Getting worried about the future of WDW

[Lesley]

I know my analysis of the current WDW situation may not be up to par with some of the regulars on this board (and I admire you all and wish I had the kind of time to devote to this board to join in the discussions more often!) but I am beginning to feel quite worried about my beloved WDW. Was my trip in August of 2000 the last "real" WDW trip I will ever get? If things are so bad that these drastic measures are necessary just to keep the parks open at all, is WDW on the verge of collapse? Why are things being done that will most likely reduce revenues...cutting hours, dropping parades and shows, getting rid of resort guest perks, and closing resorts? I'd really love to believe these things are just temporary and that the actions will help WDW in the long run....but will they really? Or is the place just being set up for a fast run into the ground? Or a takeover (though I'm almost wondering if that would be an improvement)? Or as some have asserted...is the management of WDW just lining its own pockets at the expense of guests and cm's alike?

These thoughts actually have me very happy my trip is coming up in January.... even with the reductions and cut backs, at least there is still a WDW. And I'm both curious and fearful at what my May and following December trips could hold in store. But mostly I just want them to happen!

Anyone else afraid this may be the beginning of the end?

(Sorry to be so negative!)

 

[JeffJewell]

Anyone else afraid this may be the beginning of the end

...I think it's already about the middle or so of the end. Those really big fireworks could go off at any time, now.

Jeff

 

[Lesley]

Darn, Jeff...you just said what I really didn't even want to think...and what scares me the most is that I tend to agree with most of what you've written lately.

Of course, this would be how it goes since we just joined DVC a year ago and are making our first DVC trip in Jan. And I guess HH will get really hard to book if WDW goes under, eh?

 

[d-r]

Lesley....

I don't think that the concern is that walt disney world would "go under," I think the concern would be that the company would be taken over, and who those new owners would be. One might worry that any potential new owners would know even less about pixie dust than the current administration.

DR

 

[DVC-Landbaron]

Anyone else afraid this may be the beginning of the end?

Welcome to my nightmare! I've been on about this for a couple years now. I guess, because of the recent bone cutting reductions, more people are realizing it. But many of us have seen the handwriting on the wall for some time now.

But take heart! The fat lady (or mouse) hasn't sung yet!! It all comes down to management philosophy and administrative abilities. Both of these concepts are non-existent at Disney at the present time. Ei$ner not only has no idea at all regarding the "Disney Philosophy" he is also very, very inept!! So, a change in administration is clearly called for. Now, that doesn't mean things will get better. Heck, they may even get worse (hard to imagine, isn't it?). But maybe. Just maybe. With a little bit of luck, we could get someone who not only "gets" the Disney philosophy, but also knows how to implement it!

Hey! At least it's something!!

 

[hopemax]

I also think this is the middle of the end.

I believe that the economic boom of the late 90s gave people the freedom to not have to make hard choices on how to spend their money. If they wanted an SUV, a trip to Grandma's, a new computer, DVD player AND a trip to WDW (insert your own choices and number of choices), they could have it all. People developed a habit that vacation = WDW.

But then the bottom fell out of the tech stocks and the economy turned south and people started having to GASP! make a choice? They could either have a trip to WDW and nothing else or the trip to some other "perfectly nice but maybe not so nice as WDW, I don't know yet because I've never been there" destination and the computer and DVD player. That's when all the changes at WDW that were only minor annoyances started rearing their ugly heads and people started thinking that maybe WDW wasn't the best use of their money after all.

Then 9/11 happened and I think it just amplified the existing problems. People now have the opportunity to get out of the habit of vacation = WDW. And there is a very real possibility that they will find something else that is just as fun and fulfilling as a trip to WDW was (and cheaper!). And then what? Are people supposed to give that up just because WDW brought back their normal schedules?

The problem with "DIS people" is that WDW means so much that we can't imagine life without it. In that respect WDW is like the first boy/girl that broke your heart. You can't imagine finding someone as wonderful again, but life goes on and other wonderful people enter your life. Same with vacations, wonderful vacations are out there, as long as you are open to experiencing them.

 

[JeffJewell]

...that the "big fireworks" might turn out to be for the best, in the long run.

There are folks that fear some "corporate raider" swooping in and dismantling Disney's creativity while they cash in on the brand name, but I consider that a pretty accurate description of the job being done by the current pilot.

I don't think WDW will go under. The murky question is whether or not WDW's next honcho views the parks as an ATM or a showplace. All we can do for now is hope.

Jeff

 

[Lesley]

Ah, no consolation here, eh? LOL...

Good points all....

Yes, Hope "there are other worlds than this one". Off to Japan....(well eventually)

And once again I agree, Jeff (and Landbaron too)....a very accurate description of what's happened already. Like I said...perhaps our best hope *is* a takeover....

 

[hopemax]

Off to Japan....(well eventually)

I'm lucky in that from where I live it costs the same and takes the same amount of travel time to go to Japan as it does to WDW. A few years ago I didn't know that! The thought of a trip to Tokyo was good for a good laugh, I couldn't afford it! Then I stopped, and really looked at what I was spending on WDW vs Tokyo and got an eyeful.

And therein lies the problem WDW is facing in addition to airline fears and cash flow problems. One that "waiting for recovery" will not solve.

 

[YoHo]

Previous to this week there had been a lot of discussion about upcoming anouncments regarding new rides and so forth.

whether these cost cutting measures are right or not, I suspect that Disney has no plans to cash it in any time soon.
Eisner gets one shot at this and he is on the bubble.

