I Iger and his bean counters getting ready to sell WDW!

[Whatsthegoodword]

GREAT. Another "WDW SUCKS" thread.

 

[OKW Lover]

I'm enjoying AKK's post here. I've followed his posts frequently on the cruise boards here on the DIS and over on Cruise Critic and always found them to be very useful. I may not agree with him on this particular rumor but it is thought provoking.

 

[Tonka's Skipper]

I'm enjoying AKK's post here. I've followed his posts frequently on the cruise boards here on the DIS and over on Cruise Critic and always found them to be very useful. I may not agree with him on this particular rumor but it is thought provoking.

Why thank you OKW!. Same here!

Lets go another direction........how would it effect our DVC memberships, if at all??

 

[Tonka's Skipper]

GREAT. Another "WDW SUCKS" thread.

I did not mean this to be a anti WDW thread, but you have to admit there are some issues. I would hate the idea of WDW being sold

More a what if thread?........



We are going in May and expect a wonderful/Magical vacation as always..........

AKK

 

[TheRustyScupper]

I see no way for this to happen.
. . . DisneyWorld is a CASH COW, so it can't be dumped
. . . Disney California, also
. . . Disney Paris (the grand loser) is barely owned by ABC/Disney
. . . Asian parks are primarily owned by oriental companies

 

[OKW Lover]

Lets go another direction........how would it effect our DVC memberships, if at all??

I think the basic DVC membership is secure since we all have deeded rights. I understand that FL timeshare law is pretty tight (as a result of some horrendous abuses many, many years ago) so the new owner wouldn't really be able to alter the terms.

However, I'm sure the current perks that DVC members get (like discounts in the parks, tickets, etc) would change. Of course, that's changeable even now.

 

[Horace Horsecollar]

Lets go another direction........how would it effect our DVC memberships, if at all??

As DVC owners, we have the "right to use" our ownership and our obligation to pay the maintenance fees until our resort expiration date (or until we sell our ownership).

Our DVC paperwork has wording that essentially tells us not to have any expectations beyond our DVC resort. If Disney decided tomorrow that it would be more profitable to bulldoze the parks and replace them with housing tracts (or to sell the parks to another company), DVC owners would have no recourse.

The probable reality, however, is that Walt Disney World will remain a popular visitor destination well beyond our lifetimes or our DVC contracts.

 

[Figmentforever24]

LOL.I agree its far fetched......not likely and as TJkras pointed out you have to find a company willing to work under Disney financial and operational terms.
TJkraz all your points and others are well taken. Their are many economical reason not to sell.

Some posters have pointed out that Iger knows how to run a company..................well that actually make be wonder more, because I don't believe Iger ever understood Disney and the Disney brand and their relationship to making money by providing the best product, but one that is just good enough to get bye.

You may want to remember he's leaving in 2016.....just the time frame to finish putting together a deal to sell WDW and make a big bonus as he leaves.

His kind of operation may just look at the WDW billions and thing I can use that money in another country or development and make more profits!

Not a easy thing to do, but any multi Billion dollar sale would be a hard thin to put together.

Step back a bit and look at what Iger and his bean counters have been doing in cutting left and right.................creating a lot of issues guests are not happy about and new guests are starting to watch and wonder.

Attendance at the MK has increased, at least it has recovered from 2008, but not so much for the other parks.

Know I have read a number of posts saying WDW is a big money maker...............but is it really?.........I cannot find a clear report on what WDW is making!.. If it doing better or worse.


Add to this that Iger as stated he wants to make Disney a international Company , not a American Company and is doing just that, especially in the fair east.

I am not saying this is going to happen, in fact its not likely, but looking at the big picture, you have to wonder what maybe happening behind the scenes



I know I am thinking a little bit machivialian(spl?)


