ford91exploder
Resident Curmudgeon
No it's not - It's a sign of a timid management who is not investing in the future, With the exception of Marvel DIS is letting their IP rot on the vine.
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No it's not - It's a sign of a timid management who is not investing in the future, With the exception of Marvel DIS is letting their IP rot on the vine.
ParentsOf4
Well-Known Member
The following was the exchange at the FY12Q4 earnings call:
Question:
Just a couple of question in regard to CapEx. You guys have mentioned that you expect it to ramp down in '13. Just in sizing that, should we attach some capital expenses to these enhancement projects in the incremental costs and investments that you've articulated for next year? And then also, you mentioned this being the peak CapEx year; but looking ahead with the Shanghai consolidation, should we be expecting re-acceleration back up to these peak levels during that time?
Answer:
Yes. I'm happy to answer that. So, let me just set the table. So we said that 2012 would be our peak CapEx year for some time to come. And that we would be ramping down significantly in parks capital thereafter, while Shanghai was ramping up. So let me talk to that.
If you look on the domestic side, we're probably -- domestic park side -- we're probably down, will be down at the end of fiscal '13 about $1 billion from where we were in fiscal '12, in terms of capital expenditures. A lot of the capital expenditure that is behind what Bob talked about as guest enhancing technologies is behind us.
On a consolidated basis, though, it's only going to look like a $500 million decrease. And, in fact, the difference has to do with investment in Shanghai Disneyland. But remember, as only 43% owners of that project, we only spend 43% of the capital. So 57% of the capital spent on Shanghai Disneyland will make its way back to us in a financing line. So, if you look at it that way, even on a consolidated basis, we're going to be down about $800 million for the year.
If you look on the domestic side, we're probably -- domestic park side -- we're probably down, will be down at the end of fiscal '13 about $1 billion from where we were in fiscal '12, in terms of capital expenditures. A lot of the capital expenditure that is behind what Bob talked about as guest enhancing technologies is behind us.
On a consolidated basis, though, it's only going to look like a $500 million decrease. And, in fact, the difference has to do with investment in Shanghai Disneyland. But remember, as only 43% owners of that project, we only spend 43% of the capital. So 57% of the capital spent on Shanghai Disneyland will make its way back to us in a financing line. So, if you look at it that way, even on a consolidated basis, we're going to be down about $800 million for the year.
As I've written before, if it were up to Wall Street, the only thing ever built at WDW would be more stores, more restaurants, and more DVC.
GoofGoof
Premium Member
They have spent a lot more than some money on P&R. Most not in Florida, but still money spent. New cruise ships, DCA 2.0, FLE, Avatar, half of a whole new park in Shanghai. This is all money spent on P&R outside of just maintenance.
They did say they were cutting back on capital spend after the year that DCA opened, but they are still spending. We may not like what they choose to spend the money on.
Cesar R M
Well-Known Member
I thik the cause is.. "It plays like a summer michael bay movie with zero plot but lots of mindless action"
The characters like Bay's Transformers.. are a huge draw, regardless on how awful the movie is.
Everyone that I trust said the movie is TERRIBAD.
Only die hard "TMNT" fans or young teens-kids in TMNT groups are praising the movie.
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ford91exploder
Resident Curmudgeon
You are correct that we may not not LIKE what Disney is doing with CAPEX.
That being said In relative terms P&R capex is under 9/11 levels and P&R ROI is now running 8-10% lower than the Eisner years. As a stockholder I'm not liking what I'm seeing with DIS yes short term the stock price is high but I don't see them investing in the business for the long haul and that also means letting IP rot on the vine StarWars is the most glaring example.
It's a hugely popular IP and Disney is letting it rot and actively alienating the fans. I'm a Star Trek guy but my DBIL is a huge Star Wars fan (501'st et al) and he is frustrated with the lack of NEW stuff (Merch,Books,Games etc) a movie in 2 years is just not getting it done for the SW fans.
The Muppets are another example of mis-used IP.
Mike S
Well-Known Member
I wonder how long and how much it took them to fix this up (picture taken in 2012).
CinematicFusion
Well-Known Member
Buybacks into a company shows faith in that company's ability in the future. It is usually seen as a postive.
It can be deemed negative if margins are slowing and a company buys back the stock to keep its price at a certain point. A stock split can also be seen as a negative.
In the case of Apple, I would be concerned...not bearish but concerned. What is their next driving force to propel that stock higher? Ipad growth has slowed...the new Iphone 6?
How are they letting Pixar Rot?
Last time I checked Star Wars reboot was running on schedule and seems to be in very good hands.
Their own animation departments is churning out hits with Tangled, Wreck it Ralph, and some pic called Frozen.
Disney's Big Hero 6 looks like it's going to be good...
What are they letting Rot? Mickey Mouse? The came out with a very cool short called (click for links)
Mickey Mouse - Get A Horse (Frozen Short)
PaperMan another very cool short by Disney Animation
ford91exploder
Resident Curmudgeon
If it was fixed a lot, If not more every day
ford91exploder
Resident Curmudgeon
Buybacks are done
1) to increase the stock price by reducing dilution
2) When a company has no more profitable use of cash
3) to increase the value of insiders stock holdings (Cynical view)
Back in the pre-casino days the buyback money used to be distributed back to the shareholders as a DIVIDEND so they directly benefited from the company's success
Mike S
Well-Known Member
It has been fixed since I took that picture almost 2 years ago. Guess it was done during the big refurb in 2013 that seems to have fixed everything.
