News Walt Disney Company plans to spend $17 billion at Walt Disney World over the next ten years

[GoofGoof]

This was probably 90% of the decision, not much reason to spend a billion dollars creating a couple thousand new desks when you now have several thousand sitting empty in CA.

The other 10% is likely some combination of rising costs in FL, the feud, and employee feedback. It‘s ultimately a financial decision though, if it still made financial sense on paper the feud and feedback wouldn’t be a factor.

I agree, but I think it’s also more nuanced than just a financial decision. The layoffs are short term and the company probably knows in the long term they will need more desks and will ramp up hiring. The financial benefit is to save some upfront cash flow but will actually cost them more long term.

The strong opposition to move the creative jobs to FL is probably a bigger factor than you assume. If I was putting percentages on it I’d say 50/50. Disney said that Iger taking back over was a factor too. I think he was less of a fan of moving those creative jobs. I also believe the current conflict with the Governor made that much worse. So I think that if the company really wanted those jobs in FL they would still likely move forward. There is no way they are going to move forward with a plan that they don’t really want anymore and also isn’t needed for short term cost savings. If one or the other was true they’d have a decision to make, but since both are negative it was an easy call.

I still think that if the state sweetened the pot instead of pushing open conflict there could have been a path forward. Maybe the project would have been delayed for short term cash savings but not cancelled. So while the other factors play a big part the Governor didn’t help the cause either. He basically watched the jobs walk out the door.

 

[maui2k7]

Some ideas that would be nice to see Disney spend some of that $17 Billion on...

EPCOT
1) Create a good version Imagination with Figment (I know the original will not come back, but was so much better)
2) Do something with Wonders of Life (sitting empty for decades is so sad)
3) Mission space has to go - not a draw and still makes people sick.
4) Test Track needs a total overhaul. It is 25 years old and breaks down more than any other ride (I think)
5) Add a new country to Epcot
6) Add attractions/rides to UK, Japan and Germany

Magic Kingdom
1) Beyond Thunder Mountain - build the Villains section at least!
2) Can something creative be done with the space occupied by the Treehouse? Seems like a waste of space...
3) Buzz Lightyear sure can use an overhaul to new technology
4) Update the last scene of Carousel of Progress to actually be futuristic

Hollywood Studios
1) Get rid of animation courtyard. How about adding in something Incredibles/Pixar themed in that area?
2) Demolish the Galactic Star Cruiser building and expand Galaxy's Edge to go to a familiar location - such as Tattooine!
3) Re-theme Galaxy Edge to the Original Trilogy or Prequels. Or at a minimum add the legacy characters somehow.

Animal Kingdom
1) AK is in desperate need of dark rides and people eaters.. There are so many IP related ideas they should be able to use in AK.
2) Dinoland needs a serious overhaul.
3) Kali River Rapids is such a lame theme and way too short. Should be longer, more thrilling and have a much better story.
4) Fix the Yeti!

Will any of this actually happen? If 10% off this list was done in the next 10 years I would be surprised...

 

[Disstevefan1]

I agree. This will be nothing more than a speed bump for Disney and for the state of FL. Long term the company and the state will continue to work well together.

 

[GoofGoof]

Some ideas that would be nice to see Disney spend some of that $17 Billion on...

EPCOT
1) Create a good version Imagination with Figment (I know the original will not come back, but was so much better)
2) Do something with Wonders of Life (sitting empty for decades is so sad)
3) Mission space has to go - not a draw and still makes people sick.
4) Test Track needs a total overhaul. It is 25 years old and breaks down more than any other ride (I think)
5) Add a new country to Epcot
6) Add attractions/rides to UK, Japan and Germany

Magic Kingdom
1) Beyond Thunder Mountain - build the Villains section at least!
2) Can something creative be done with the space occupied by the Treehouse? Seems like a waste of space...
3) Buzz Lightyear sure can use an overhaul to new technology
4) Update the last scene of Carousel of Progress to actually be futuristic

Hollywood Studios
1) Get rid of animation courtyard. How about adding in something Incredibles/Pixar themed in that area?
2) Demolish the Galactic Star Cruiser building and expand Galaxy's Edge to go to a familiar location - such as Tattooine!
3) Re-theme Galaxy Edge to the Original Trilogy or Prequels. Or at a minimum add the legacy characters somehow.

Animal Kingdom
1) AK is in desperate need of dark rides and people eaters.. There are so many IP related ideas they should be able to use in AK.
2) Dinoland needs a serious overhaul.
3) Kali River Rapids is such a lame theme and way too short. Should be longer, more thrilling and have a much better story.
4) Fix the Yeti!

