Disney Parks for SALE???

[floridianer]

Well, still in shock and I hope this is only a rumor but over there in the OU Forum are a LOT of insiders...
So this discussion SHOCKS me...

What do YOU guys think (I know here are a LOT of insider too... So come on, tell us!)

http://www.orlandounited.com/forums/showthread.php?6162-Disney-Parks-for-sale

Specially look for posts of Disneyhead. He was really knowledgeable in the past (well and NOW) and what he posted was true.

Really don´t know what to think about that!

PS: I tried to find an existing threat about this but didn´t find one. If there is one, please delete!

 

[OldsDr]

In today's day and age anything is possible. they have been eroding their florida footprint for quite a while, and they get the smallest return on investment from the parks division. As long as they keep the ability to use the parks for marketing other things I can see this happening. If not soon in a decade or so

 

[DisneyHead]

IM DisneyHead. I have no clue what you are talking about. Can there be more than one of me. Lol. Either way I hopethey aint sold.

 

[nytimez]

I don't doubt that Disney could/would sell the parks someday in the right (read: $$$$) set of circumstances. But I do doubt that the first word of it would come from a guy on a message board quoting someone at Laughing Place who knows someone who... etc.

Also, on a practical level, selling WDW would be a massively complex and expensive operation with a very limited number of potential buyers (companies that have billions to spend AND want to get in the theme park business AND want to become slaves to the Mouse since this would obviously involve some kind of long-term or perpetual licensing agreement).

Hard to see it happening... but you never know.

 

[WDWTraveler1990]

This isnt gonna happen soon. No one panic.

The board is at WDW on a retreat. Iger is also reviewing plans for future attractions. Not a surprise, considering the D23 expo is about a month away. They probably also were there to see the progress on FLE.

The Saudi Prince who was said to be meeting with the board, is the largest shareholder of Four Seasons Resorts. They have been trying to build a resort next to Golden Oaks, but it's been slowed down so much due to funding problems and the fact that the resort needed to be redesigned to fit in next to Golden Oaks. Its now schduled to open in 2014.
I'm sure Disney has thought about selling the parks. But then the board has probably thought about other things like buying Universal or SeaWorld too.

 

[OldsDr]

No one is panicing. I don't think it would happen soon and I don't think it would be an out righte sale. ld be some sort of massive lease. Just by looking at the way every other Industy is going with out sourcing.

 

[Figment632]

Ridiclulos no truth to that at all.

 

[lockedoutlogic]

I don't doubt that Disney could/would sell the parks someday in the right (read: $$$$) set of circumstances. But I do doubt that the first word of it would come from a guy on a message board quoting someone at Laughing Place who knows someone who... etc.

Also, on a practical level, selling WDW would be a massively complex and expensive operation with a very limited number of potential buyers (companies that have billions to spend AND want to get in the theme park business AND want to become slaves to the Mouse since this would obviously involve some kind of long-term or perpetual licensing agreement).

Hard to see it happening... but you never know.

X2


...though if you think about it - can we assume that disney can run WDW better than everyone else out there?

That's probably a pretty big assumption...and probably is worth pondering. Don't laugh.

 

[Florida Dreamin']

Maybe some new people on the board but there is no way in hell that they would sell the parks.

 

[OldsDr]

Maybe some new people on the board but there is no way in hell that they would sell the parks.

Maybe not sell. But long term agrement to run them would not shock me in the least. In fact I bet with the right contract the parks could get better if someone else was allowed to run them. Disney would have a garunteed revenue stream from the lease. If the company can not make money or the quality falls below what is in the lease it is a broken contact and disney picks it up again. simillar to the disney store situation.

I am totally shocked that an outside company is not running the hotels right now. Look at how much outsourcing is in every other industry, this would be no different. The same MBAs run Disney as every other company. They all learn from the same books and are stuck in the same box, outsourcing.

To do it at WDW would probably take multiple vendors for different sections, plus the union contracts might have some outsoucing language in them, but never say never in anything that is buisness. It probably wont happen in the next 10 years, but lets remember this thread in 10 years and compare how much of WDW is run by Disney then compared to now.

 

[Ed5781]

I'm convinced that within the next few years, Apple will buy Disney.
It's the perfect marriage, and will keep Apple growing as a multimedia company.

 

[nytimez]

...though if you think about it - can we assume that disney can run WDW better than everyone else out there?

Definitely wouldn't assume that at all. A penny-pinching private equity firm could buy WDW with the intent of squeezing every last cent out of it... and probably not make any changes.

Maybe some new people on the board but there is no way in hell that they would sell the parks.