AKK

I see your point and I guess I kind of understand, but I still think you are a little crazy. Disney World is the biggest money maker for the company hands down. Look at it this way. Over 17,000,000 people went to the Magic Kingdom last year. Now ticket prices hiked around spring time and went up to 96 bucks. Now lets say for the sake of this argument that everybody bought a one day ticket to Magic Kingdom for 96 bucks. Magic Kingdom in a year would have made 1,632,000,000 bucks. That's Billion with a B. Now some people bought one day passes before the price hike while others did not. Some spent money on multi night packages while others bough annual passes. So that number isn't obviously on the money, but it gives you the idea that Magic Kingdom alone makes millions upon millions of dollars on just tickets. Now factor in hotel rooms. A deluxe hotel as of now averages about 350 with no deals give or take. Lets say that a family buys a 3 night 4 day package, and decides they will spend the money to stay at the Yacht Club. Well 350 * 3 is 1050 bucks. That don't seem like a lot until a lot more people are doing it for longer periods. Think we haven't even thought about food prices, merchandise, the other three theme parks, the water parks, recreation ect. Now compare that to like Disneyland's two theme parks, three resorts and shopping district. Logically it doesn't make sense to think it is somehow making more money then Walt Disney World. In fact none of the resorts around the world make more. Iger is good at business. Maybe not when it comes to adding things to the parks, but just look at the Disney stocks. They Disney company itself is in a boom. He knows how to handle money. He is staying until 2016(Which was originally 2015) to oversee the completion and grand opening of Disneyland Shanghai. After that someone else will step in to oversee the company. So you don't have to worry about Disney World being sold off especially in the next two years.

 

[tjkraz]

I'll just add that MANAGEMENT of the DVC program could be sold / farmed-out. They cannot take away the right-to-use DVC accommodations but Disney could enter into an agreement with someone like Marriott to assume managerial control over the timeshare program (accepting reservations, collecting dues, etc.)

If that were to happen, owners would still have some primary booking rights at their Home resort(s)...the Public Offering Statement guarantees a one month advantage. But the ability to book non-home resorts could be dramatically impacted if DVC were suddenly part of a much larger timeshare system with thousands or millions of additional owners.

Entering into such a deal could be very lucrative for Disney. I'm sure there are timeshares who would pay a substantial price to bring the only on-site Disney resorts into their portfolio. Imagine the benefits if a Marriott or Wyndham could market all future sales prospects on the ability to book Disney resorts.

Over the next 40-50 years, I view the odds of this happening as no less than a 50/50 proposition. Especially if DVD finds itself struggling to sell new resorts. They have Grand Floridian and Poly to drive sales over the next 4-5 years. While there's no shortage of land at WDW, it's unlikely that any other destination will hold the appeal of the 3 monorail properties.

DVC may find itself at an interesting crossroads come 2020-ish.

 

[Tonka's Skipper]

I see your point and I guess I kind of understand, but I still think you are a little crazy. Disney World is the biggest money maker for the company hands down. Look at it this way. Over 17,000,000 people went to the Magic Kingdom last year. Now ticket prices hiked around spring time and went up to 96 bucks. Now lets say for the sake of this argument that everybody bought a one day ticket to Magic Kingdom for 96 bucks. Magic Kingdom in a year would have made 1,632,000,000 bucks. That's Billion with a B. Now some people bought one day passes before the price hike while others did not. Some spent money on multi night packages while others bough annual passes. So that number isn't obviously on the money, but it gives you the idea that Magic Kingdom alone makes millions upon millions of dollars on just tickets. Now factor in hotel rooms. A deluxe hotel as of now averages about 350 with no deals give or take. Lets say that a family buys a 3 night 4 day package, and decides they will spend the money to stay at the Yacht Club. Well 350 * 3 is 1050 bucks. That don't seem like a lot until a lot more people are doing it for longer periods. Think we haven't even thought about food prices, merchandise, the other three theme parks, the water parks, recreation ect. Now compare that to like Disneyland's two theme parks, three resorts and shopping district. Logically it doesn't make sense to think it is somehow making more money then Walt Disney World. In fact none of the resorts around the world make more. Iger is good at business. Maybe not when it comes to adding things to the parks, but just look at the Disney stocks. They Disney company itself is in a boom. He knows how to handle money. He is staying until 2016(Which was originally 2015) to oversee the completion and grand opening of Disneyland Shanghai. After that someone else will step in to oversee the company. So you don't have to worry about Disney World being sold off especially in the next two years.

