A few Park notes from Diseny's earnings call

[raidermatt]

I skipped over parts of the call, but here's a few bits...

WDW attendance was down 7% (jan-mar '03 vs. jan-mar '02), per capita spending was up 3%.

DLR attendance up "modestly".

Advance booking window remains "close".

At WDW, reservations have increased for the next few weeks, but bookings through June are still tracking below same period last year. (Remember, we are no longer comparing to pre-9/11 time periods). In the Q&A session, Staggs referred to the bookings being down by "low double digit differentials".

DLR bookings are "somewhat" ahead of last year. (strange that they don't put %'s on the DL numbers. I take this to mean the upward trends are very small, probably less than 2%.)

Three major attractions opening over the next few years...M:S soft opening in August, ToT in DCA next year, E:E in 2006. Also Philharmagic, but apparently they do not consider this a major attraction, as it was mentioned, but not as one of the three "majors".

Focus is on "marketing events" and "large scale entertainment, like Fantasmic, Illuminations, and Festival of the Lion King", which can be "imported to other parks".

Eisner stated that the "intent to visit" over the next 12 months is at its highest point since they started tracking that number 5 years ago.

 

[Bob O]

The so called "intent" to visit sure doesnt seem to be shown in their advanced reservations. And we are comparing a very weak year to this year so it really looks bad at this point!!!

 

[EUROPA]

Originally posted by Bob O
The so called "intent" to visit sure doesnt seem to be shown in their advanced reservations. And we are comparing a very weak year to this year so it really looks bad at this point!!!

How many down years is it now? 4 or 5 ?

 

[Peter Pirate]

Down or not, we're still talking about a company that earned what, 229 million last quarter? This isn't bordering on bankruptcy or something. Sure the trend is tracking down which is consternatious, to say the least, but the last 2.5 years have been very contentious for business across the board (unless you're one of the Presidents' pal's companies) and I see this as a trend only.

It is quite obvious that with the announced production of M:S, E:E, Philhar & ToT (at DCA) Disney is already stepping above what was seen in the past few years.

You can keep beating the negativity drum or hold out with a little optimisim and enjoy life!

 

[EUROPA]

Seems that my company is not a pal of the president and we have increasing our sales and profits... True we are no Disney but that was not point. We haven't been crying on every earnings call that that 9/11 or this or that is our problem. Disney is a huge company and to tell you the truth I could care less about most of the company I'm concerned with one area....the Parks.


Don't get me started on MS how long has then been in the "building stage" now? ARe you really counting that as a change in thinking from Disney?

Nope I've seen nothing from Disney that tells me they understand the problem or are ready to fix it.

I love how people like you try to pin people like us as "not enjoying life" becuase we are able to see problems and don't have issues with saying something about it. History is filled with those that sit by and just let it happen and those that react. Heck the last two years in our history will show you that. No... trust me I enjoy life, but Iwill call a spade a spade.

 

[crusader]

I could care less about most of the company I'm concerned with one area....the Parks.

The parks aren't separate from the company. .

Nope I've seen nothing from Disney that tells me they understand the problem or are ready to fix it.

Rest assured they know very well where the problems lie. Whether or not the politics within the organization are adequately addressing them is another issue. Why is it considered wrong to acknowledge that there is some positive movement going on? Are the die hard anti Ei$ner vigilantes so regimented in their position they feel that to give any consideration to a recent development would be a full abandonment of principle?

 

[Peter Pirate]

People like you

Oh, I'd say you just pigeon holed me way more than I did you...Naneenaneebooboo...

Seriously, I didn't mean to sound preachy, I apologize for the tone if it bugged you in the least...

However, I do believe these recent announcements, which haven't been so prevelent in the near past, do signal a change in direction. To have this many projects on the drawing boards, IMO, is a good thing. If M:S is as revolutionary as they say then combined with TT, Epcot will be quite popular again. I'm absolutely sure Philhar will be stupendous, ToT will do a lot to bring people to DCA, and E:E has got to be what "the masses" ae looking for in AK...How can this not be seen as positive unless your bent on the current state of Disney is just overwhelmingly negative?

