Why is construction still happening at Universal, but not Disney?

[NickPytlinski]

Yep I agree we are delivering concrete daily to Universal but zero to Disney. RCID projects are moving along and as well as the Best Western, The Cove, the McDonalds and the Hollywood Studios film strip entrance demo.

But Tron, Guardians, GF Walkway, Epcot, ect... nothing I suspect we will see delays and even projects under construction put on hold (like the SW hotel, and reflections after the site work). Tron, Guardians, GF walkway, and Epoct work will continue since those are projects guests see up close.

yes i agree.
could disney be going for the moral highground?
the public will soon forget that once the doors are back open.

i understand if they believe they cannot do it with social distancing but other places can and disney is normal the best when they put there mind to anything.

 

[NickPytlinski]

Because. They're. Saving. Money.

short term gain.
long term fail.

 

[tirian]

short term gain.
long term fail.

Right now, it’s long-term save the company—but considering how much they’d greedily cut when things were going well, what will the parks look like after this?

 

[Dutch Inn '76]

short term gain.
long term fail.

No. They're in survival mode. Read this:

https://www.nytimes.com/2020/04/12/business/media/disney-ceo-coronavirus.html

 

[bartholomr4]

No. They're in survival mode. Read this:

https://www.nytimes.com/2020/04/12/business/media/disney-ceo-coronavirus.html

Large construction projects are “capitalized” and not ”expensed”. This means the money spent on development is spread over the life of the building, ride, hotel, etc..... Shutting down construction projects save little to no money on the expense / revenue line (the only real time expense is any interest paid on the capital), so its not likely Disney has shut down these projects to cut expense.

I believe the restart of construction projects will be one of the first things we see start back up at the parks.

 

[toolsnspools]

ESPN is one of the big moneymakers for Disney, and they might as well be Turner Classic Movies right now.

 

[plutofan15]

short term gain.
long term fail.

This is so very wrong.

 

[NickPytlinski]

This is so very wrong.

opinion

 

[NickPytlinski]

Right now, it’s long-term save the company—but considering how much they’d greedily cut when things were going well, what will the parks look like after this?

clean lol

 

[Casper Gutman]

As has been said on here a lot, Disney is in a bad way... lots of debt, very few revenue streams. Stopping construction is almost certainly the right move. Frankly, it worries me, because as much as I complain about the state of WDW, I don’t want Disney to go away or change hands.

What the current situation does highlight are Disney’s recent mistakes. They didn’t build when they could have (and should have) and now they can’t. Perhaps even worse, Disney+ should have had much more original content ready to go at launch. They pretty much had only the Mandalorian, which was fantastic, but now they’re stuck, with a captive audience and no new content.

Unis position is kind of amazing. They are on track to open an exciting new park right at the moment when travel habits may be returning to normal. They will be offering shiny new content to an audience desperate for it. Disney really needs to be planning how they are going to meet that challenge, even if the present construction shutdown is the right choice for them.

 

[seascape]

As has been said on here a lot, Disney is in a bad way... lots of debt, very few revenue streams. Stopping construction is almost certainly the right move. Frankly, it worries me, because as much as I complain about the state of WDW, I don’t want Disney to go away or change hands.

What the current situation does highlight are Disney’s recent mistakes. They didn’t build when they could have (and should have) and now they can’t. Perhaps even worse, Disney+ should have had much more original content ready to go at launch. They pretty much had only the Mandalorian, which was fantastic, but now they’re stuck, with a captive audience and no new content.

Unis position is kind of amazing. They are on track to open an exciting new park right at the moment when travel habits may be returning to normal. They will be offering shiny new content to an audience desperate for it. Disney really needs to be planning how they are going to meet that challenge, even if the present construction shutdown is the right choice for them.

Every company that depends on advertising is getting killed. Barry Dillard told CNBC this morning that their advertising expenses of 5 billlion last year will only be 1 billion this year. That is a fact 80% cut. Yes, Disney has problems but at least they still have the subscription rates from Comcast and other cable companies. They also have money coming every quarter from Universal for the Marvel rights and Simpson's. Those continue even with no attendance. Comcast also has to pay Nintendo and AT&T hut have no money coming in from their parks. The conference calls will be interesting. If the parks have to stay closed for months what happens to them because Comcast is losing all their fixed costs plus rights fees but Disney is only losing their fixed costs because they own all their IP and Comcast doesn't.

