WDW Upkeep

[EUROPACL]

You may be right given how managment dislikes the parks.

There've been rumors that Iger's looking to break off Disney Studios and ABC. He was always a TV guy anyway. Unfortunatly, as the rumors go, the parks would be sold to the highest bidder.

Of course, even that might be OK depending on who ran the parks and who ran the Studio.

I wouldn't hold my breath though.

I was wondering if anyone else saw the writtting on the wall for the parks. Eisner tried several times to sell them off. The parks need a major reinvestment and we know they don't want to spend the money. Plus who really wants to deal with the DVC and other Hotel problems that will be coming up?

 

[Another Voice]

There's a huge issue for Disney however, the parks are the only part of the company that generates huge wads of cash.

Movies and networks are rotten businesses to base a corporation on. Success and failure is instant, the finances go up and down all the time. Network television is as "cutting edge" as the horse-drawn buggy today; movie studios are about to be hit with the same digital tidal wave that destroyed the record companies.

All the other Monster Mega Major Media Monoliths have another "core" business that exists to pump cash into the parent company and help keep things stable. Warner Brothers has a massive cable television company that eagerly collects all your monthly checks, Universal NBC is backed by General Electric. Columbia Picture and Spider-man can ask Sony for help; Paramount/CBS can look to Viacom's fingers in billboards, advertising and concert venues. And Fox has international publishing, a stranlgehold on international satellite television and the Vast Right Wing Conspiracy (smilie) to bail it out.

Disney has the parks. Hugely successful in their own right, they pump tremendous amounts of cash into the organizaiton. It cost Disney more than $300 million to make Pirates 3 - all that cash had to come from somewhere (and it wasn't from the DVD sales of Chicken Little). Nor was the $7 billion to pay-off Steve Jobs and buy Pixar found underneath in the sofa in the executive wash room.

Withouth the parks, Disney is left with a minor movie studio that's able to release one large movie a year, a troublesome animation company less than thrilled to be tied to company they all left in disgust, a television network with declining revenues and ratings that has yet to produce a powerhouse profitable series along the lines of Friends or CSI[/], a licensee group that constantly needs new characters to sell, and the bright spot - a sports network.

But showing endless reruns of cheerleader contents isn't going to pay for Pirates 4. So Disney is rather stuck right now. Management hates the theme park business. They think it's high investment, low return. They think the market is mature, that there is no more easy growth that can be squeezed out. Expanding Disney's brand outside of the parks is going to take huge amounts of cash (the same money they'd rather make movies with).

That's what Iger and fiends are working on - how do you get rid of the parks yet keep the cash flows coming in. Tokyo was the model for a while, but both Paris and Hong Kong have turned into disasters (which is why Rasulo might not be around much longer). So in the mean time Disney is going to squeeze everything they can get and put as little into them as possible.

Besides, have you heard what Tim Allen's salary demand is for Wilder Hogs?

 

[MasterShake]

There's a huge issue for Disney however, the parks are the only part of the company that generates huge wads of cash.
[/i]?

The parks can't be the only part of Disney that generates huge amounts of cash. Last year the parks and resorts worldwide made about 1.53 billion for Disney after operating costs. That's an average of 382 million a quarter. Disney has made a net profit of 723 million the first quarter and 931 million the second. That means that the parks are approximately 46% of Disney's profit. So you are half right, the parks are a huge amount of the income, but not the only major income for the company.

Withouth the parks, Disney is left with a minor movie studio that's able to release one large movie a year, a troublesome animation company less than thrilled to be tied to company they all left in disgust, a television network with declining revenues and ratings that has yet to produce a powerhouse profitable series along the lines of Friends or CSI[/], a licensee group that constantly needs new characters to sell, and the bright spot - a sports network.
?

Disney as a whole has more then one or two major movies coming out in 07. I would say all of these are major releases:

Bridge to Terabithia (2007)
Meet The Robinsons (2007)
Pirates of the Caribbean: At World's End (2007)
Ratatouille (2007)
National Treasure: The Book of Secrets (2007)

In 2005-2006 ABC had 3 of the top ten most viewed shows. Dancing With the Stars was only beaten by American Idol and its ratings were better then CSI (#4). Grey's anatomy and Desperate Housewives also made the top ten list and Lost cracked the top 20 at number 15.

That's what Iger and fiends are working on - how do you get rid of the parks yet keep the cash flows coming in. Tokyo was the model for a while, but both Paris and Hong Kong have turned into disasters (which is why Rasulo might not be around much longer).
[/i]?

While Paris and Hong Kong are not doing a great business, I think disaster is too strong a word. From what I read (and maybe I'm wrong) both are profitable, but not making nearly as much as what was hoped.