So I'm still waiting for that press conference in Dec. I wouldn't be surprised to hear about a few new capital expenditures.

At the same time, that last paragraph took every once of mental strength to write. Much as I think Disney will recover, there is nothing certain in these uncertain times.

 

[All Aboard]

Corporate Raiderism 101

The thought of a takeover is always very troublesome. Disney's market cap flirted with dipping below $30B after 9/11 (now it sits at about $39B). With earnings way down, that still computes to a P/E of darn near 100.

Does that translate to an undervalued company? Hard to say what others are thinking, but I seriously doubt that there are too many folks of means that think now is the time to become the next Saul Steinberg (and it would take more than his $300m to have an impact today.)

Is there much value in a break-down-sell-off scenario?

Instead, I think a takeover threat would be better positioned by a company that is willing to take Disney the distance. OK, maybe I'm floating around in a dream scenario, but to me it makes more sense.

 

[Planogirl]

No one is mentioning the war at all in this. Things are quiet on the homefront now but what if, God forbid, that changes? Even relatively minor events seem to rattle the cages of investors and consumers. Or if the war escalates to other nations? Will this affect WDW? Will if even matter at that point?

I prefer to stay as positive as possible and hope that no one else will be dragged into the conflict. But life is definitely uncertain nowadays to say the least.

 

[Captain Crook]

There is no company big enough or willing to face the regulatory scrutiny or crazy enough to buy Disney at this point in time. Disney IS too big & its value is too unspecific to make it lucrative. Even if it could be bought (which it can't) whomever buys it would have to have a magical disposition to keep any sembelence of the Disney we have known & I ask Disducks now famous question, who would that benevolent leader & raider be? Anyone?

No, Disney is safe, Eisner's job, neigh his Disney legacy is hinging on 'right now'. Yoho is right about the near future announcements, but more importantly Eisner must make the right decision as to the right time to start actively wooing guests back to WDW. They do not feel now is the time and this is a concern for us, but I'll repeat again, Disney does not want to be booming when or if the bioterrorism threat really comes to life, they are obviously more content to be tight & secure (as they are currently playing it). Am I the only one that thinks this? That Disney is scared & it has nothing to do with lost tourism? Oh well, I may stand alone, but at least I'm standing...No wait, I'm sitting...Never mind!

 

[TXDeb]

Captain Crook -
Let me see if I am understanding you correctly. You believe Disney may be actively avoiding attracting more guests (whether directly or indirectly through their actions) to keep themselves shut down tighter and smaller in case bioterrorist threats become a bigger threat and depress travel even more? Disney would already be in cost saving mode, thus limiting further cut-backs and potential losses, in a worse case scenerio.

Do you believe that they are afraid of being a potential target and are trying to limit guests in order to limit their potential liability if something did happen? In other words, less guests and CMs means less people to seek damages against Disney if they did become a target?

Not sure what I think of these theories, yet, just trying to clarify what you are stating.

 

[Another Voice]

Comcast won’t have any trouble at all with the regulators...

 

[Captain Crook]

That is what I'm saying. Look at the types of things being done/considered. Closing of parades & Fantasmic (both congregate large groups). The consolodation of open hours into nice daytime hours - leads me to believe that this is better for security. Not actively pursuing large crowds - for sure easier for security.

I was told by two supervisory CM's in discussions last week that the FBI is maintaining a heavy presence at WDW and Disney security is at levels they've never seen before.

Further, IMO, our government is not being forthright with facts about things (here at home). We know from news reports that we don't have enough smallpox vacine to go around, but these things are really downplayed - I would guess Disney does have access to certain inside information, which would certainly make this otherwise seemingly bizarre business tact they've been taking make a litle more sense.

So, thats a theory...

 

[Captain Crook]

AV, what would a Comcast possibly know about running theme parks, a televison network, movie divisions, etc. I couldn't see any hope for Disney normalcy in that scenerio, nor could I see why Comcast would realistically want to become a media/entertainment Company...

 

[Another Voice]

“what would a Comcast possibly know about running theme parks… ?”

About as much as the former head of children’s programming for ABC & then number three guy at Paramount knew a while back.


“why Comcast would realistically want to become a media/entertainment Company…?”

It’s eat or be eaten. Comcast is the last big media player without an in house studio or a broadcast network. Think of all those channels it could fill up with programming of its own. And Disney right now is an awfull lot cheaper than anyone else.

 

[Captain Crook]

"It's eat or be eaten"...Hasn't that been Eisner's philosophy? In fact the closing of Fox Family proves it, right? Besides the big boys (anybody with enough money to buy Disney) wouldn't want to pay for all that Disney is (their content would still be at a premium, no?) for one demension of Disney that they really want. I'm sure other avenues would be of less financial risk without the broadbased trouble a Company with the breadth of Disney would cause.

 

[TXDeb]

Thanks for confirming that I did understand you correctly, Captain Crook. I appreciate it.

One thought about your theory that this is being done in part for safety - Why would WDW be hosting the Regis and Kelly events over the first week in December. It is being advertised, so therefore they are hoping to draw guests for it. That will put a lot of people in one spot at pre-announced times for the tapings of their morning show and Who Wants to be a Millionaire. That would seem to go against the idea that they are trying to hold crowds down and are cancelling events that keep people together in large groups.