Disney to sell their DVC unit?

[CP3uhoh]

I'm confused with the obsession on sports betting tied to this rumor, which is false. They own almost 5% of Draft Kings thanks to the FOX deal, though they are at risk of being diluted thanks to a deal that is in the works. The real money is licensing the brand of ESPN and not requiring any overhead to run the sports betting operation or take on any of the risks. IT's like owning a stadium and selling the naming rights, the Cowboys don't help run AT&T but they took a ton of money of them and go about their business. ESPN Zone could come back as a sports book, licensed, with the gaming revenue and risk taken on a by another company but nice spot on the boardwalk for dad to go check out the games and bet on an app after the kids get tucked in. They don't want the risk of having to offset the risk or set the lines of gaming but they can still cash in and that licensing revenue can help replace part of the cable revenue loss for ESPN and help fund content costs for ESPN+

 

[M:SpilotISTC12]

Honestly I wouldn't be surprised if this happens. Disney likes money and they could score a decent payday and losing a headache to them. I hope this doesn't happen but we'll all have an asset that is way less valuable should they sell off DVC.

 

[sethschroeder]

Honestly I wouldn't be surprised if this happens. Disney likes money and they could score a decent payday and losing a headache to them. I hope this doesn't happen but we'll all have an asset that is way less valuable should they sell off DVC.

Except what does the buyer get? DVC only has a lease on land they don't own the land. So in 30-50 years there is zero value in this acquisition.

 

[hhisc16]

Except what does the buyer get? DVC only has a lease on land they don't own the land. So in 30-50 years there is zero value in this acquisition.

And for 2042 resorts, this is only roughly 20 years worth before Disney owns the land again from the lease expiration?

 

[Brianstl]

Except what does the buyer get? DVC only has a lease on land they don't own the land. So in 30-50 years there is zero value in this acquisition.

The rights to sell all future DVC properties and maybe they get control of all the hotels too, if Disney decides to go in a similar path as Universal.

 

[M:SpilotISTC12]

From Len in another forum. Seems to clarify a bit.

 

[sethschroeder]

The real money is licensing the brand of ESPN and not requiring any overhead to run the sports betting operation or take on any of the risks.

Except no one is going to pay to license the ESPN brand but they may pay to embed the ESPN content (example pull up live betting in a sportsbook app and watch the game live while you bet).

IT's like owning a stadium and selling the naming rights, the Cowboys don't help run AT&T but they took a ton of money of them and go about their business. ESPN Zone could come back as a sports book, licensed, with the gaming revenue and risk taken on a by another company but nice spot on the boardwalk for dad to go check out the games and bet on an app after the kids get tucked in.

Except thats not the context of sports books with Disney from what I understand. Its about an online sportsbook that would be accessible from everywhere (or where legal) and potentially tied directly in to the ESPN broadcasts (cable and plus). If its only about the ESPN location at WDW then Disney would just likely skip gambling all together.

 

[LPnerd]

I found the talk fascinating. Appears Bob Capek is truly large and in charge…… sports betting is coming. How long will it be before you will be able to gamble with the Mouse as you cruise?

I hope soon, as of now that's why we won't go on a disney ship. Nothing for us old folks to do.

 

[sethschroeder]

The rights to sell all future DVC properties and maybe they get control of all the hotels too, if Disney decides to go in a similar path as Universal.

So now we are on Disney selling off all their hotels?

Also if its about selling all future DVC properties then Disney still controls that since they own all the land. Unless you think Disney is going to sell off the land in these deals?

Additionally with Universal the outright own those hotels in a 3rd party where as with DVC you have all the Deluxe resorts tied to DVC resorts so making it a tad messier unless supposedly to your point Disney is out of the hotel game.

 

[DonMacGregor]

So now we are on Disney selling off all their hotels?

The way this is headed, I’ll be able to use my Marriott Bonvoy points to book a cash room at GF by this afternoon.

 

[Brianstl]

So now we are on Disney selling off all their hotels?

Also if its about selling all future DVC properties then Disney still controls that since they own all the land. Unless you think Disney is going to sell off the land in these deals?

Additionally with Universal the outright own those hotels in a 3rd party where as with DVC you have all the Deluxe resorts tied to DVC resorts so making it a tad messier unless supposedly to your point Disney is out of the hotel game.

