The Reason Why I Can’t Criticize Bob Chapek

[Sirwalterraleigh]

Well I think a major disadvantage would be that lack of capitalization based on stock value. So they wouldn't be able to have quick access to capital like they would if they remained public. Which is one thing we know they need especially with large capex surrounding the Parks.

Now I don't claim to be the most knowledgeable on the debt aspects of private companies who were once public. But to me that would seem to be a large burden that couldn't be handled if Disney went private, especially given their debt structure now.

That’s true…but I don’t think their need to “borrow” is as pronounced as their strategic financing would make it seem.

And this isn’t Walt looking for $5,000,000 to sink into his amusement park with $1,743 in his bank account. I think the banks might play.

 

[Disney Irish]

That’s true…but I don’t their need to “borrow” is as pronounced as their strategic financing would make it seem.

And this isn’t Walt looking for $5,000,000 to sink into his amusement park with $1,743 in his bank account. I think the banks might play.

Yes, but we all know the projects at the Parks are now in the Billions, not the Millions like in 1953. So access to that kind of capital without stock to back it up is harder and has more strings attached. So while you might have some banks that would lend that kind of capital at first, long term its a losing proposition as debt would continue to grow.

 

[Sirwalterraleigh]

Yes, but we all know the projects at the Parks are now in the Billions, not the Millions like in 1953. So access to that kind of capital without stock to back it up is harder and has more strings attached. So while you might have some banks that would lend that kind of capital at first, long term its a losing proposition as debt would continue to grow.

Yeah…bu those budgets are still the umbrella for a lot of bloat…and they usually whittle the actual cost down…quietly…after the fact.

I’ll be disclosure when I raise that capital…even though I won’t have a reason too.

 

[Disney Irish]

Yeah…bu those budgets are still the umbrella for a lot of bloat…and they usually whittle the actual cost down…quietly…after the fact.

I’ll be disclosure when I raise that capital…even though I won’t have a reason too.

Well I look forward to seeing the statements when you take it private.... Lol

 

[Sirwalterraleigh]

Well I look forward to seeing the statements when you take it private.... Lol

…oh you have no idea what’s behind those curtains…or if they match the carpet

I don’t want to be in charge or anything…just head of hotel construction/renovations and one seat on a 3 person panel that decides all park placement/renovations…

Don’t want to be paid a lot either. I’m good.

 

[Mmoore29]

Oh absolutely…no doubt.

Public companies are good for growing with needed capital…but once they are big they insist on sacrificing quality for quarterly.

And is any company less appropriate for that than Disney?

I’m currently raising capital for that bid to take it private…

I’m just about $370,000,000,000 short…give or take.

You'd have to pull off the biggest LBO in the world to do that, with all the private equity firms involved, and pouring on obnoxious debt to do it. It would be Henry Kravis' greatest dream. You'd have to end up with golden parachutes for the management and the board are bigger than Ross Johnson, Michael Ovitz and Adam Neumann's combined!

It'd be more trouble than it's worth, simply. Even a straight buyout at face value couldn't work out. Disney really does function better as a public company, because that's the only viable option.

 

[Sirwalterraleigh]

You'd have to pull off the biggest LBO in the world to do that, with all the private equity firms involved, and pouring on obnoxious debt to do it. It would be Henry Kravis' greatest dream. You'd have to end up with golden parachutes for the management and the board are bigger than Ross Johnson, Michael Ovitz and Adam Neumann's combined!

It'd be more trouble than it's worth, simply. Even a straight buyout at face value couldn't work out. Disney really does function better as a public company, because that's the only viable option.

Didn’t sniff out the sarcasm, huh?

Wisconsin or Minnesota?

By the way…I’m still on the edge of my seat waiting to hear how Iger left star wars better than he found it?

Nevermind…I see it

 

[Mmoore29]

Didn’t sniff out the sarcasm, huh?

Wisconsin or Minnesota?

By the way…I’m still on the edge of my seat waiting to hear how Iger left star wars better than he found it?