Will any of this actually happen? If 10% off this list was done in the next 10 years I would be surprised...

I would optimistically say that certainly not all of that will happen but I think a lot more than 10%.

• I think for MK 1 and 4. Not sure what 1 is, but that’s the area in question to expand. Along with maybe a Tiana Restaurant that could maybe be part of a mini New Orleans Square. I think MK may get the most money of the 4 main parks.
• For AK 2 is seeming likely with the Moana and Zootopia rumors. I think they need something else allocated to AK as well. Another significant ride or new land. I think AK gets 2nd most money.
• For EPCOT I think 2 and 5. The play Pavilion died but that could be revived or something else there. I also think/hope a new country. Maybe Brazil or Spain or India. I’d love to see imagination get some love but who knows. EPCOT gets 3rd most money.
• For DHS I do think something either in Animation Courtyard or Echo Lake. Indy is always on the list to go. RnRC gets a new band too. They could change up SW but I don’t see an expansion in this decade. DHS gets the least.

The rest goes to DVC resorts and maybe some transportation upgrades.

 

[mkt]

The feud will be short lived. DeSantis will either move on to higher office in less that 2 years or will be term ineligible to run again in 3 years. Disney as we can see, plans for the long term. If Desantis is still Gov in 2 years, I can see Disney's lobbyist start to curry favor with the favorites to replace him. Too bad Iger will not be around to celebrate the wicked witch is dead.

My concern is with DeSantis's replacement and the legislature.

What DeSantis did wasn't an executive order than can easily be undone - it's legislation. And there's no guarantee that any successor will be friendly.

 

[GoofGoof]

My concern is with DeSantis's replacement and the legislature.

What DeSantis did wasn't an executive order than can easily be undone - it's legislation. And there's no guarantee that any successor will be friendly.

It can change pretty quickly with a few properly spent donations and some above average lobbying. Nobody watching this unfold can honestly say what is happening is good for the state of FL or the people who live there. We already saw the legislature push back on tolls and also push back on the state taking over ride inspections. It may be a start. The legislation could eventually be overturned by the courts. If not a future Governor could at least replace the sham board with a legitimate one that is interested in doing their actual job.

Disney wants to continue doing business as usual in FL. They want to keep growing WDW and keep entertaining guests and keep their CMs employed. I think long term the Government will also go back to wanting that too. The majority of voters say the economy is their #1 issue. Tourism is the #1 industry in FL and Disney is the top catalyst of that industry. Disney success = FL economic success.

 

[MagicHappens1971]

2) Demolish the Galactic Star Cruiser building and expand Galaxy's Edge to go to a familiar location - such as Tattooine!

Just throwing this out here, the Galactic Starcruiser building is not close enough to the park to have any bearing on expansion space, unless they were going for a MASSIVE expansion that requires redoing parking lots & BOH facilities.

 

[MisterPenguin]

Just throwing this out here, the Galactic Starcruiser building is not close enough to the park to have any bearing on expansion space, unless they were going for a MASSIVE expansion that requires redoing parking lots & BOH facilities.

If they expand SWL, then can *include* the starcruiser. It can finally be the sit-down dining venue.

With 100 private bathrooms.

 

[Bender123]

DIS stock price 11/18/22 $91.80 (when Iger took over)
DIS stock price 5/22/23 $91.82

Where is the free fall? Seems flat to me.

I doubt cancelling the project has much to do with the stock price. Moving the jobs from CA to FL was always being done to cut costs. The billion dollar price tag was offset by $600M of tax credits they won’t get now so the net P&L impact was only going to be about $400M spread over 30+ years of depreciation. It was going to be much cheaper to build that campus (with the tax credits) and pay lower wages long term in FL than find office space in CA and pay higher wages. The company has started layoffs in CA so they have open office space in CA now to keep the jobs there. That’s the real financial incentive. There may be a point in the future where the company runs out of space again in CA but there’s no guarantee they will revisit a move to FL.

The other piece is that the workers didn’t want to relocate. Had the state of FL been working with Disney instead of opposing them they may have still been able to move forward with that project. The state should have been encouraging the company to add those jobs instead of doing the opposite.

Your stock take cuts out a lot...

Mid 2021 it was over $200.

Nine months ago it was $122

Just in February it was $110

A month ago it closed over $100

What you are seeing is the market realizing Iger doesnt have a grand plan for the company and all the gains his return earned are gone. As of this morning its down $2 from even your point. Disney is not in a good investment spot...not at all. Any good will Iger got at his return are gone and he has nothing to show for it beyond a massive layoff that didnt impress investers beyond a a few days and $1 Billion write off on a hotel.

 

[GoofGoof]

Your stock take cuts out a lot...