 

[raidermatt]

You gosh darn Pirate People...

You can keep beating the negativity drum or hold out with a little optimism and enjoy life!

Yikes! You mean if I don't share somebody else's optimism for Disney's business prospects I can't enjoy life?!?!?



I don't want to get into whether or not these new attractions will be great, good, or whatever, simply because its still just speculation, and we are 3 months away from the earliest, and at least 3 years away from the latest.

But I do want to take a look at this:

If M:S is as revolutionary as they say then combined with TT, Epcot will be quite popular again.

Are you really confident of this? Epcot's attendance plunge didn't really start until after TT opened. That's not to say I think TT caused it, just that an E-ticket or two, no matter how great, isn't going to be enough to reverse the attendance trend.

Don't you think Epcot's issues go much deeper than just changing out WoM/Horizons for TT/M:S?

Same concept with DCA... I think its problems are greater than ToT.

AK is not as far off the mark as DCA, nor as negleted as Epcot, so I can see viewing E:E (if its truly is great) as being able to give it a significant boost. But I wonder what will happen to AK's attendance between now and then... It might need E:E just to get it back to current levels, especially if you adjust for outside economic factors.

WDW probably needs to be on a 1 major addition per year schedule, and the stuff currently announced doesn't meet that, never mind make up for the previous years that didn't add anything major, or added things that fell short.

SO FAR, I don't really see it as a change in direction, as much as possibly a deceleration of the same direction.

 

[Another Voice]

Deleted Scenes from Famous Movies

Today's Episode: TITANIC.

FIRST OFFICERS: Captain – water is still coming in the forward hold! We must take immediate action or we could loose the ship!

CAPTAIN: Sure the trend is tracking down which is consternatious-

FIRST OFFICER: But Captain – the “trend” isn’t going down…it’s the SHIP!! The water isn’t going just to some how stop all on its own. Someone has to do something!!

CAPTAIN: We're still talking about a company that earned what, 229 million last quarter?

FIRST OFFICER: No sir! We’re talking about a ship – you know, a big chunk of steel in the water. You balance the displacement against the bouncy – that kind of complex physics stuff. It means you can’t have a boat that half floats – we’re either doing well or we’re not! And we’re not doing well!

CAPTAIN: I see this as a trend only.

FIRST OFFICER: Down is bad – it doesn’t really matter if other ships are sinking at the same time because you’re still sinking too!!. It’s not like all those other ships are going to fill up the Atlantic and we can walk on their wreckage all the way to New York!

CAPTAIN: It is quite obvious that with the announced production of M:S, E:E, Philhar & ToT-

FIRST OFFICER: Yes sir, it’s nice we’ll have a new movie to show the third class passengers trapped in the ship’s cinema, and I’m sure the new spinner in the laundry room will be most amusing – but the flooding is coming from decks A,B, & C. You can’t float part of a boat! You can’t expect the Promenade Deck to save the entire ship all by itself. The other sections of the ship must be secure as well!

CAPTAIN: Disney is already stepping above what was seen in the past few years.

FIRST OFFICER: If you mean we’re not going throw her into reserve just so we can go back and hit the same iceberg again, you’re probably right. But the first one caused so much damage we won’t be afloat long enough to hit the next iceberg in our path!

CAPTAIN: You can keep beating the negativity drum-

FIRST OFFICER: No, sir. That’s the signal to get passengers to the lifeboats! Look – see that’s the Bass Brothers getting into boat number three, and those on the port side are filled with the mutual fund passengers. I heard a rumor Warren Buffet dressed up like a women to sneak into the boat carrying away the state employee unions pension managers.

CAPTAIN: -or hold out with a little optimism and enjoy life!

FIRST OFFICER: Captain, there’s a band playing up on deck. Why don’t you take a brandy out there and enjoy the concert. Afterwards you’ll have a very nice swim too.


{with apologies to Mr. Airlarry for stealing his concept and to the kind Mr. Pirate for being on the receiving end of far too many of my posts}.

 

[YoHo]

HAHAHAHAHAHA ROTFLMAO

Oh, and A_V, your new sigline is good too.