Nevermind…I see it

Well, even sarcastically, the fact is that privatization isn't remotely feasible.

Besides, giving public financials to the SEC forces Disney to be more honest about everything.

 

[Sirwalterraleigh]

Well, even sarcastically, the fact is that privatization isn't remotely feasible.

Besides, giving public financials to the SEC forces Disney to be more honest about everything.

I don’t think anyone thinks it’s going to happen. The question was “whether it should?”

As a philosophical question…it’s yes.

From a 200 level Econ class perspective? No

Much more reasonable down the road to get “merged” by a bigger fish

 

[Disney Irish]

I don’t think anyone thinks it’s going to happen. The question was “whether it should?”

As a philosophical question…it’s yes.

From a 200 level Econ class perspective? No

Much more reasonable down the road to get “merged” by a bigger fish

Not many bigger fish left that could or would try swallowing DIS.

 

[Sirwalterraleigh]

Not many bigger fish left that could or would try swallowing DIS.

Currently? Probably not.

But there are one or two tech companies that could maneuver that way overtime.

Or the next big thing…whatever that may be.

We can’t also assume that Disney will “grow” entertainment changes frequently

 

[Disney Irish]

Currently? Probably not.

But there are one or two tech companies that could maneuver that way overtime.

Or the next big thing…whatever that may be.

We can’t also assume that Disney will “grow” entertainment changes frequently

The real question is would it be worth it. Would a tech company want to swallow the whole media conglomerate that also has a theme park division?

Not likely, Viacom tried this when they acquired Paramount (who previously had acquired their Parks from Taft), who after a decade of mismanagement divested themselves from the Parks business by selling them to Cedar Fair, because "they don't match our core business". And so while not a tech company, the moral of the story is that unless the purchasing company wants to run Parks its not a likely sale. As I don't see Disney selling to anyone who wouldn't want to keep the Parks and run them.

Then again iPirates has a nice ring to it....

 

[Mmoore29]

The question was “whether it should?”

As a philosophical question…it’s yes.

Ummmmmm, no, I don't think so. If anything, the problems would be worse as a private company, and just give the board a license to loot it for their pleasure. Soon Disney would basically convert into a mixture of WeWork, Theranos, Enron, WorldCom, Lehman Brothers and RJR Nabisco. It would not be pleasant, and it would actually kill the company.

Having Disney publicly traded is the guardrail the keeps things in check.

 

[Sirwalterraleigh]

Ummmmmm, no, I don't think so. If anything, the problems would be worse as a private company, and just give the board a license to loot it for their pleasure. Soon Disney would basically convert into a mixture of WeWork, Theranos, Enron, WorldCom, Lehman Brothers and RJR Nabisco. It would not be pleasant, and it would actually kill the company.

Having Disney publicly traded is the guardrail the keeps things in check.

It’s all hypothetical…

I suggest you spend some more time watching and the benefits of private will show. Neither scenario is “perfect”

Stocks don’t increase quality. They are speculative, not performance based. At one point…it was the opposite.

It’s hard to say the interests of hedge funds and large institutional investors/trusts are served by a dedication to “higher quality”. That quality often takes more time, costs more, and carries more risk.

 

[Disney Irish]

Ummmmmm, no, I don't think so. If anything, the problems would be worse as a private company, and just give the board a license to loot it for their pleasure. Soon Disney would basically convert into a mixture of WeWork, Theranos, Enron, WorldCom, Lehman Brothers and RJR Nabisco. It would not be pleasant, and it would actually kill the company.

Having Disney publicly traded is the guardrail the keeps things in check.

Why would you automatically think that a private Disney would be raided? Besides this being just a thought experiment, that isn't a likely scenario with a company like Disney, too many eyes even when private.

The main reason why a company goes public and remains public is access to quick capital, but along with it comes a lot of regulatory red tape that a private company doesn't have to go through. So one of the major advantages to going private is to allow restructuring of the company without have to fully go through the regulatory strife that comes with being a public company.

