Disney is hurting for cash

[Eric Smith]

Yes but the window to access these resources can be limited, at least at historic levels. if ongoing concern issue were to became apparent before this option is used then the window for practical purposes closes

They took out an $11B line of credit when this whole thing started. They're going to be able to borrow enough for a long while.

 

[Jrb1979]

What Disney should do going forward is do the same as all other local parks. It would save a lot money. That is put in one major attraction a year. Instead of Rat, Tron and Guardians coming within the next year spread them out. Rat is this year, Tron 2 years from now and Guardians 3 years from now.

 

[firefly_ris]

What Disney should do going forward is do the same as all other local parks. It would save a lot money. That is put in one major attraction a year. Instead of Rat, Tron and Guardians coming within the next year spread them out. Rat is this year, Tron 2 years from now and Guardians 3 years from now.

Meh. They did nothing in the parks for nearly a decade so IMO all this catch up over the last couple of years was sorely, sorely needed and overdue. Before the pandemic they really really needed the additional capacity from these new headliners, and quick.

 

[Jrb1979]

Meh. They did nothing in the parks for nearly a decade so IMO all this catch up over the last couple of years was sorely, sorely needed and overdue. Before the pandemic they really really needed the additional capacity from these new headliners, and quick.

Now they don't have to money to do a lot of the projects that they planned.

 

[Eric Smith]

Meh. They did nothing in the parks for nearly a decade so IMO all this catch up over the last couple of years was sorely, sorely needed and overdue. Before the pandemic they really really needed the additional capacity from these new headliners, and quick.

Yeah, imagine what would have happened if they invested all of that Shanghai money in to the domestic parks instead. They deferred a lot of upgrades in the domestic parks (Epcot especially) while they spent all that money to build a park in mainland China.

 

[firefly_ris]

Yeah, imagine what would have happened if they invested all of that Shanghai money in to the domestic parks instead. They deferred a lot of upgrades in the domestic parks (Epcot especially) while they spent all that money to build a park in mainland China.

Don't get me started on that one. I will never warm up to that decision.

 

[KittyKitty]

Yeah, imagine what would have happened if they invested all of that Shanghai money in to the domestic parks instead.

Disney only owns 43% of Shanghai Disney. Rest is own by Shanghai Shendi Group.

 

[RivShore]

Meh. They did nothing in the parks for nearly a decade so IMO all this catch up over the last couple of years was sorely, sorely needed and overdue. Before the pandemic they really really needed the additional capacity from these new headliners, and quick.

What decade are you talking about because in the last 5-10 years there has been a ton of investment in WDW. Of course EPCOT was left to languish while the other parks were updated.

 

[RivShore]

No one on earth thinks disney will "fail". Running low or out of cash and going under are two totally different things.

Disney has lots of things it can sell for more cash. The question is how quickly is Disney burning thru it's cash. I think much faster than wall street knows. We all expect the Q2 call to be terrible, how bad we will find out in less than a month. Q3 call though i think will really show these limited numbers of guests are not helping much either and cash burn has continued and much steeper than wall street wants to hear. Cast members and other costs are so much compared to revenue. They don't have the once in a lifetime international families buying every bell and whistle you have lots of season pass holders and super fans who now how to save money. DVC members, super fans, and season pass holders all know how to save and what isn't a good deal. Disney thrives off of the big spenders. Q3 call i think they won't be able to spin these general statements as the cash burn and loses will tell the full story.

Disney still won't say what percentage capacity WDW is needed for profitability, wall street will want to know more as this goes on longer. That question will come up on the Q2 call again. They asked it twice on Q1 as its really important to see how much money disney will really burn thru. The longer this goes on for, the more that is a really important question. In early May i think we all assumed we would be in a much better place come July/August. I am sure disney is preparing answers as they had ready last call, but the analysts will try maybe in a less direct way.