The Disney board would sell its own mothers for the right price. That said, as I mentioned earlier, I don't think there's much to this rumor.

I'm convinced that within the next few years, Apple will buy Disney.
It's the perfect marriage, and will keep Apple growing as a multimedia company.

Why would they? Jobs is already Disney's largest shareholder and can (and has) easily get the company to cooperate in licensing content and all the other things that are important to Apple without actually having to buy the company. It's the best-case scenario for Apple.

Also, if Jobs wanted to get Apple into the content/production/media business, he never would have sold Pixar to Disney.

 

[tjkraz]

...though if you think about it - can we assume that disney can run WDW better than everyone else out there?

That's probably a pretty big assumption...and probably is worth pondering. Don't laugh.

No laughs here. Under the right circumstances, I think it's entirely possible that the parks would be better served with outside ownership.

Suits are always looking to hit home runs. They want to spend $200 million on a film and see it earn $1 billion.

The parks will never be home run hitters. In the best of times the parks produce solid results, yet nothing that could ever be called spectacular. And during tough times, the profits can quickly disappear. The parks are so mired in fixed costs (labor, upkeep, utilities, necessary reinvestment) that profits take a hit immediately when attendance lags or additional discounts are required to fill hotel rooms.

If Disney could farm out operations, be guaranteed a consistently high return on the parks AND still have ultimate control over the intellectual property, I think they would jump at it. But I don't know who could ever make such guarantees and afford to absorb the impact of a downturn in the economy.

 

[Peter Pirate 2]

A liquidation sale would probably be great for all of us. Perhaps a closely held entity could afford to buy the Parks division and give us a return to the ideals of the inventor. Hey, I can dream, Walt taught me that.

 

[lockedoutlogic]

After a couple minutes of thought...after 5 solid hours of my kids attacking me on the living room floor (ouch)...there are a couple of realities that have set in:

it is entirely possible that this can...and quite possibly will happen. Probably in the distant future...but everything gets bought and sold at some point.

Parks are not fun and games...the overhead and logistics are a complete disaster more often than not...we've seen it ourselves as disney has tried to balance capital expansion and labor reduction over the last 10 years or so.

Its just a nightmare...particularly the orlando labor market. even peanuts yields huge overhead when multiplied by 50,000.

If...big if...disney would secure an extremely longterm contract with generous royalties from everything they stamp their logos on...particularly the merchandise - where the real money is made - i think they would wash their hands of it.

There is no pride in the running of the amusement aspects anymore...its been gone for a long time. just like the United States...there is no honor or appreciation for what we would view as hard, day to day, nuts and bolts work.

If anybody could swing the deal...i think you'd see a remax sign being painted on Spaceship Earth right now.

In fact, now that i think about it...if they could separate the merchandising operation from the park, hotel, and food portions and just run that...you would have a deal. The savings on manpower and overhead would be gigantic...and the chinese crap (and i'm being polite) that people haul home is where the profit is and what the goal is.

So yeah, it would be possible.

I disagree about Apple/ Jobs... Apple has been incredibly smart/ lucky by staying one step ahead of the tech curve for 15 years now...their wave could very well crash. But beyond that - Steve Jobs IS dying. And i would think that his role in the partnership with disney would be hard to duplicate or strengthen to the point where apple would become a buyer of one of the media juggernauts. Its too much even for them.

And the other thing that somebody would probably think would be a deal breaker would be history, tradition, and public perception if disney didn't run disney parks. Like people would stay away...please...those timeshares weren't created by accident. Enron could run Disney World and the parking lots would still get filled up enough. I dismiss that one across the board.

 

[floridianer]

Leemac, our resident insider over at LP is saying that Disney won't sell unless the number is north of $30B. But that would include Disney's 40% stake in Paris and the 51% stake in HK. But the sale would require approval of the French and HK governments.

This came from Disneyhead over at OU ...
Is that YOU, Disneyhead from Dis??

Sounds like it IS a consideration IF the price is right...
Would it be bad? Good?
Could we expect the parks to be kept better? More new attractions?
Disney didn´t do a GREAT job this last decade so maybe a new investor could help?

What do you guys think?

Well, in fact I doubt someone will spent sooo much for Themeparks (quite risky )

 

[Faldred]

Why would they? Jobs is already Disney's largest shareholder and can (and has) easily get the company to cooperate in licensing content and all the other things that are important to Apple without actually having to buy the company. It's the best-case scenario for Apple.

Also, if Jobs wanted to get Apple into the content/production/media business, he never would have sold Pixar to Disney.

