I don't think ESPN has hit Parks & Resorts yet, but if the stock panic continues that's another story. Hadn't thought about Paris though.
They're in a really weird place right now. They know they need to build up in Florida, but they also need to reduce their debts. Hard to balance those two, but you certainly don't do it by putting down $5 billion (think I'm kidding, consider how much Pandora has cost) to build a 5th Gate.
Oh...it's even way more convoluted than that. I am not an economist or a Wall Street ratings agency...but I've read more about Disney finances in the last 10 years than I've spent time sleeping...
And here the whole lay of the land...in no particular order:
First problem is ESPN. As We have discussed - 40% of Disney's fiscal punch that now is on the seemingly irreversible decline. Cord cutting, decline of ad revenue associated, and much higher fees to carry sports...to say nothing of competiton that is just starting to come directly from the sports themselves.
So the void has to be compensated by the #2 money maker - parks.
But Paris has been described as a "23 year financial disaster"..."cultural Chernobyl" from day 1...and featured the suicide of its two heads in 2010 (no...really). It's propped up by the Saudis...for gods sake (bad pun).
I've seen others say recently "things seem to be ok...it's the most visited destination in Europe". But it never makes any money!!! And can't because of the debt since day one. That's all the way back to Eisner and wells...and there just isn't an end in sight.
And China...after the very "mixed" success of Hong Kong (think euro...very similar)...they double down on a ridiculous investment - which they ultimately don't control - in the center of a land that is neither politically...and more importantly CULTURALLY friendly to the star spangled banner.
And oh yeah...they can't figure out how to pull the country out of nosedive because it's not likely possible. Fun times in Shanghai/Beijing.
So how does the parks division do what it has too?
Ahhh...old faithful. The old private island landlocked in the center of the Florida peninsula.
They finally are gonna have to do what many of us have been SHOUTING about for 10+ years...not ignore us (to be fair...I was naive in my earlier adulthood and the neglect/exploit began in January of 2001 under old clowns).
So now here's the wench of it:
They now have to build in the swamp to make more money to backstop these other things...and likely Bigtime. But how do they do it while MAKING money off it to support these other things?
It's impossible. You can't continue to charge much more for the same junk and think everyone is good to buy Disney parks 2016 tshirts. There is an endpoint to every train line.
And as always pointed out - the vacationer is not in the position to change reality. For most - that is limited funds and constricted time available. So how can you make more?
You would - theoretically -expand capacity so that there are more raw numbers in the place at a given time. Eisner wanted you spending 10 days instead of 7...it can't be done. So Iger has to figure out a way to make 2 7 days for every old spot...which costs a lot in logistics and infrastructure.
It's a mystery inside and enigma inside a conundrum...
And here's how you'll know it won't work:
Iger announces in six months he's "tired" and says he'll leave in 2017...a year early. Then he'll exercises his parachute options and liquidate though semi-unscrupulous "legal" means. Then he'll live in the tanning studio with les moonves and summer redstone full time...
It's like the sign of the star telling the wise men to head to Nazareth...or in this case - head the other way.