Disney plus is awesome, its great, its a huge success. It won't actually cover its own costs for 3-5 years still. It's also super small for Disney compared to film revenue and park revenue. Disney plus is a huge success but years away from actually being profitable and it could lose alot of members if they dont keep adding new content(which is expensive). Look for Disney to try to focus on Disney Plus and take up time, but the analysts questions to zone in on parks and cruises.

Basically disney will weather this storm, but its cash situation is definitely one to watch. Q2 and Q3 calls will be must dial in events.

Actually I wonder if, on a cash basis, Disney +might surprise during the quarterly report. If all production was shut down for most of the quarter, cash out the door should have slowed considerably while subscriber revenue upticked. But as you said, it's a tiny piece of the pie at this point.

 

[firefly_ris]

What decade are you talking about because in the last 5-10 years there has been a ton of investment in WDW. Of course EPCOT was left to languish while the other parks were updated.

2000 - 2010, post 9/11 and recession. Adding hotel rooms doesn't count as plussing the Parks to me. Takes more than 10 years to catch up after such a long period of stagnation. I realize a lot of it was due to the economy at the time but there were still other in-park investments they could have done to get ahead of the game so that when things really started getting crazy the last couple of years they could have been more ready.

 

[Mit88]

What Disney should do going forward is do the same as all other local parks. It would save a lot money. That is put in one major attraction a year. Instead of Rat, Tron and Guardians coming within the next year spread them out. Rat is this year, Tron 2 years from now and Guardians 3 years from now.

Creating new rides every year requires off the rack shopping. Most of the local parks that build new rides every year have little to no theming. Not that it doesn’t work, it does for smaller parks, but that doesn’t work for Disney. Now, Disney does take forever to build a themed attraction (and parking garages) while Universal typically takes half the time even with equal or greater theming, but that’s just an issue that I’ll never understand.

As someone else said, Disney is playing catchup on bringing more guest eating attractions to all of these parks. Magic Kingdom will always get crowds, but the other parks need new draws every 5-10 years to keep the interest and the parks full. DHS was dead for 3 years while MK, Epcot, and AK were all packed because DHS wasn’t even a half-day park. Now DHS is packed along with MK while AK and EPCOT are drawing smaller crowds. Once Guardians and Rat are open, you’ll have crowds dispersed through all 4 parks and AK will soon need a new draw.

Disney didn’t know when they planned these attractions that in 2020 there would be a pandemic. They planned them out so that when the 50th anniversary rolled around, people wouldn’t just be packing it in to 1 or 2 of the parks, they wanted a new (under 5 years) attraction at every park. And they’re not going to stop working on them now just to space out the opening years. They’re all way too far along.

What happens next with new attractions on property is anyone’s guess. But they’re not broke. If they feel its time to announce a new attraction (other than PatF retheme) at D23 2021, they’ll do it. I personally don’t think they’ll go back to back D23’s without having a major attraction announcement. I think we’ll see an announcement for something at AK or another themed area replacing Animation courtyard at DHS. Just my guess

 

[RivShore]

2000 - 2010, post 9/11 and recession. Adding hotel rooms doesn't count as plussing the Parks to me. Takes more than 10 years to catch up after such a long period of stagnation. I realize a lot of it was due to the economy at the time but there were still other in-park investments they could have done to get ahead of the game so that when things really started getting crazy the last couple of years they could have been more ready.

I agree with that. The parks were in poor general condition towards the end of the Eisner era.

 

[Mit88]

Actually I wonder if, on a cash basis, Disney +might surprise during the quarterly report. If all production was shut down for most of the quarter, cash out the door should have slowed considerably while subscriber revenue upticked. But as you said, it's a tiny piece of the pie at this point.

Q4 will also show the numbers from people that subscribed for Hamilton. Not exactly sure when the quarter ends but it could also see a jump from Falcon and the Winter Soldier, though unlikely to start airing in August, its still slated for an August premiere, currently. And maybe even Mandalorian S2, but I believe the season starts after Q4 has already ended.

