UO to Become a Disney Park??

[ksdave]

From Reuters:

{LOS ANGELES, Aug 7 (Reuters) - Walt Disney Co. (DIS) Chief Financial Officer Tom Staggs on Wednesday said the media giant would consider scooping up any assets of debt-riddled rival Vivendi Universal that are within Disney's core businesses.

"Any assets that are in our core business that come available, we would certainly take a look at," Staggs told Reuters when asked whether Disney might consider acquiring any Vivendi businesses.

"Our primary focus is our core business. That we can augment it and do acquisitions that aren't dilutive to earnings or cash flow," Disney might be interested, he added.

The two companies are close rivals in the entertainment arena. Burbank, California-based Disney owns theme parks like Walt Disney World near Orlando, Florida, and Disneyland in southern California, south of Los Angeles.

Disney owns its movie studio and the ABC broadcast network, ESPN and the Disney Channel cable TV networks. It also has an interest in other cable networks like A&E Television Networks and E! Entertainment Television.

Vivendi Universal's media crown jewels include Universal Studios film and TV production company, cable TV network USA and the world's No. 1 record company Universal Music Group.

It owns the Universal Studios and theme parks in Florida near Walt Disney World and in Los Angeles. Staggs did not rule out the possibility of taking on one or both of those parks either.

Vivendi Universal was formed from the merger of sleepy French water utility Vivendi with Canadian drinks company Seagram Co. Ltd, which owned Universal.

But that acquisition engineered by former CEO Jean-Marie Messier, along with several others in publishing and media, left Vivendi Universal saddled with $19 billion in new debt.

Late last year, investors began to grow concerned with Vivendi's ability to make its debt payments, and those worries led to a roughly 70 percent drop in Vivendi's stock through July of this year.

In early July, Vivendi Universal's board ousted Messier and installed French pharmaceutical executive Jean-Rene Fortou at the company's helm with the mandate to shore up short term finances and sell assets in order to pay down debt.

Vivendi shares closed down 2.5 percent at 15.07 euros in Paris on Wednesday, near a 52-week low of 13.20 euros set last month and well off a year high of 64.40 euros set in January.

Disney shares ended down 3.3 percent at $13.90 on the New York Stock Exchange on Wednesday, after earlier falling to an almost 8-year low of $13.75.}


So, what do you think? What would USF and IOA be like if the mouse bought them?

 

[WebmasterBarry]

My reply?

When hell freezes over...

I'd really like to hear what Earl thinks.

 

[treesinger]

As interesting a thought as that is, I think WDW would probably be delighted to watch UO whither on the vine.

 

[DEE DEE]

How is this possible that Disney could aquire UO when they are 15 billion in debt and they are slowly ruining everything they touch.Their rides are years out of date and they have not put anything new on the Disney Channel in years.They could not produce a ride like Spiderman if they tried and they will not try with cost cutting gone rampant. This must be a malfuntion of my computer to see this about Disney tonight. Please say this is not so!!!!Sorry to go on and on but I can not stand thinking about Disney ruining Jurassic Park or anything else. I am ready to cry really big tears now.Boo Hoo,Boo Hoo

 

[patman]

Universal is not withering on the vine it is bringing new rides up.
Disney would be the worst thing to happen to universal. The only thing I could say good about it is that they may Universal runitself like Touchstone/Pixar.

 

[Cris]

Originally posted by patman
Universal is not withering on the vine it is bringing new rides up.
Disney would be the worst thing to happen to universal. The only thing I could say good about it is that they may Universal runitself like Touchstone/Pixar.

he wasn't saying that UO was withering away..he just stated that Disney would love to see that.

 

[treesinger]

How is this possible that Disney could aquire UO when they are 15 billion in debt and they are slowly ruining everything they touch

The article from the OP says that UNIVERSAL (not WDW) is 19 billion in debt. Where did you get the figure of Disney being 15 billion in debt? Just wondering. If Disney id truly that deep in it themselves, they shouldn't even THINK about an acquisition like that.

he wasn't saying that UO was withering away..he just stated that Disney would love to see that

First, thank you Cris for coming to the defense! I really wasn't saying that US was whithering.
But now that I look at it, maybe they are. They have all these new, great rides, much more for thrill seekers, HRH, etc., but they got it all from DEFICIT SPENDING! Being innovative is admirable, but you have to have a profit margin that can maintain the monstrous growth. At 19 BILLION (!!!!) in debt, maybe US really is pretty close to the brink.

 

[robvia]

It's Vivendi that is 19 billion in debt, not the theme parks. I've never seen profit/loss figures for the parks alone, they always talk about Vivendi as an entire company, so who knows how IOA is doing or how much debt a new buyer would have to take.
I would hate to see Disney or Six Flags buy them. Eisner has a big ego and only puts in family rides. Six Flags, ugh, that's a nightmare. They're also in debt, so I'm sure they're out of the running. Anheuser Busch, yes.