 

[Planogirl]

You can keep beating the negativity drum or hold out with a little optimisim and enjoy life!

Mr Pirate, always good for a great quote! I personally prefer to play neither the negative or positive drum but to be very cautious.

Very funny, AV.

 

[OnWithTheShow]

Voice,

promise me you will never write a screenplay and use your power to have it filmed!

 

[Peter Pirate]

Very, very funny Mr. voice. Although you once again misconstrue my point I do appreciate the ability to make something funny out of...Well, anything.

I do believe though, that having all of these attractions in the works, when it hasn't been this way for awhile, is positive or at least COULD signal that somebody is starting to see some necessity in making positive movement...Otherwise why not just KEEP adding spinners & mad mice?

As for sinking elements, they are distinctly different in ships and business. Would you care to go back just a few years and see how many failing companies managed to turn it around to live in tremendous times (GE? IBM? Any of the Auto Companies).

The Company is still going and they certainly know the score. Maybe Eisners plan just isn't working, maybe he is just a corporate raider in CEO's clothing...But he could retire tomorrow or see the light via the decreased profits. It's all possible.

I'm sorry my rosy outlook makes me appear so foolish to people I thought should see through it but you guys still aren't asking the pertinent questions & ganging up on Scoop won't get you there, even if it's done with respect, either...

 

[Peter Pirate]

Matt,
No I don't think the success of M:S will cure Epcot, I said I think it will bring back the crowds. Two thrills standing next to each other will definately put bodies in the park...But I did not mean to imply that this was the 'big fix'.

WS needs updating badly and in FW Living Seas & Wonders of Life are on life support at best. The crowds will return for the thrills but Disney still needs to address the more serious problems to keep them coming back...Otherwise M:S, like TT will just be a multi-million dollar bandaid.

 

[EUROPA]

I would not mistake a couple of bones as a turn around in Philosophy from Disney. Especially if the bones come every 3 years. Seems that Universal has a better understanding of their customers. Attendance was dropping at the studios...so they looked around and said...looks like we have a few attractions that need updating...and then Bam.... three new attractions are on the board, all opening within a year of each other.

 

[Another Voice]

All joking aside, there are some serious issues to discuss. Like you, Mr. Pirate, I too can see how Disney can turnaround and keep itself afloat. But I’m still waiting for them to start.

For the last five years the only plan we’ve heard from the company really amounts to “we’ll sit back and let it will fix itself”. Park attendance is down after 9/11 – we’re told that there’s growing “pent up demand” and people will come flooding back all on their own (and they cut costs to keep the margins up on lower attendance). The Studios have not earned a real profit in years and years, but there’s no change in the movies they are making (other to make them cheaper so they show a profit on lower revenues). The Stores have been troubled for years as well, so they close them down (which is the ultimate way of cutting costs).

I see a lot of reaction to events, but almost no action to actually fix the issues with the Company.

Yes, I do agree that ‘Mission: Space’ and ‘Expedition: Everest’ are very positive signs. But even here they do have the feeling of half measures. The attendance at Epcot and Animal Kingdom is down drastically; a single attraction in each park may not be adequate to reverse the situation. Single attractions are important for maintaining a park’s attendance, but they have never been shown to actually reverse a downwards trend. Bolder plans – like the Discoveryland makeover of Future World – may be riskier but the rewards would certainly be greater. Animal Kingdom would be helped to a greater degree by the full Beastly Kingdom rather than just a one roller coaster.

It’s not the case of a lack of resources either. Between production, marketing and other costs it seems likely that Disney will spend over $225 million on Pirates of the Caribbean: The Curse of the Black Pearl. That’s the cost of ‘M:S’ and ‘E:E’ combined. The cost of Beastly Kingdom was less than Disney’s investments in Reign of Fire and Bad Company. Even the costs of some proposed re-purposing of California Adventures come in at less than the budget for next year’s Bruckheimer mega-movie. Surely someone somewhere might be willing to give up just one movie to make a park investment that will pay-off over decades.