Now what’s important about this is that these are all new paid subscribers as Disney has ended the free trial prior to the release of Hamilton. I haven’t seen the numbers on how well it did, but considering from July 3-6 my Twitter feed was exclusively filled with Hamilton tweets, and I’m still seeing people who continue to rewatch it, I’m guessing it was streamed by ALOT of people, a lot of people that swore off Disney+ after the finished Mandalorian S1 via free trial.

 

[rteetz]

What decade are you talking about because in the last 5-10 years there has been a ton of investment in WDW. Of course EPCOT was left to languish while the other parks were updated.

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I would say from roughly 2001-2011 was a decade of minimal investment in WDW. You had some notable things of course but nothing like we have going on now. A large influx of construction now shows a period of lack of growth. DHS and Epcot being the two parks that really lacked investment for so long.

 

[bookwormde]

They took out an $11B line of credit when this whole thing started. They're going to be able to borrow enough for a long while.

Yes but the risk of lines of credit is that the providers almost always have clauses that allow then to suspend, or even cancel the line for a variety of reasons related to financial stress indicators of the company. That is why many companies carry their dept through bonds, and use a line for short term needs that they expect to pay back relatively quickly

 

[noonew]

Now what’s important about this is that these are all new paid subscribers as Disney has ended the free trial prior to the release of Hamilton. I haven’t seen the numbers on how well it did, but considering from July 3-6 my Twitter feed was exclusively filled with Hamilton tweets, and I’m still seeing people who continue to rewatch it, I’m guessing it was streamed by ALOT of people, a lot of people that swore off Disney+ after the finished Mandalorian S1 via free trial.

It was reported by Variety that during July 3-5, the app was downloaded 752,451 times globally, and 458,796 times in the U.S. alone. Assuming most of the download are new subscribers, then Disney+ made about $3.2 million in U.S. subscription alone. I don't know about the fee for other countries, but it's highly likely that Disney+ made more than $5 million on that weekend alone. The number of new subscriber from Hamilton could be higher than the number reported because I believe many of those who got Disney+ just for Hamilton already downloaded the app days before July 3.

 

[Mit88]

It was reported by Variety that during July 3-5, the app was downloaded 752,451 times globally, and 458,796 times in the U.S. alone. Assuming most of the download are new subscribers, then Disney+ made about $3.2 million in U.S. subscription alone. I don't know about the fee for other countries, but it's highly likely that Disney+ made more than $5 million on that weekend alone. The number of new subscriber from Hamilton could be higher than the number reported because I believe many of those who got Disney+ just for Hamilton already downloaded the app days before July 3.

They’ll lose some subscribers for the month of August that were only interested in Hamilton, but they’ll gain different viewers and keep some of the July subscribers if FatWS stays course. From there, they still have Mandalorian S2 and possibly Wandavision to finish out the year/start the new fiscal year. I think Disney+ will have a strong finish of the calendar year as far as subscribers go

 

[New Mouse]

They’ll lose some subscribers for the month of August that were only interested in Hamilton, but they’ll gain different viewers and keep some of the July subscribers if FatWS stays course. From there, they still have Mandalorian S2 and possibly Wandavision to finish out the year/start the new fiscal year. I think Disney+ will have a strong finish of the calendar year as far as subscribers go

Theres not enough unique content to have long term appeal. Its pretty stale already after just a few months and I get it for free. Maybe if you have kids it will work.

 

[ScubaCat]

WDW Pro is something...

. Indeed.

 

[Mit88]

Theres not enough unique content to have long term appeal. Its pretty stale already after just a few months and I get it for free. Maybe if you have kids it will work.

Netflix didn’t have its first piece of original content until 6 years after the service started, and wasn’t until 9 years that they had a total 5 original shows.

So I’m not exactly sure it’s correct to assume after 8 months that Disney+ wont have unique content to have long term appeal.

HBOmax and Peacock both have less that Disney+ when they launched