GoofGoof
Premium Member
Amen. I never heard of a company where a division is offered major capital and declines. It's usually several divisions fighting over their sized piece of the pie. Everyone wants more not less.
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Amen. I never heard of a company where a division is offered major capital and declines. It's usually several divisions fighting over their sized piece of the pie. Everyone wants more not less.
Lee
Adventurer
Institutional investors want a number. That's all. They care far less what it's going for.
As an example...
Say they decide to do both Avatar and Carsland. They want Avatar on under $400mil. Say another $400mil for Carsland. That's $800mil, spent over about three years. $200mil per year for capital investment at WDW isn't a huge pill to swallow.
That said, if I were to guess, I can see Carsland jumping to the front of the line while the whole Avatar mess gets sorted out. Purely a guess.
As an example...
Say they decide to do both Avatar and Carsland. They want Avatar on under $400mil. Say another $400mil for Carsland. That's $800mil, spent over about three years. $200mil per year for capital investment at WDW isn't a huge pill to swallow.
That said, if I were to guess, I can see Carsland jumping to the front of the line while the whole Avatar mess gets sorted out. Purely a guess.
GoofGoof
Premium Member
You are missing my point. There are no hard numbers yet. Nothing has been approved. They could green light Carsland, Indy, Monsters Inc and Muppet Studios for DHS tomorrow and the interview with the CFO would not be a lie. He was speaking on approved projects only. Do you think some analyst got upset when they announced the Marvel acquisition or the Pixar acquisition because they were not told the year before that these projects might happen? When things get green lit and formally announced they will update their capital budget and let analysts know what the new spend will be. Nobody will be upset
doctornick
Well-Known Member
You keep repeating this, but are not offereing any support for your claims. Igor stated that they would be reducing the amount of money spend in parks and recreationg -- which, as been repeatedly stated, Disney can do while still funding two big projects like Pandora and DHS Carsland plus a DL E-ticket (and Shanghai). They've been spending billions in recent years, so scaling back from that doesn't mean "no money".
Pandora/Carsland/whatever else they might do will probably cost something like $1 billion (give or take $100M). Spread that out over ~4 years and you are basically talking about $250-300M a year. Considering the cost of the two cruise ships/Aulani/DCA/FLE, that's still consistent with what Igor had told investors.
Pixiedustmaker
Well-Known Member
Carsland doesn't really need to be "pitched". The company already built one, they know, more or less, what would be involved in building another. They've all lived with the project since 2007 when it was announced to the public. No doubt, at some point they might ask a cubicle drone to do a "feasibility study", which is a rather dry number crunching of building Carsland at DHS, which we all pretty much know would be $600 million and three years.
Similarly, data from Carsland will provide information regarding profitability. No need to pitch a theoretical as the top brass are getting all the info anyways. IMHO, the decision to dump Avatarland for Carsland has not been made, and if it was, it would be made at the top level.
Pixiedustmaker
Well-Known Member
I have offered support. From an article from September 20, 2012, regarding statements Jay Rasulo made about a week prior this date. I also read the attached pdf file. I'll repost it below as you missed this part of the conversation.
There's an article on the Hollywood Reporter where Jay Rasulo is quoted as saying,
""The next project of size in Florida will be Avatarland in Disney's Animal Kingdom."
and he also said,
""We will see a significant drop in capital expenditures in 2013," the CFO said. "Of course, Shanghai is ramping up for its opening in 2015. So on a consolidated basis you'll start to see new capital spending show up in our capex line for Shanghai Disneyland, and remember, that project is roughly $4.3 billion, of which we are investing 43 percent and the Chinese government 57 percent.""
And in the transcript, he seems to nix big projects like DCA 2.0 after Avatarland,
"You know, Avatar is coming for Walt Disney World. That is something that we feel like we absorb in our normal ongoing capital expenditure profile. That is going to come on in 2015, 2016 and we will be investing against it. But we are not going to go back in the foreseeable future to what we saw in 2011 and 2012. Nowhere near that."
Avatarland is still crawling along, and the big project is Shanghai. From a financial viewpoint, they'd probably want to wait until a year after Avatarland theoretically opens (to see how this land is received), before they start making big plans for Carsland. Meaning, that nobody is even close to thinking about building Carsland at DHS.
http://www.hollywoodreporter.com/ne...-shares-cars-land-california-adventure-372420
lazyboy97o
Well-Known Member
Where is the head smashing a brick wall emoticon when it is needed? There is a difference between just Avatarland and several billion dollar projects. Iger never said spending would stop, just that it would be less than the past few years.