So in the mean time Disney is going to squeeze everything they can get and put as little into them as possible.
[/i]?

You keep saying this, but the numbers don't seem to back it up. Disney had 9.9 billion in revenue from the parks in 2006. After operating costs they had a net profit of 1.53 billion in 2006. That means that they spent 8.37 billion on running and improving the parks/resorts.

 

[EUROPACL]

Disney as a whole has more then one or two major movies coming out in 07. I would say all of these are major releases:

Bridge to Terabithia (2007)
Meet The Robinsons (2007)
Pirates of the Caribbean: At World's End (2007)
Ratatouille (2007)
National Treasure: The Book of Secrets (2007)

In 2005-2006 ABC had 3 of the top ten most viewed shows. Dancing With the Stars was only beaten by American Idol and its ratings were better then CSI (#4). Grey's anatomy and Desperate Housewives also made the top ten list and Lost cracked the top 20 at number 15.

Bridege To Terabithia ...bombed.
Meet The Robinsons ...bombed.
Pirates At Worlds End is rumored to be costing around 400 million which means some around 1.2 billion to make a profit. The second one was a bloated mess with too many plot lines. Lets hope the third one can clean things up.

Ratatouille is a Pixar movie and we will just have to see how well it does.

National Treasure: The Book of Secrets ....I can only assume wil be a as stupid as the first so I know for a fact that this one will make money.


I don't watch ABC and those three shows you listed are part of the reason why. I doubt that if you asked anyone if those shows you listed are the type of High Quality Entertainment that made them fall in love with Disney....I doubt they would say yes.

 

[MasterShake]

Bridege To Terabithia ...bombed.
Meet The Robinsons ...bombed.
Pirates At Worlds End is rumored to be costing around 400 million which means some around 1.2 billion to make a profit. The second one was a bloated mess with too many plot lines. Lets hope the third one can clean things up.

Ratatouille is a Pixar movie and we will just have to see how well it does.

National Treasure: The Book of Secrets ....I can only assume wil be a as stupid as the first so I know for a fact that this one will make money.


I don't watch ABC and those three shows you listed are part of the reason why. I doubt that if you asked anyone if those shows you listed are the type of High Quality Entertainment that made them fall in love with Disney....I doubt they would say yes.

Much of what you said is true, however they are big movie releases (even if a few of them bomb). You'll notice I didn't mention Wild Hogs even though that did pretty well. Since Disney spent a crap load of money to buy Pixar, I think that makes Ratatouille one of their movies.


As far as the ABC shows I think Lost in the only one I remotely like, but a LOT of people watch and enjoy the other shows I mentioned.

 

[YoHo]

None of which has a single thing to do with What AV said.

AV said that without the money from the Parks, Disney would be able to release only 1 large movie a year and then included the animation group seperately.
So far, the 2 releases you indicate are major, that have come out, have tanked. Certainly that doesn't bode well for the financials.

 

[Another Voice]

"Profit" is not the same thing as "cash". Basic accounting.

Pirates 3 will be earning "revenue" for years as it plays in theaters, sells DVDs and then gets dunmped on basic cable. But all the costs to make the movie have to be payed for now - the catering company isn't going to wait five years to be paid for Johnny's "munchie runs" in Jamacia, they want their money, their cash right now.

Where did you think that $300 million in good U.S currency comes from?

 

[MasterShake]

None of which has a single thing to do with What AV said. AV said that without the money from the Parks, Disney would be able to release only 1 large movie a year and then included the animation group separately.

He stated that the parks where the only thing making money and that is not true. I listed the best facts I could find to prove my point. If Disney has a net income of 931 million for the second quarter and the parks made them 382million of that, then they are still getting 549 million. So that gives Disney 549 million to work with from the second quarter alone. I realize this is only for one quarter, but if they have an average net earning anywhere near this every quarter, then this would be more then enough to open several big budget (non-Animated) films.

So far, the 2 releases you indicate are major that have come out, have tanked. Certainly that doesn't bode well for the financials.

Also I went on line and looked at best estimates on production costs and current revenues from some of the movies mentioned above:

---------------------------------
Bridge to Terabithia

Estimated Cost - $60 - $80 million
Current Box Office - $113,697,649

Bridge to Terabithia had a higher then expected opening weekend according to most analysts. With DVD sales and future earnings this will probably make a decent profit.
---------------------------------
Wild Hogs

Estimated Cost - $60 million
Current Box Office - $225,269,656

A terrible movie (from what I have heard), but it still made a crazy amount of money.
----------------------------------
Meet the Robinsons

Estimated Cost - $100 million
Current Box Office - $140,922,967

This is probably the closest thing to a bomb out of the movies that I have mentioned so far, but will probably post a profit in the end as well.

