Comments about DVC being sold...

[Horace Horsecollar]

Originally posted by Chuck S
[Roy] Disney has made no moves in the direction of breaking up the resorts or theme parks since Eisner joined the company - in fact he was brought in to prevent that 20 years ago when it seemed to be a real possibility - why would that strategy suddenly change?

Nobody on this thread is saying that Roy Disney is pushing the idea of "breaking up the resorts or theme parks." But Roy Disney and Stanley Gold are putting a lot of pressure on Michael Eisner. What we see is only the public pressure in the form of the letters and press reports. We don't see the actions that Disney and Gold are likely to be making to get insitutional investors on their side.

Unfortunately, Eisner has an incentive to do everything possible for short-term profits and quick stock price increases. Many companies have unloaded assets to generate cash, and used that cash to retire debt and/or to buy back stock (to increase earnings per share by having fewer shares outstanding). The speculation in this thread -- and it's only speculation -- is that Disney Company management (Eisner or a successor) could view their resorts in Florida as a big pile of capital that could produce better results if "freed" and used elsewhere.

Originally posted by Chuck S
Eisner, age wise, has 11 years left that he is eligible to serve as CEO, and I don't see any cause to think there will be any immediate effects from Roy's departure.

Michael Eisner will turn 62 in March 2004. It's highly unlikely he'll remain as CEO of Disney for 11 years, regardless of The Walt Disney Company's policies regarding retirement ages for various positions. (It's very possible he'll remain a Director into his 70's if he can hold on to his power base, but unlikely he'll remain CEO that long.)

 

[Chuck S]

Ummm...I didn't say that [ROY] Disney ever made moves to break up the company. I was referring to the Walt Disney Company. You misunderstood. There was talk by the Disney board of breaking up the company's divisions for seperate sale PRIOR to Eisner being hired. Roy Disney recommended Eisner for his postition to avoid the break up of the company.

Nor did I say that Eisner WOULD remain CEO for 11 years, I said that AGE WISE he is eligible to do so.

And the point of my post was that if Eisner was hired essentially to hold the company together, there is no reason to believe he would suddenly break it apart for short term capital.

 

[JimC]

Selling the hotels would be a dramatic change from the Disney principles. Walt wanted total control of everything the guest experienced once on property. RCID was set up specifically to grant control that, to my knowledge, no other company has in the state of Florida. I suspect RCID had some sort of carve out for Celebration -- maybe they incorporated the city to take it out of RCID. I believe Swan and Dolphin are 99 year ground leases to get around outside ownership within RCID. I have no idea how the Buena Vista area (hotels near DD) is structured.