Mid 2021 it was over $200.

Nine months ago it was $122

Just in February it was $110

A month ago it closed over $100

What you are seeing is the market realizing Iger doesnt have a grand plan for the company and all the gains his return earned are gone. As of this morning its down $2 from even your point. Disney is not in a good investment spot...not at all. Any good will Iger got at his return are gone and he has nothing to show for it beyond a massive layoff that didnt impress investers beyond a a few days and $1 Billion write off on a hotel.

Companies don’t make long term strategic decisions based on 1 day stock decreases. The stock being down $2 from yesterday is irrelevant to the long term outlook. The cancellation of that project did nothing to move the stock price either way. $1B depreciated over 30 years is $33M a year. The $570M in tax credits over 20 years is $29M a year. So the net P&L impact of that project would have been $4M a year of extra expense for the first 20 years. That’s literally a rounding error for a company the size of TWDC. The stock price isn’t going to react to cancelling a project when it only saves $4M a year.

At the same time the big news was the streaming business losses were down to $660M this quarter so annualized $2.6B. That’s the driver of the stock drops. A year ago they had projected Disney+ would have positive earnings by 2024 and that looks very unlikely at this point. Nothing the parks segment does is going to matter until they figure out the issues with streaming.

From the remarks Josh D’Amaro gave the accelerated depreciation from the Star Cruiser will be $100-$150M so I’m not sure where the $1B number is coming from. Even Disney couldn‘t figure out a way to spend a billion on a 100 room hotel.

 

[bcoachable]

@Sirwalterraleigh is it time to “buy”, yet??

 

[Sirwalterraleigh]

@Sirwalterraleigh is it time to “buy”, yet??

Dvc? Hell no

DIS? Haven’t been paying attention…

 

[bcoachable]

Dvc? Hell no

DIS? Haven’t been paying attention…

No chance we would ever “invest” in DVC. DIS, however… I’ll pull the trigger when you say in your best Rafiki voice:
“It Is Time”

 

[Sirwalterraleigh]

Ouch…

No…not time to buy…remember they are sinking mostly on their own merits…not the market

And about 50 kooks in Congress look to be ready to sink it because they’re not bright.

Let it ride

If they sink into the $70s…there will be calls for iger’s dismissal. Little boy blue

And it would be a vindication of every Disney fan out there…whether they know it or not. Someday they will.

 

[GimpYancIent]

Ok! If B.I. needs to move on what does the bench look like? How deep is the potential CEO roster? Don't want another "Bob", no offense to all the Bob's out there but if a refresh needs to happen start with name change and give someone else a chance.

 

[Sirwalterraleigh]

Ok! If B.I. needs to move on what does the bench look like? How deep is the potential CEO roster? Don't want another "Bob", no offense to all the Bob's out there but if a refresh needs to happen start with name change and give someone else a chance.

Funny how we haven’t heard a damn thing about that?

If true, would have to name a successor in the next few months.

I think it was a lie from the start. Let’s watch it play

 

[Sirwalterraleigh]

Your stock take cuts out a lot...

Mid 2021 it was over $200.

Nine months ago it was $122

Just in February it was $110

A month ago it closed over $100

What you are seeing is the market realizing Iger doesnt have a grand plan for the company and all the gains his return earned are gone. As of this morning its down $2 from even your point. Disney is not in a good investment spot...not at all. Any good will Iger got at his return are gone and he has nothing to show for it beyond a massive layoff that didnt impress investers beyond a a few days and $1 Billion write off on a hotel.

1. Those numbers were “speculation”…not actual product reality.
2. Iger is shot.

 

[Disstevefan1]

Funny how we haven’t heard a damn thing about that?

If true, would have to name a success in the next few months.

I think it was a lie from the start. Let’s watch it play

He is having a hard time finding someone as great as he thinks he is.

 

[Tha Realest]

Funny how we haven’t heard a damn thing about that?

If true, would have to name a success in the next few months.

I think it was a lie from the start. Let’s watch it play

My feeling‘s always been the next CEO, if internal, would come from the theatrical side. Dana Walden seems to be playing the game better than most. But, we’ll see how well the theatrical slate performs this year. Iger certainly hasn’t anointed anyone fully or implicitly.

 

[Sirwalterraleigh]

My feeling‘s always been the next CEO, if internal, would come from the theatrical side. Dana Walden seems to be playing the game better than most. But, we’ll see how well the theatrical slate performs this year. Iger certainly hasn’t anointed anyone fully or implicitly.

She checks the boxes…

They really need two. The creative rot after 20 years of a non-creative at the top shows where it goes.

They need a tandem. Best years we’re with a tandem.