And that’s just the parks – what about ABC, cable, the Stores, music, the internet, the sports teams, licensing, animation and all the rest of the company? Does anyone see any truly bold efforts there to bring Disney back up to the top? Sadly, all I see are minimally efforts that really seem aimed at stopping things from getting worse instead of trying to make things better.

I think Disney has the resource, I think Disney has the talent – what it lacks is a management with the courage and vision to make it happen. Sadly, as long as the captain stands idly on the bridge expecting things simply to all magical work out by themselves, the ship will continue to take on water. At some point it will pass the point of no return – and then nothing will be able to save her.


P.S. – For every company that righted itself, there are dozens that didn’t. When was the last time you flew WDW’s official airline?

 

[crusader]

It would appear now that after waiting over five years for a situation to remedy itself it has become painfully obvious that a more radical approach was needed. Whether or not corporate continues to stay involved remains to be seen. The booking trends were probably a clear indicator of where the parks were heading financially this year and the competition is doing a good job of selling the notion that disney is for the fairytale crowd.

There are so many areas which will need to be turned around and a decade of running things in the opposite direction won't be corrected anytime soon. I just get a confused over the pattern of debate here. On the one hand, it is argued that the current administration is doing nothing but contributing to the degradation of the parks so there is a continual demand for change. As soon as there is something even remotely optimistic brought to the floor the same dissenting crowd turns and argues that to be the problem as well because the company's not really doing anything new.

 

[airlarry!]

Sports people in the know are betting large that the Ducks of Anaheim will be sold right after this marvelous run...and precedent has been set with the Angels' sale right after the WS.

Isn't it funny how the same numbers are different when seen in different lights? It seems like a Beastly Kingdom make-over even with the Reign of Fire themed coaster was way too expensive for Burbank, yet AV tells us they spent more on Bad Company and ROF together than the whole blue sky BK expansion. The two movies stand to make a lot more direct dollars, but movies like that have such a short shelf life--unless they become Star Wars-type franchises. A giant new section of a theme park can influence a million more people per year to come to your park, and in five-seven years, that's a lot of Disney Dollars spent at the gates, in the stores, and at the Rainforest Cafe.

It seems to me that Synergy for ME is a word he uses after something is succesful and he's looking for ways to make money off of it, instead of how the company's units can work together to produce better products.

 

[raidermatt]

On the one hand, it is argued that the current administration is doing nothing but contributing to the degradation of the parks so there is a continual demand for change. As soon as there is something even remotely optimistic brought to the floor the same dissenting crowd turns and argues that to be the problem as well because the company's not really doing anything new.

From my perspective, its like if we said Disney was heading directly "South", towards a cliff, and away from the "promised land" behind them. Now they make a 5, even 10 degree turn. That's nice, and I'll acknowledge that there is potential, but unless we see a real philosophical change, the direction is still a problem.

Further, the optimism that a turn has actually been made is based on M:S, which is largely financed by a sponsor and not open yet, Philharmagic, which is 4-6 months from opening, and even according to Disney not a major attraction, a new fireworks show we know little about, and E:E, which is a drawing.

It took Disney a long time to convince a lot of people they were no longer the company those people "fell in love" with. Its going to take more than one or two great attractions, or a few other rumors, for those people to get back on the bandwagon.

Personally, I see the point that there are more positive signs than there were a year ago. But there is just not enough to prove with any certainty that a philosophical change has come about. Further, from a purely practical point of view, there is years of neglect and mis-management to overcome.

So yeah, my level of optimism has increased slightly. Is anyone really saying that, logically, it should have moved any more than that at this point?

 

[lrodk]

Disney has been very aggressive in offering unprecedented travel incentives in the form of discounted packages(ie the recently announced 7 nights for the price of 4 nights Fairytale Package-good for travel from 7/7-10/30,which represents a 43% discount....NOW THAT's AN INCENTIVE!!!), which would not have been warranted had there been strong interest in advanced bookings under normal circumstances. The statement was incomplete and could easily be misconstrued if taken at face value. Give me advanced booking increases in the face of normal price patterns and then I'll start to get excited.