 

[doconeill]

Ah, but don 't you know that no movie in history (well, maybe very few) has made a "profit", according to Studio accountants? Ask any producer, director, etc. - especially if they have a stake in the net profits.

Hollywood gets to do some funny math with their numbers - like taking revenues from one movie that has done well to offset a true bomb, and in the final accounting the movie that took in all the money breaks even...

 

[MasterShake]

"Profit" is not the same thing as "cash". Basic accounting.

Pirates 3 will be earning "revenue" for years as it plays in theaters, sells DVDs and then gets dunmped on basic cable. But all the costs to make the movie have to be payed for now - the catering company isn't going to wait five years to be paid for Johnny's "munchie runs" in Jamacia, they want their money, their cash right now.

Where did you think that $300 million in good U.S currency comes from?

Well I will admit that I did not major in accounting, but let's take a look at what the article states.

LOS ANGELES (AP) - Net income at The Walt Disney Co. increased 27 percent in the second quarter, boosted by strong results from its film studio, advertising sales at ESPN and international sales of its TV shows, including "Desperate Housewives."

The media conglomerate, based in Burbank, said Tuesday its net income for the quarter ended March 31 was $931 million, or 44 cents per share, compared with $733 million, or 37 cents per share, in the same period a year ago.

They use the term Net Income. I was pretty sure I knew the definition for Net Income, but I looked it up anyway. This is the definition I found:

Net income is equal to the income that a firm has after subtracting costs and expenses from the total revenue. Net income is primarily an accounting term used in the US; in other countries (such as the UK) profit is the usual term.

Again I might be wrong, but it sounds like Disney (after costs) made $931 million during the second quarter of 2007.

As you mentioned I know it can take years to make money off of some of these big budget movies, but Disney has been making big budget movies for a while now. Even if they spend 300 million on the current pirate’s movie, they are still collecting money on hundreds of other movies previously released. Couldn't a lot of the money be coming from those previous movies, just like future money will be coming from Pirates 3?

The article also mentions that Revenue is flat. So they are making approximately the same amount of money, but spending less. We know that operating costs have increased at the parks, so the decrease in spending is not being made there. While you may not like the movies, they are still spending big bucks to make them. I know a lot of cuts have been made (some questionable), but do we have any figures that show where the majority of the cuts took place?

 

[EUROPACL]

Also I went on line and looked at best estimates on production costs and current revenues from some of the movies mentioned above:

AV who works in the biz has stated several times before that typically a movies needs to make back 3x its production and advertising cost in order to turn a profit. You need to understand that box office money is split between the studios and the theaters. It gets even more complicated when you have more than one studio involved with the release, a big named star who may get a back end cut or directors and producers that have their hand in the pot too.. Deep is rumored to be making around 150 million for the three pirates movies when its all said and done.

 

[MasterShake]

AV who works in the biz has stated several times before that typically a movies needs to make back 3x its production and advertising cost in order to turn a profit. You need to understand that box office money is split between the studios and the theaters. It gets even more complicated when you have more than one studio involved with the release, a big named star who may get a back end cut or directors and producers that have their hand in the pot too.. Deep is rumored to be making around 150 million for the three pirates movies when its all said and done.

Yeah, just doing the little bit of research online was like pulling teeth, with all of the factors that need to be considered. But, I would assume that they do end up being profitable (most of the time) otherwise they would stop making them.

 

[EUROPACL]

Yeah, just doing the little bit of research online was like pulling teeth, with all of the factors that need to be considered. But, I would assume that they do end up being profitable (most of the time) otherwise they would stop making them.

Sort of the way airlines, restaurants and car companies work uh? I would assume that most of them end up being profitable too else they would not keep opening new restaurants, making new cars or flying to New York.

 

[YoHo]

Profitable for who?


I'd like to know which big budget films disney has made, besides the PotC movies, that you think are generating profits?

Pearl Harbor?

 

[MasterShake]

Profitable for who?


I'd like to know which big budget films disney has made, besides the PotC movies, that you think are generating profits?

Pearl Harbor?

Chronicles of Narnia, Wild hogs, and National Treasure are the only 3 that are live action that I can think of from the last 4 years. (Not including POTC 1 & 2) Also, I'm sure they are getting residuals on previous animated films.

 

[YoHo]

Yeah, they're getting residuals on Snow White too. Doesn't mean much for their current prospects does it.

Chronicles of Narnia sends a lot of it's money to Walden. I'd be shocked if National Treasure is still making them any significant money and Wild Hogs wasn't a big budget film.