DVC and Walt Disney Co

[tecodis]

Disney, like most companies, is feeling the ill-effects of the economic downturn. Any thoughts on the impact of this with DVC ownership?

One thought I had was what would happen to DVC ownership if The Walt Disney Co. went bankrupt? Or closed WDW?

 

[marynvince]

Has about the same chance as Disney closing WDW and going belly up. Keep asking the tough questions.

 

[Malaguti Ball Clan]

Has about the same chance as Disney closing WDW and going belly up. Keep asking the tough questions.

 

[Mickey'sApprentice]

I think we should ask: Is Disney safe from a take over bid??

As stock prices go lower, companies become bigger targets for takeovers. Everyone seems to be in the same boat this time.

What would happen if Wal-Mart took over Disney??

The themeparks would probably stay open, but it would definitely not be the same experience.

 

[tecodis]

I was thinking more in the lines of how a DVC ownership title would be impacted if the company went out of business. You would certainly still own it but what if there was no resorts to use it at (i.e. DVC was forced to stop operating).

 

[oakmanner]

I'm banking on the WDC & DVC surviving this economic downturn just fine.

 

[mearshon]

If Disney went out of business we would still have our ownership in our respective resort. Might no longer be able to go to parks but we still own portions of the resort. I would guess that if DVC went out of business then we wouldn't have to give our shares back after 50 years as long as we kept our property taxes up to date.
Just make sure that Steve Jobs stays happy since he is the single largest shareholder ! !

 

[jco_direwolf]

Well DVC is a condo association (called Disney Vacation Developments/DVD.) They shouldn't go bankrupt unless there are enough members who don't pay their MF. Our association is large enough for 5-10% of the point owners to default, I would think we would have more huge problems in the US.

The association should be taking in enough money to run without any support (although our biggest member of DVC is Disney.) But in that case DVD would be a creditor to Disney, so they should be in line to get cash if something bad happens.

Now what typically happens (from what I've read about the condos failing mostly in South FL) is the association stops getting enough cash to operate due to members not paying their fees, then the association has to pass a special assessment to make up the shortfall, which puts more people into default. Rinse Repeat...

Now this doesn't address the fact that the DVC would take a huge value hit, if there aren't any parks in Central Florida do you really think there are a lot of people who want stay on property? And if you do, there are cheaper Condos in Central Florida.

That all said, I'm not too worried right now. But this is why it's important to read the annual reports of both Disney and DVD.


johno

 

[edk35]

"What happens if the sun explodes tomorrow?


Has about the same chance as Disney closing WDW and going belly up. Keep asking the tough questions."





Now that was funny!!!!!

 

[jgus]

Having delt with bankrupt companies in business, most of the time it's just a few companies within company who file. For example, if the parks aren't doing well, Disney can bankrupt just the parks. They of course would still operate and restructure their debt. Additionally, pixar may file and have no impact on the parks. They are all seperate companies. Just like DVD, DVC, DCL, etc. It's a big spider web...

 

[Chuck S]

If WDW Resorts ceased to exist, DVD/DVC resorts would be forced to contract with another management company for upkeep, housekeeping, front desk personnel, etc. Maybe Marriott or Hilton would be interested in the DVC brand.

Overall, we would still have the right to use our home resort until the end of our contract period, they would just have new management companies. And it is possible a new company would absorb the DVC resorts into their timeshare system, giving up more travel options.

Our contracts specifically state that there is no guarantee that that the parks will remain open throughout the life of the contract, or that any other WDW associated services are guaranteed. Remember, it wasn't too long ago that we were looking looking at the rumored possibility of "Wecome To Comcast's WDW Resort."

 

[eileenkeeney]

I doubt WDW will close, however as they have to offer more and more incentives to get people to visit, hotel prices may get so cheap, that our DVC points are not worth much.

If too many of us delay vacations, and bank points, they could freeze banking for a while (their right to do this is in the contract).
We can end up with points that are hard to get rid of, that we can not afford to use either.

This scenario is more likely to occur then WDW closing.

 

[cpdwiz]

Disney, like most companies, is feeling the ill-effects of the economic downturn. Any thoughts on the impact of this with DVC ownership?

One thought I had was what would happen to DVC ownership if The Walt Disney Co. went bankrupt? Or closed WDW?

Wont happen....Read the shareholders year end report yesterday....DVC made money for Disney, and they are saying the expansion with BLT, THV and Hawaii will do even better...

Disney will never belly-up...Almost happened once, and won't again.

 

[Coach81]

Disney, like most companies, is feeling the ill-effects of the economic downturn. Any thoughts on the impact of this with DVC ownership?

One thought I had was what would happen to DVC ownership if The Walt Disney Co. went bankrupt? Or closed WDW?

Disney going bankrupt???