GoofGoof
Premium Member
I agree that they are not investing like they did in the Eisner years when they built 2 new gates at WDW in addition to 20,000+ hotel rooms, DCA, and Euro Disney. I agree that there is room for more investment and it would probably be a smart move to invest some more in the future of P&R. The pace of investment is less frantic and more calculated and deliberately slow. I'm not trying to defend Iger. I just found it odd that he was openly admitting in public interviews that P&R was a non-growth segment. Whenever I hear him talk about P&R he is usually gushing about how many great things they are investing in. By buying back stock you are signaling to the market that you don't have anything better to invest in, but I just never expected Iger to be that candid and openly admit that they consider P&R to be mature and a non-growth segment. Disney stock is definitely priced based on expected growth. That's putting all of your eggs in the studio basket to continue that growth.
I think Iger has done pretty well extracting value from Pixar and Marvel. Nobody is gonna argue that they aren't making enough Marvel films (some may argue they make too many). I think with Star Wars they plan on 6 new films coming out pretty much every year starting in 2015 with the new trilogy and then 3 spinoff movies. If you ask me that's about as much as the market can handle. Any more would be overkill (6 films may be overkill). I agree they haven't done much to integrate those new brands into the parks (other than Pixar). I'm kinda surprised there isn't a more heavy Marvel presence in Disney parks outside of FL. Lack of Star Wars in the parks is baffling, frustrating and just plain stupid. The pace of additions is maddening in general, especially when it comes to SW.
danv3
Well-Known Member
CinematicFusion
Well-Known Member
Are you selling your Disney Stock? Sounds like you think the company is going nowhere. How long have you thought this? Hope it hasn't been since 2009. You have missed one heck of a run.
ford91exploder
Resident Curmudgeon
No reasonable person expects DIS to build a new E-ticket EVERY year, But investing to the level of a new C-Ticket for every park every year as an ADDITION and a E-Ticket every 4-5 or so year would probably satisfy 95% percent of us and would keep the parks FRESH.
Returning the lost atmospheric elements (entertainment, shade benches) and improving food service would go a long way. When your signature hotel runs out of snacks by 6PM and managers are afraid to order more you have a real problem with cost control gone wild.
Returning the lost atmospheric elements (entertainment, shade benches) and improving food service would go a long way. When your signature hotel runs out of snacks by 6PM and managers are afraid to order more you have a real problem with cost control gone wild.
ford91exploder
Resident Curmudgeon
You are correct it has been a GREAT run from 2009, But 2013 onwards I'm not so sure the run will continue and I think Disney is vulnerable to a bear raid on their stock because all their RECENT growth has been due to price increases on their product they have seen no organic growth. Price increases are not a sustainable business model as eventually you price yourself out of markets.
I think this would be a brilliant decision ...with one hesitation.
As others have pointed out, the original Toontown has been gutted by Disney's lawyers. And face it, Roger Rabbit was irrelevant even when TT opened in the mid 90s.
Putting SW there would be a no-brainer for crowd dispersion and would cause little visual intrusion from neighboring lands.
But the pink elephant in the room is Star Tours.
I can imagine Disney being cheap and leaving ST in Tomorrowland. But not having the "Star Wars ride" in "Star Wars Land" would be the ultimate in corporate ineptness.
On the other hand, it just doesn't seem financially feasible to move it. That would blow a big percentage of any SW Land budget. Although ST's cabins could probably be relocated much easier than some other attractions, it would be far from as easy and cheap as moving AK's Lion King show.
And if Disney did move ST, what will they put in that prime real estate off the hub? DL's TL is already hurting. Removing another attraction from there while pouring money into SW Land doesn't seem promising for the future of TL.
GoofGoof
Premium Member
A stock buyback and a dividend achieve the same goal, returning capital to shareholders. There is a different tax implication for a shareholder. Stock buybacks were historically considered to be used as a one time or infrequent way to return capital. They are very trendy right now. Dividends are supposed to be more of a constant return. You have to be certain you will have the cash flow to continue to pay the dividend and eventually grow it. Reducing your dividend is not going to be received well.
When you are being judged on things like earnings per share reducing the number of shares increases your EPS even if earnings stay constant. Paying a bigger dividend will increase the dividend yield, but doesn't have an impact on EPS. Different investors have different goals.
PhotoDave219
Well-Known Member
Did you mean to start a massive, three page argument on whether or not Roger Rabbit was irrelevant?
Or did you mean to say Far more relevant to today's audiences than Oswald ever could be?
ford91exploder
Resident Curmudgeon
My personal view is Iger and his team want to transform Disney to an IP holding company where they no longer need to compete on the creative front and everything becomes management instead of leadership.
As an example look how they were unprepared for the success of Frozen a creative company would have immediately capitalized on that and taken risks. Instead you had a response which took months which tells me the Finance guys hired consultants and did 'focus groups' and 'market studies'
Right now if you are a fan of Mad Men, Disney desperately needs a Don Draper but he will need a Pryce to keep the numbers in line.
CinematicFusion
Well-Known Member
Price increases aren't the only thing driving the stock. The movie business has been the driving force behind the run. They make a few mistakes in a row..or Star Wars doesn't hit numbers along with a slow down in the economy and the price drops. it's high right now, no doubt about that.