Disney could lease the land out just like they currently lease it out to their DVD subsidiary. DVD doesn't own the land now as a separate legal entity owns the land.

 

[Westerlin]

I think it probably is, and one of the reasons Disney may not manage sell it ...there is a big difference between looking to sell a subsidiary and actually closing the deal. Disney is going to want a LOT of money for it, and the revenue stream for a buyer doesn't seem to be there - except to be able to add this to their portfolio and sell more timeshares in Branson with "and you can stay at Disney's Beach Club Villas." On the other hand, I've seen some acquisitions that closed that were WAY stupider. HP buying Compaq comes to mind.

The Branson thing is brilliant. Can you imagine how another timeshare companies sales would go through the roof if they could dangle Beach Club to someone buying a week in Branson or Brek!

 

[sethschroeder]

Disney could lease the land out just like they currently lease it out to their DVD subsidiary. DVD doesn't own the land now as a separate legal entity owns the land.

So basically the Disney equivalent of Hong Kong?

 

[tjkraz]

The Branson thing is brilliant. Can you imagine how another timeshare companies sales would go through the roof if they could dangle Beach Club to someone buying a week in Branson or Brek!

I think you're vastly overestimating the value of Disney resorts to the typical timeshare customer.

Every major timeshare developer already has a presence in Orlando. Some are closer to the theme parks than DVC's own locations (Bonnet Creek.) DVC itself can't even sell Aulani points to someone who wants to stay at the BC.

 

[CaptainAmerica]

The Branson thing is brilliant. Can you imagine how another timeshare companies sales would go through the roof if they could dangle Beach Club to someone buying a week in Branson or Brek!

That already exists and it's called RCI.

 

[AvidDisReader]

Except I can't see Disney selling the land. So do they sell a land lease to the new owner so they can do another 50 years contract beyond the existing contract? There really isn't that much money in already sold out resorts. They essentially are buying the rights to run ROFR and control who services go through.

Also with "breakage" is Disney really going to want some 3rd party running multiple hotels in the premium locations on property? Think about it this way the resort section of this board will now be talking about not checking Priceline (which Disney controls their pricing on) but checking XYZ company to see if they have discounts on Grand Floridian, Poly, or others.

This is my problem with all this conjecture. The buildings are on a 50 year land lease. So, would the buyer not want a guarantee that they can renew the lease. And why would Disney agree to such a deal on some of the most valuable land on their property? It has been speculated for years that when HHI and VB contracts are up that Disney would sell these properties. But selling land within the borders of WDW, just do not see where that makes any kind of economic sense. And the one thing we know about Chapek, he understands how to make a buck.

 

[GAN]

I don't believe it was a rumor at all. It was nothing more than a "what if...?" It's an interesting subject for discussion at this point. But rumors usually have some basis in truth and this sounds more like a sports bar discussion of if the 1975 Steelers played the 2019 Patriots, who would win?

It sounds more like executives doing their job if you ask me. A good leader will always look into options and scenarios so that they have some kind of plan ready for a quick decision ...unlike the pandemic, which clearly they(or anyone else really) weren't prepared for. The fact it was "leaked" tells me Chapek & Co. are probably reading through this forum right now. If it was something truly "in the works" we never would have heard anything at this point. Hi Bob!

 

[DonMacGregor]

It sounds more like executives doing their job if you ask me. A good leader will always look into options and scenarios so that they have some kind of plan ready for a quick decision ...unlike the pandemic, which clearly they(or anyone else really) weren't prepared for. The fact it was "leaked" tells me Chapek & Co. are probably reading through this forum right now. If it was something truly "in the works" we never would have heard anything at this point. Hi Bob!

Except go back and read Post #106. The originator of the rumor, Len Testa says he doesn’t think it came from inside Disney, but from outsiders sniffing for some M&A red meat (which I suggested upthread).

 

[Westerlin]

It sounds more like executives doing their job if you ask me. A good leader will always look into options and scenarios so that they have some kind of plan ready for a quick decision ...unlike the pandemic, which clearly they(or anyone else really) weren't prepared for. The fact it was "leaked" tells me Chapek & Co. are probably reading through this forum right now. If it was something truly "in the works" we never would have heard anything at this point. Hi Bob!

I agree that Disney wanted this leaked, I second the Hi Bob LOL

 

[RoseGold]

I welcome our Marriott overlords if they can get a working website. FIX THE WEBSITE BOB/BILL.