 

[EUROPA]

Originally posted by treesinger

But now that I look at it, maybe they are. They have all these new, great rides, much more for thrill seekers, HRH, etc., but they got it all from DEFICIT SPENDING! Being innovative is admirable, but you have to have a profit margin that can maintain the monstrous growth. At 19 BILLION (!!!!) in debt, maybe US really is pretty close to the brink.

The theme park side of Universal is making money they are not losing it. Universal has gained attendance over the last 2 years while Disney has lost.

Disney current debt is around 13-14billion according to their last Quarters Earnings.

Disney and Universal both suffer from the same problem, huge portions of their companies dragging the other portions down. In Disney’s case it the Studios,ABC and the failed GO.com Internet porthole. They also have been buying some pretty stupid stuff lately…Fox Family.

 

[kellymonaghan]

I have two (totally uninformed) observations:

1) The theme parks are not REALLY Disney core businesses. The Universal production and USA Networks are closer to being 9in Disney's "core" business.

2) Owning USF/IOA would expose Disney to regulation and taxation by Orlando. I think Disney has gotten too used to operating in what is essentially its own independent country, answerable to no one.

I'm still betting on Barry. (That's Diller, not Hom.)

 

[treesinger]

The theme parks are not REALLY Disney core businesses. The Universal production and USA Networks are closer to being 9in Disney's "core" business.

I have to disagree with you even though you are somewhat correct. If Disney wants to become what it was ages ago, they NEED to focus on family, imagination, animation and customer service. Theme parks, I believe were expressions of their primary focus. This WAS their core business. Profit is now Disney's core business. Movies, networks, ubiquitous merchandising are the means to that end.
So, yeah, USA and Universal Production are definitely the core business now. If they finally get a successor to Eisner who backs away from profit as prime motivator, Disney might not even WANT US/IOA.

 

[rangebob]

What I find really hard to believe but I might be wrong. How can a company that is possibly looking at getting rid of the theme parks be still interested in installing a possibility of 3 different new attractions. I wouldn't think that they would put out the money and then get rid of them. I know that Earl has said that it will happen and when Earl tells us something it normally happens.

I just really find some of the rumors hard to believe. The rumor that I am trying to talk about is the one that Vivendi is trying to get rid of the parks.

 

[kellymonaghan]

Robert, I think the issue is that Vivendi's new management finds itself in a serious financial bind and to lower its debt it may have to sell some assets.

Vivendi is a French company with roots in the water business and a lot of people over there were none too happy with Messier turning the company into an American-style media conglomerate. The French attitude toward American popular culture is, shall we say, dismissive.

It's not Universal itself that wants to be sold, it's the owners in France who are considering selling it no matter what the Universal folks think. At least that's how I see the situation.

 

[Earl]

My response is in another thread. That's not exactly what I said. See the other thread for the details, but what I said is that it will more than likely happen, just not at the hands of the mouse.

 

[Kungaloosh1937]

Originally posted by Robert Walker
What I find really hard to believe but I might be wrong. How can a company that is possibly looking at getting rid of the theme parks be still interested in installing a possibility of 3 different new attractions. I wouldn't think that they would put out the money and then get rid of them. I know that Earl has said that it will happen and when Earl tells us something it normally happens.

I just really find some of the rumors hard to believe. The rumor that I am trying to talk about is the one that Vivendi is trying to get rid of the parks.

Vivendi WILL get rid of Universal- there's not really a question about that. They're trying to reduce their debt and get back to their own core business, which was the utility company they used to be.

The Universal theme parks are extremely profitable- however, Vivendi really has no plans to keep them and dump the rest of Universal. It's all gonna go. Universal Recreation would be the bigwisg to approve new attractions for UO, which is just like a smaller company under Vivendi Universal- and being that its coming from their budget- and they ARE very much profitable, they've been OK'd.

Now as to whether or not Disney will attempt to buy the company... truthfuly, I doubt it. They'd have to get it really cheap to appease stockholders. Having a complete Orlando theme park monopoly would be HORRIBLE for us though, becuase when there's no competition, there's no innovation or new attractions.

 

[treesinger]

Having a complete Orlando theme park monopoly would be HORRIBLE for us though, becuase when there's no competition, there's no innovation or new attractions.

Hold on!! Wasn't Disney pretty much the only (big) game in town for many, many years? Didn't they continue to build and flourish?

I don't like the idea of Disney buying USF, but to say that this would halt Disney's level of innovation, I think is misguided. Eisner can take that blame pretty squarely on his shoulders. The competition only exposed just how much ground Disney had lost.