenditures will ramp down later this decade.

The Communist government in Beijing will be footing a big chunk of the cost of Shanghai Disneyland, so even that isn't as expensive as it could be for Disney later this decade.

 

[Tom]

The 1.2 Billion dollars they are spending just in DCA, and just over a short four year period (2009-12) is the type of money they normally spend across the entire Parks division over a full decade on established theme parks. The 1.2 Billion dollar extreme makeover and expansion of DCA is unprecedented in the history of Disney theme parks, so Bob's use of the word "aberration" is quite appropriate.

Take that massive expense of the DCA extreme makeover out of the equation, plus the big ticket cost of another Billion dollars to build and outfit those two fancy new cruise ships, and obviously the expenditures will ramp down later this decade.

The Communist government in Beijing will be footing a big chunk of the cost of Shanghai Disneyland, so even that isn't as expensive as it could be for Disney later this decade.

Wow. Ok. I was WAY low in my estimate. The FLE, at half a billion, is actually cheap compared to the rest of their investments.

 

[Texas84]

As a shareholder, I demand his immediate resignation.

 

[TP2000]

Wow. Ok. I was WAY low in my estimate. The FLE, at half a billion, is actually cheap compared to the rest of their investments.

I keep seeing the "300 Million Dollar" number being thrown around for FLE. But that seems a bit low to me judging by what we have seen of the plans.

I think the 500 Million Dollar figure you use is more accurate for FLE. It just has to be.

 

[Tom]

I keep seeing the "300 Million Dollar" number being thrown around for FLE. But that seems a bit low to me judging by what we have seen of the plans.

I think the 500 Million Dollar figure you use is more accurate for FLE. It just has to be.

When they first announced it, the words "half a billion" were tossed around a lot in press and on the web. Some people say they've made cuts since then, but not to the tune of hundreds of millions of dollars - so it's probably still close to a half-B.

 

[Lee]

I keep seeing the "300 Million Dollar" number being thrown around for FLE. But that seems a bit low to me judging by what we have seen of the plans.

I think the 500 Million Dollar figure you use is more accurate for FLE. It just has to be.

When they first announced it, the words "half a billion" were tossed around a lot in press and on the web. Some people say they've made cuts since then, but not to the tune of hundreds of millions of dollars - so it's probably still close to a half-B.

Nah...
The half-billion dollar version was the early concept with quite a bit more included.
The project, and budget, was scaled back after that. Last number I heard was just under $300mil. And that is if they go ahead and build Phase 2...which is kinda iffy.

Personally, considering that we are only getting some fancy landscaping, a few well-themed buildings with M&Gs, a restaurant, a relocated and expanded spinner and a D ticket omnimover who's design was piggy-backed on the DCA version....I think they would be overspending at the $300mil figure.

 

[Dinoman96]

Well, this both disappoints and depresses me. :dazzle:

 

[Tom]

Nah...
The half-billion dollar version was the early concept with quite a bit more included.
The project, and budget, was scaled back after that. Last number I heard was just under $300mil. And that is if they go ahead and build Phase 2...which is kinda iffy.

Personally, considering that we are only getting some fancy landscaping, a few well-themed buildings with M&Gs, a restaurant, a relocated and expanded spinner and a D ticket omnimover who's design was piggy-backed on the DCA version....I think they would be overspending at the $300mil figure.

You're probably right. And by "probably," I mean that I have absolutely no reason to doubt your information. Lee

 

[Oddysey]

Nah...
The half-billion dollar version was the early concept with quite a bit more included.
The project, and budget, was scaled back after that. Last number I heard was just under $300mil. And that is if they go ahead and build Phase 2...which is kinda iffy.

Personally, considering that we are only getting some fancy landscaping, a few well-themed buildings with M&Gs, a restaurant, a relocated and expanded spinner and a D ticket omnimover who's design was piggy-backed on the DCA version....I think they would be overspending at the $300mil figure.

I thought TLM was supposed to be an "E" ticket? Was that just fanboy excitement or has TLM been scaled back significantly?

 

[mp2bill]

Makes sense. They build a new park at WDW about every 10 years, and the FLE is just about the same thing (I'm assuming less expensive), and considering the AK has its shortcomings, it makes sense that they would curb their spending after the expansion.

 

[Aurora's#1Fan]

The 1.2 Billion dollars they are spending just in DCA, and just over a short four year period (2009-12) is the type of money they normally spend across the entire Parks division over a full decade on established theme parks. The 1.2 Billion dollar extreme makeover and expansion of DCA is unprecedented in the history of Disney theme parks, so Bob's use of the word "aberration" is quite appropriate.

Take that massive expense of the DCA extreme makeover out of the equation, plus the big ticket cost of another Billion dollars to build and outfit those two fancy new cruise ships, and obviously the expenditures will ramp down later this decade.

The Communist government in Beijing will be footing a big chunk of the cost of Shanghai Disneyland, so even that isn't as expensive as it could be for Disney later this decade.

Your right about the 1.2 billion but I think that is just for Phase 1. Correct me If I am wrong but if Phase 1 is a success then they have more money behind them for phase 2 as they have some attractions and other things planned for phase 2 which I hope come true