 

[Sirwalterraleigh]

Why would you automatically think that a private Disney would be raided? Besides this being just a thought experiment, that isn't a likely scenario with a company like Disney, too many eyes even when private.

The main reason why a company goes public and remains public is access to quick capital, but along with it comes a lot of regulatory red tape that a private company doesn't have to go through. So one of the major advantages to going private is to allow restructuring of the company without have to fully go through the regulatory strife that comes with being a public company.

It’s been awhile since the 80’s…by I do recall that public companies were raided. The only “private” ones that were were in serious financial distress and picked up off the scrap heap.

If Disney were private and in trouble…something has gone totally wrong and they would be raided as a public too. So it would be moot.

Disney was actually stable in 1983/84…if anything, they were underperforming for their potential/assets. They were “green mailed”
And Roy ingeniously used it to seize control of a heap of stock and the board/management. And the rest is history.

Also…a large company going private would
Only happen if their financials were rock solid…because those buying it would be doing so with their capital…not using other peoples like in investor blocks on the public exchanges.

Disney would have to be a sure thing based on its size for anyone to sniff it.

 

[Disney Irish]

It’s been awhile since the 80’s…by I do recall that public companies were raided. The only “private” ones that were were in serious financial distress and picked up off the scrap heap.

If Disney were private and in trouble…something has gone totally wrong and they would be raided as a public too. So it would be moot.

Disney was actually stable in 1983/84…if anything, they were underperforming for their potential/assets. They were “green mailed”
And Roy ingeniously used it to seize control of a heap of stock and the board/management. And the rest is history.

Also…a large company going private would
Only happen if their financials were rock solid…because those buying it would be doing so with their capital…not using other peoples like in investor blocks on the public exchanges.

Disney would have to be a sure thing based on its size for anyone to sniff it.

Not true, companies go private for various reasons, including to restructure to prevent from going under. As an example Dell went private in 2013 because it missed its projections for almost 2 straight years due in part because of huge competition in the server market. Its financials weren't good at all. So Michael Dell partnered with an equity firm and took it private in order to restructure and refocus the company. And now they are stronger than they have been in decades, and are once again public as of the end of 2018.

 

[Sirwalterraleigh]

Not true, companies go private for various reasons, including to restructure to prevent from going under. As an example Dell went private in 2013 because it missed its projections for almost 2 straight years due in part because of huge competition in the server market. Its financials weren't good at all. So Michael Dell partnered with an equity firm and took it private in order to restructure and refocus the company. And now they are stronger than they have been in decades, and are once again public as of the end of 2018.

I’m actually agreeing with you…for Disney to go private in distress something would have to already have torpedoed the ship.

That’s not the suggestion I’m making. I’m saying I would like for it to go private to allow it to sit on cash and “break even”…

If if needs restructuring to save itself…I’m not worried about if they’ll replace JIYI anymore

 

[Disney Irish]

I’m actually agreeing with you…for Disney to go private in distress something would have to already have torpedoed the ship.

That’s not the suggesting I’m making. I’m saying I would like for it to go private to allow it to sit on cash and “break even”…

If if needs restructuring to save itself…I’m not worried about if they’ll replace JIYI anymore

Either way, I think we can come to some conclusion on this thought experiment.

Disney likely wouldn't be better off being private at this point in its history. Its better off having access to quick capital based on its stock performance. As such a business minded CEO is better to lead the company in that respect, just to bring it back around this the topic of this thread. Now we'll see what Chapek does in the next year before that contract renewal in 2023 to right the ship in the current choppy waters.

 

[Sirwalterraleigh]

Either way, I think we can come to some conclusion on this thought experiment.

Disney likely wouldn't be better off being private at this point in its history. Its better off having access to quick capital based on its stock performance. As such a business minded CEO is better to lead the company in that respect, just to bring it back around this the topic of this thread. Now we'll see what Chapek does in the next year before that contract renewal in 2023 to right the ship in the current choppy waters.

I totally disagree with the conclusion…”access to capital” isn’t their problem at all. Is a crisis Of brand recognition and poor management.

But I did enjoy the “thought exercise” nonetheless