Figment , as I said before I do not think it will be sold, the points I made kinda got me thinking is all and I thought the discussion would be interesting. At least its not another tear Disney apart thread!

and Yes, my wife (of 36 years) agrees with you, she thinks I am a lot crazy at times, but that makes life interesting.

AKK

 

[Tonka's Skipper]

I'll just add that MANAGEMENT of the DVC program could be sold / farmed-out. They cannot take away the right-to-use DVC accommodations but Disney could enter into an agreement with someone like Marriott to assume managerial control over the timeshare program (accepting reservations, collecting dues, etc.)

If that were to happen, owners would still have some primary booking rights at their Home resort(s)...the Public Offering Statement guarantees a one month advantage. But the ability to book non-home resorts could be dramatically impacted if DVC were suddenly part of a much larger timeshare system with thousands or millions of additional owners.

Entering into such a deal could be very lucrative for Disney. I'm sure there are timeshares who would pay a substantial price to bring the only on-site Disney resorts into their portfolio. Imagine the benefits if a Marriott or Wyndham could market all future sales prospects on the ability to book Disney resorts.

Over the next 40-50 years, I view the odds of this happening as no less than a 50/50 proposition. Especially if DVD finds itself struggling to sell new resorts. They have Grand Floridian and Poly to drive sales over the next 4-5 years. While there's no shortage of land at WDW, it's unlikely that any other destination will hold the appeal of the 3 monorail properties.

DVC may find itself at an interesting crossroads come 2020-ish.

Now those are good points. Our contract ends in 2038......not that its likely I'll be around then. I'll let me kids worry about it!

AKK

 

[Tonka's Skipper]

As DVC owners, we have the "right to use" our ownership and our obligation to pay the maintenance fees until our resort expiration date (or until we sell our ownership).

Our DVC paperwork has wording that essentially tells us not to have any expectations beyond our DVC resort. If Disney decided tomorrow that it would be more profitable to bulldoze the parks and replace them with housing tracts (or to sell the parks to another company), DVC owners would have no recourse.

The probable reality, however, is that Walt Disney World will remain a popular visitor destination well beyond our lifetimes or our DVC contracts.

Hi Horace!

Funny you worded your comments that way. When I had our atty go over the contract he said the same thing. It looks great, but in a worse case possibility.................figure you only have use of the resort (then the Disney Vacation Club) now OKW.

AKK

 

[Horace Horsecollar]

I'll just add that MANAGEMENT of the DVC program could be sold / farmed-out.

The post by tjkraz is full of excellent points.

I'll add that The Walt Disney Company could also spin off DVC -- or any other part of Disney -- as its own corporation.

Marriott International has demonstrated that by breaking up into several separate "pure play" companies, the sum of the parts (in stock market valuation) can be worth more than the whole.

Marriott Vacation Club is no longer owned by Marriott International. In 2011, Marriott's timeshare business became its own company, Marriott Vacations Worldwide Corporation. The new company licenses the Marriott name from Marriott International.

Over the years, Marriott has spun off other separate companies -- Host Marriott Services, Sodexho Marriott, and Crestline Capital, which, in turn, have modified themselves, their names, and their ownership (and, in at least one case, has done its own spinoff).

In the end, however, the core businesses of Marriott International and its spinoffs still function pretty as they always have from a customer perspective.

Even if Walt Disney World is eventually owned by a multinational mining and agriculture company based in Beijing, chances are there will still be a Disney-branded Walt Disney World with the Magic Kingdom as its flagship park and Cinderella Castle as that park's focal point.