 

[WilsonFlyer]

Disney will never belly-up...Almost happened once, and won't again.

I'm sorry. I'm a businessman and some statements just deserve to be laughed at out loud. Consider that I'm sitting here LMAO reading that statement.

Remind me to never ask you for stock market advice.

They said Rome would never fall either. Trust me, someone will come along and screw it up eventually. Maybe next year. Maybe 50 years from now but it will crumble one day. Never forget the 11th commandment, "Thou shalt not kid thyself."

 

[CarolA]

Disney, like most companies, is feeling the ill-effects of the economic downturn. Any thoughts on the impact of this with DVC ownership?

One thought I had was what would happen to DVC ownership if The Walt Disney Co. went bankrupt? Or closed WDW?

As long as we are doing what if...

What if a giant alien spaceship lands at Disney and aliens take over the park?

Is there really a need to "borrow trouble"?

Seriously we have 14 posts on something that while it COULD happen does not appear to be a threat that should be something to worry right now.

What if we dropped dead tomorrow? Would it matter what happened to Disney?

 

[hsteacher]

Well I've been going to Disney monthly (my DD is a cast member) and each time it's crowded. I stay on DVC points sometimes but also use the cast member discount on hotels. Tough time getting hotels as they are all booked. I actually resort hopped several times this past weekend (President's Weekend and Daytona 500) but MK was jammed on Sunday -- wall to wall people -- I left at 11 am because it was so crowded.

So, from what I understand, Disney is not necessarily experiencing the growth they needed/wanted/projected due to the economy but my monthly experiences haven't seen me getting on Space Mountain anytime soon without a FastPass. Heck, last Saturday, Soaring was out of FP by noon. Every restaurant was crowded, I waited in line for QS. Will consumer behavior change in the next 6 mths (since most made the current ressies awhile ago) -- that will be seen. As for DVC -- my last trip on points this past January, I couldn't get 2 nights in a row for a studio, regular view -- I hopped to 5 different villas!!!! Now, I understand that Europe is here vacationing and that is true -- English was def the 2nd language this past weekend.

I'm back down March and April (DD gets to come home for a short visit in May) so we'll see if it's different. BTW -- International Drive was also jammed and so was DTD. We all stood there and said "what recession?" People were spending and spending and spending. The amount of food, pop/soda (ok, I'm from IL), candy, ice cream, hats, stuffed animals, and Princesses at BBB -- WOW. $$$ flying everywhere.

 

[jlewisinsyr]

Although you can never say never, Disney is still pulling a profit, and they have a lot of assets and cash reserves to ride out this financial storm.

As we are owners of the resort, Disney cannot just close our resorts, the management may change and our dues may go up to offset increasing costs/losses (thus is why Disney loves DVC because the risk is pushed to the owners and off of Disney's books).

Also, although park attendance is down slightly and spending is down slightly, Disney has many levers it can pull to reign in costs and increase attendance. People are still spending money and although the economy is bad, it's not the end of the world. There are a few (albeit very few) positive lights starting to emerge in the distance and we will pull through this financial storm in the end, possibly even surging in the future and Disney will be there just as it was before.

 

[JimC]

There are very many iconic brands that no longer exist.

And Disney is certainly an iconic brand. But their financials are strong, management is solid/creative and likely to lead for a good many years. Steve Jobs is a major shareholder (7.4% of common stock) and is an innovative genius. I would rather put my trust in Disney then the HOA where I live.

While cheap stock is a risk, the market is very dysfunctional at the moment and there are few who have the means and access to capital to buy. It would take 56 million shares to make any credible move and probably twice that to force any change. At today's price that is $980 million to be heard and twice that for a seat at the table. And then you would need to convince the large institutional investors of the wisdom of backing the insurgents over management. I really doubt that would happen.

If Disney did go out of business or if there is a change in control; then we will figure out what we can do. We are not owners in the traditional deeded TS sense. We have a transferable, deeded, limited right to use interest. So it would be an interesting problem to work. But I suspect we all have more immediate issues that are affecting our communities like home, investment and job losses.

 

[Tamplain]

Well Disney may not go under but this crisis is far from over and probably only going to continue to get worse for a long time to come. Many companies are laying off people in huge numbers not because they are really losing heavy money but to keep there stocks and bottom line looking good to stock holders.
Disney has said they will be making many cuts and letting go of quite a few people and cutting out services, etc.

What I would be more concerned about as DVC owner is if things continue to spiral down for long time what actions might Disney take or DVC take that would make ownership not worth what you are paying for it.

Disney will do what it has to in order to keep its stockholders happy and make the bottomline work in its favor.

Read an interesting article about cautioning Disney on how deep they make cuts with personnel, etc as they may never get some of these highly specialized people back again.

Disney is facing some serious times.