Pixiedustmaker
Well-Known Member
Well, some analysts are concerned about Disney's spending, given the number of high capex projects recently completed, and in the pipeline.
Marvel, to be clear, wasn't just a long term investment (like Carsland), but an acquisition of a profitable/popular collection of properties. If Disney doesn't like what Marvel is doing for them, they could sell it, as opposed to 12-acre lot with half a Carsland. A lot of people thought the deal was good from day one, and they've been proven right. Similarly, the Pixar deal came after Disney had made tons of money distributing PIxar films, not a big shock to the system as it solved the problem of the expiration of Pixar and Disney's prior deal.
Building a Carsland, in addition to Avatarland and Shanghai, could worry some analysts/institutionals who would forsee a longer, and less certain, return on investment. So, yes, people could get upset if they see too much construction—even construction of attractions/lands that would be popular as it would take a while for the company to earn back a profit on the investment.
Look at what happened with Disneyland Paris and all of the negatives that happened to the stateside parks after that.
Goofyernmost
Well-Known Member
About what?
Californian Elitist
Well-Known Member
About the part I quoted you on.
Disneykidder
Well-Known Member
Avatarland? I have no interest in this. My hubby and older son, yes. My two youngest, no. I think Carsland would or should be pushed to the front of the line. I think it is popular with kids and adults. 2020 as an opening date? It seems too far away from now. 8 years is a long time. They should start soon and have it done so interest isn't lost. Just my two cents.
Pixiedustmaker
Well-Known Member
Disney is going to spend a lot between now and 2015/6:
Avatarland to open in 2015/6: $500 million, ?
Shanghai Disneyland to open in 2015/6: 1.85 Billion (The 43% of Disney's investment.)
Grand Total: $2.35 billion dolars between now and 2015/6 when this stuff will (supposedly) open. (And I didn't add the perhaps $1 billion just for upkeep and upgrades at currently operated parks and attractions).
So, you want another $600 million for Carsland at DHS?
While Disney is waiting for the $2 billion or more for cruises (forgot the number) and $1.1 Billion for DCA to make a return on the investment?
Goofyernmost
Well-Known Member
The part about WDW being the main money maker or the part about it deserving a little love or both?
GoofGoof
Premium Member
Per your own post: Avatar is something they can absorb in their normal ongoing capital expenditure profile. Meaning it's not large enough to make any extra plans to borrow money for it. Carsland would be a similar sized project. Combined they would cost at most $1 billion. If spread over a period of 5 or 6 years they could both be done. Since Avatar seems to be on hold (both the movies and the section of AK) it would make sense to me to move forward with DHS first (with a proven product that you already built once) and spend the extra time to finalize the Avatarland plans.
Californian Elitist
Well-Known Member
The deserving comment. I think I misunderstood your comment. I thought you were saying WDW deserves all the money given from the company, but now I don't think you're saying that. Sowwy!
Goofyernmost
Well-Known Member
The deserving comment. I think I misunderstood your comment. I thought you were saying WDW deserves all the money given from the company, but now I don't think you're saying that. Sowwy!
No problem...Nothing to see here folks...move along.
menamechris
Well-Known Member
The cruise ships have already paid for themselves, I believe. The cruise line is simply making cold hard cash at this point.
That being said - if you think TWDC can't stomach a few hundred million dollars (and no, it would not total to as much as DCA's), for the millions it will make a year in merchandise indefinetly.....well...
flynnibus
Premium Member
If they think they can build avatar within their ormal planned spending.. a project initially announced at $500 million.. don't you think they could build CarsLand.. a project that cost less than that.. within their normal spending as well?
I wouldn't say he would be lying if they build CarsLand.. he is sharing their forward looking plans. Plans can change, and if they can do it within their normal operating windows, there isn't any new capital drain they would be warning investors about. Every one of those discussions starts with disclaimers about forward looking statements...
GoofGoof
Premium Member
I don't see too many concerned analysts. I follow the stock pretty closely and most have raised their price targets and seem pretty happy with the projects already complete and those in the pipeline. Stock is soaring.