Financial Specialists Questions Disney's ethics, and that Eisner may be staying.

[civileng68]

Finally someone from the professional world, not affiliated with Disney in any way, including not a shareholder, has spoken out about Disney under Michael Eisner.

Last night on The "OReilly" Factor, a professional financialist made mention that the rise in Disney's prices really are not justified. Basically Disney has made it sound like the rise is cost is due to the economy, hurricanes, wars, whatever you want, but according to the financial statements, there's no need for those price hikes, considering that Eisner gave himself a $60M bonus 2 years ago, on top of what he was already being paid.

The gentleman made mention that the attractions are becoming much less Walt"ish" than ever, in that the originality factor has really become nearly extinct.

He really questioned the price of trips to Disney and how the average family (which is who Walt created the parks for) is soon to become priced out of an on site Disney vacation. Sure if we want the parks bigger and better it cost more money, but this gentleman is saying that according to the financial statements, price rises, and employee cut backs are not needed, and that essentially it's all a smoke screen to net more profits instead of making up losses.

He even mentioned that even though Eisner is set to leave, that he is now talking to his members about staying and that he may be planning a shocker statement that he's staying.

I dont know how true that is, but I will say this..........I've said for a long time that Eisner despises the shareholders, since most want to run him out, and I think he may claim publicly soon that he's staying, just to cause chaos. I think he'll end up selling his shares and walking off as a very very wealthy man, but I really think he's not done causing havoc yet.

 

[swilphil]

I don't like the fact that Disney prices go up, but like any other for-profit business they will charge what people are willing to pay. I would take any thing I heard on O'Reilly's show with a grain of salt. What is a financialist anyway?

 

[DVC Jen]

interesting

 

[WDSearcher]

This is probably more appropriate for the News & Rumors board, don't you think??

 

[eeyore0062]

This is probably more appropriate for the News & Rumors board, don't you think??

Definitely, it has nothing to do with trip planning and will only incite others.

 

[civileng68]

Sorry about posting in this forum, this is just the only one I read and I never though to post over there, so by all means, move it (mods) if you like.

About the term "financialist".........well that's me speaking, and I dont remember the professional term for the gentleman's position.

About taking it with a grain of salt. Note that the remarks and guest speaker had nothing to do with Bill OReilly or even Fox News. The same guy has been on MSNBC and CNN as well. He was interviewed because he's been on the "inside" in many of Disney's financial ongoings and knows alot about the ins and outs of Disney's company.

Actually I agree with the guy that in general Eisner is a bad CEO who really has "abused" the fact that many people are such Disneyholics that they're willing to pay any price to get into the action.

HOwever, from an economics perspective, it's true that people are willing to charge whatever people are willing to pay to meet an "equilibrium" price. However, in some cases that doesn't always make it "the right thing" to do, and I think that's what this guy was saying.

Example: Economics works on the theory of supply vs. demand. In other words, demand works inversly with supply and, the law says the more you charge for something, the demand drops. The price that a company should "economics thinking" charge would be the price that consumers are willing AND ABLE to pay at for a certain amount of something.
The problem here is that you will find people willing AND ABLE to pay for Disney trips at ANY cost level. I think truly that Disney is shifting their own demand curve. I think that they make more money by pricing lower middle class families out of their parks and resorts and cater to the higher income families who can spend more freely. Sure others of us still go. I still go, you still go, but the point being made was that, their marketing is directed to the high money consumers.
Also, back in the mid 80's there were alot of families who were at the middle to low middle class who could go and stay for a week on a disney resort, yet today cannot come close. Sure, Disney can and some will say, should do what it takes to make the most profit.
However, I say that even though that's true, Disney would have more money in it's pockets if not for it's current CEO. Eisner takes money FROM Disney parks and throws it into other business entities that have NOTHING to do with Disney other than the CEO link that is Eisner.

Actually I think the guy was "right on". The only thing that I disagree with was that Eisner will stay longer. He may say it, but honestly, I think the shareholders would nearly crucify him (myself being one) if he decided to take this route.