 

[CaptainAmerica]

Large construction projects are “capitalized” and not ”expensed”. This means the money spent on development is spread over the life of the building, ride, hotel, etc..... Shutting down construction projects save little to no money on the expense / revenue line (the only real time expense is any interest paid on the capital), so its not likely Disney has shut down these projects to cut expense.

Disney's primary concern right now is cash flow, not P&L.

Walt Disney Enters New $5 Billion Credit Agreement For Coronavirus Cushion, Follows $6 Billion Debt Sale Last Month

Walt Disney said Monday it's entered into a new $5 billion, one-year credit agreemeent with funds to be used for general corporate purposes.

deadline.com

 

[412]

Large construction projects are “capitalized” and not ”expensed”. This means the money spent on development is spread over the life of the building, ride, hotel, etc..... Shutting down construction projects save little to no money on the expense / revenue line (the only real time expense is any interest paid on the capital), so its not likely Disney has shut down these projects to cut expense.

I believe the restart of construction projects will be one of the first things we see start back up at the parks.

Disney's primary concern right now is cash flow, not P&L.

Walt Disney Enters New $5 Billion Credit Agreement For Coronavirus Cushion, Follows $6 Billion Debt Sale Last Month

Walt Disney said Monday it's entered into a new $5 billion, one-year credit agreemeent with funds to be used for general corporate purposes.

deadline.com

Exactly: the existential concern for Disney right now is cash flow. Regardless of whether these projects are capitalized or expensed, they require significant cash outlays. With revenue significantly down across almost all divisions and no clear end in sight, Disney is preserving cash as much as possible. That means no construction for now.

 

[marni1971]

TWDC was looking at ways to cut costs before Iger left. Fox may have made one dent too much.

And now....

 

[Magenta Panther]

TWDC was looking at ways to cut costs before Iger left. Fox may have made one dent too much.

And now....

Much as I hate to see Walt's company suffer, maybe it needed a lesson like this. You don't put a cement-headed soulless CEO like Iger - who focused on stocks, acquisitions and merchandise in lieu of quality and innovation - in charge of it. Right now, Netflix has more value than Disney - in terms of dollars. Let's hope that the bedrock of Disney - Walt's legacy - sees the company through. It'll be interesting to see how this all shakes out...

 

[CaptainAmerica]

Much as I hate to see Walt's company suffer, maybe it needed a lesson like this. You don't put a cement-headed soulless CEO like Iger - who focused on stocks, acquisitions and merchandise in lieu of quality and innovation - in charge of it. Right now, Netflix has more value than Disney - in terms of dollars. Let's hope that the bedrock of Disney - Walt's legacy - sees the company through. It'll be interesting to see how this all shakes out...

I'm sorry but this is just a silly take. Blaming Bob Iger for a once-in-a-century global pandemic that brought almost all economic activity on the planet to a standstill is just a bit of a stretch.

 

[Magenta Panther]

I'm sorry but this is just a silly take. Blaming Bob Iger for a once-in-a-century global pandemic that brought almost all economic activity on the planet to a standstill is just a bit of a stretch.

I didn't blame him for the virus. I blamed him for his spend-happy habits, poor economic choices and the debt that's left the company in dire circumstances.

 

[HauntedPirate]

I didn't blame him for the virus. I blamed him for his spend-happy habits, poor economic choices and the debt that's left the company in dire circumstances.

I'm no fan of Iger's acquisition-happy, IP-centric, shareholder-focused tenure, but even I can't pin the blame for the current situation on him. Come on, man, put the hate aside for once.

 

[Josh Hendy]

Regarding the past (and current) policies, successes, failures and blame for the current crisis, I will say this in favor of Bobbie I. He did pretty much exactly what every banker, analyst and business consultant told him to do. He went along with the Great Credit Bubble and borrowed, acquired and did stock buybacks. To da max. He was probably also advised to do as much business as possible in China and to build as many timeshares and cruise ships as possible.

The thing about a credit bubble is, it punishes prudent financial policies and rewards reckless behavior. And keeps on doing so ... until it doesn't any more.

And so, here we are.

 

[biggy H]

It doesn't matter how well run your company was or how much cash you have if you have nothing coming it you are going to struggle in the current climate regardless. Universal/comcast will be in the same situation as Disney soon if this keeps up, people will cancel their expensive tv subscriptions if they are out of a job and cannot afford to feed themselves.