First of all, there is a difference between Jobs and Apple -- while for many purposes, they're the same, they're still separate entities.

If you look at Apple's recent directions, I don't think it's unreasonable to think that they want to make a move into the media business. The physical device is becoming less and less relevant while content is becoming the real product. (For example, Apple gets as much, if not more, profit out of the app Store than they do from selling iPhones and iPads.)

Apple's business model to date in this regard is that of a middleman -- they provide the delivery platform for content (and in the case of apps, approval authority) for a percentage off the top (typically 30%). But why stop there? Why not play both ends of the content delivery game and be the producer/owner of content as well as the distributor?

Enter Disney. Or more precisely, ABC. ESPN. Several film distribution companies (Buena Vista, Touchstone, Hollywood, Walden, etc.) Books. Music. Even the recent acquisition of Marvel.

That's a lot of content.

Of course, as you said, Pixar was sold to Disney, indicating that Jobs didn't want to be in the media market. This was likely true, at the time. But markets change, and coincidence or not, the sale also put Jobs in an excellent position to take over Disney in the future.

And in my opinion, the design and management ethic of Apple is a heck of a lot closer to Walt's vision than the bean counters who run the show these days.

 

[nytimez]

For example, Apple gets as much, if not more, profit out of the app Store than they do from selling iPhones and iPads.

That's not even close to true. In fact, I would say you just made that up. Almost half of the company's profit in recent quarters has come from iPhone sales alone -- and about 1 percent comes from the app store.

The app store was made to sell iPhones -- not the other way around.

Aside from that, I would be stunned if Apple made a play for Disney at any time in the foreseeable future. In fact, I would be stunned to see them get into the media business at all -- it's far cheaper to license the content from everyone else, and comes with none of the risk since much of it is based of percentages and profit sharing arrangements rather than up-front costs.

The only time it would make sense for them to change that model is if the media companies find their own model that cuts Apple out of the picture. Since they don't make hardware, though -- and wouldn't agree on formats and standards if they did -- I don't see that happening.

 

[Budshark]

First of all, there is a difference between Jobs and Apple -- while for many purposes, they're the same, they're still separate entities.

If you look at Apple's recent directions, I don't think it's unreasonable to think that they want to make a move into the media business. The physical device is becoming less and less relevant while content is becoming the real product. (For example, Apple gets as much, if not more, profit out of the app Store than they do from selling iPhones and iPads.)

Apple's business model to date in this regard is that of a middleman -- they provide the delivery platform for content (and in the case of apps, approval authority) for a percentage off the top (typically 30%). But why stop there? Why not play both ends of the content delivery game and be the producer/owner of content as well as the distributor?

Enter Disney. Or more precisely, ABC. ESPN. Several film distribution companies (Buena Vista, Touchstone, Hollywood, Walden, etc.) Books. Music. Even the recent acquisition of Marvel.

That's a lot of content.

Of course, as you said, Pixar was sold to Disney, indicating that Jobs didn't want to be in the media market. This was likely true, at the time. But markets change, and coincidence or not, the sale also put Jobs in an excellent position to take over Disney in the future.

And in my opinion, the design and management ethic of Apple is a heck of a lot closer to Walt's vision than the bean counters who run the show these days.

Apple will not make this move, Jobs or not.

Apple is a company with profit margins that are at 24%
Disney has profit magins at 10.38%, and shrinking. They've never exceeded 17%.

For Apple to make this move, they'd have to believe their money would be better spent with Disney, and that they can grow (cut costs) and expand their business to get back to the profit margins they currently have. In addition, they'd have to do this while keeping the current positive outlook of their company.

There may be a part of the company Apple wants (doubtful), but it certainly is not the whole company or the theme parks. The shareholders would stage a coup of any company that made this type of play with their money.

 

[GrimGhost]

Apple will not make this move, Jobs or not.

Apple is a company with profit margins that are at 24%
Disney has profit magins at 10.38%, and shrinking. They've never exceeded 17%.

For Apple to make this move, they'd have to believe their money would be better spent with Disney, and that they can grow (cut costs) and expand their business to get back to the profit margins they currently have. In addition, they'd have to do this while keeping the current positive outlook of their company.

There may be a part of the company Apple wants (doubtful), but it certainly is not the whole company or the theme parks. The shareholders would stage a coup of any company that made this type of play with their money.

Not disagreeing with your position at all, but in referencing Disney margins, I did some math, and it seems that the parks division margin seems to be around 16% and probably near the top of all divisions in revenue and profit. I wonder why they would sell? Also, why are they now just breaking ground on Shanghai and announcing restructuring and promoting within the parks division?