 

[Planogirl]

Disney has been in an investment mode for a while now so who knows? I can't see them selling the parks but they could bring in someone else to manage them.

 

[Horace Horsecollar]

The Walt Disney Company has undoubtedly looked into selling off assets that tie up capital to free up capital for other purposes.

For example, the Disney's Contemporary Resort probably has a real estate value of over a billion dollars. Disney could sell it, free up more than a billion dollars, and lease back the hotel. From a guest perspective, there would be no change. From an accounting perspective, it would change the Contemporary Resort from a cash cow into a pile of cash and a business that requires expensive lease payments in the long run. I'm sure Disney has evaluated its options a number of times over the decades, at least since the arrival of Eisner in 1984. So far, the Contemporary Resort remains a Disney asset (and a cash cow).

Owning an asset, operating it, and branding it are three different functions. If it's done right, it's seamless to customers.

 

[Figmentforever24]

Figment , as I said before I do not think it will be sold, the points I made kinda got me thinking is all and I thought the discussion would be interesting. At least its not another tear Disney apart thread!

and Yes, my wife (of 36 years) agrees with you, she thinks I am a lot crazy at times, but that makes life interesting.

AKK

I understand and I apologize if I ever came off rude or snarky. I thought you were serious...=p. Alright the discussion may continue normally now. =)

 

[Tonka's Skipper]

I understand and I apologize if I ever came off rude or snarky. I thought you were serious...=p. Alright the discussion may continue normally now. =)

NO>NO>NO> problem Figment, I took It as good fun!

AKK

 

[Tonka's Skipper]

The Walt Disney Company has undoubtedly looked into selling off assets that tie up capital to free up capital for other purposes.

For example, the Disney's Contemporary Resort probably has a real estate value of over a billion dollars. Disney could sell it, free up more than a billion dollars, and lease back the hotel. From a guest perspective, there would be no change. From an accounting perspective, it would change the Contemporary Resort from a cash cow into a pile of cash and a business that requires expensive lease payments in the long run. I'm sure Disney has evaluated its options a number of times over the decades, at least since the arrival of Eisner in 1984. So far, the Contemporary Resort remains a Disney asset (and a cash cow).

Owning an asset, operating it, and branding it are three different functions. If it's done right, it's seamless to customers.

OK..a billion for the Comtempory resort!...........16 resorts, other hotels on property, 4 theme parks, 2 water parks.golf courses, empty land ....etc......etc..............

Just what would WDW be worth as a straight sale, licensing/leasing the Disney brand with it???

AKK

 

[Figmentforever24]

OK..a billion for the Comtempory resort!...........16 resorts, other hotels on property, 4 theme parks, 2 water parks.golf courses, empty land ....etc......etc..............

Just what would WDW be worth as a straight sale, licensing/leasing the Disney brand with it???

AKK

More then what is in my savings account that's for sure!

 

[Horace Horsecollar]

OK..a billion for the Comtempory resort!...........16 resorts, other hotels on property, 4 theme parks, 2 water parks.golf courses, empty land ....etc......etc..............

Just what would WDW be worth as a straight sale, licensing/leasing the Disney brand with it???

AKK

Someone with more financial knowledge needs to do the math.

The current stock market capitalization ("market cap") of the entire Walt Disney Company is $145.74 billion. That's the total value of all issued shares. Normally, the market cap is much higher than the value of the underlying assets; otherwise the company is a target to be taken over and broken up (as almost happened to Walt Disney Productions in the 1980s).

The "worth" of WDW would be based on how much value such a transaction would bring to the buyer and the seller.

My guess is that there is no amount that would satisfy both the buyer and the seller. Such a transaction would weaken the overall business of The Walt Disney Company. The parts would be likely to be worth less than the whole. Disney relies heavily on synergy between its business units. Some of that can be achieved with licensing agreements, and Disney's business segments already operate with their own P&Ls which roll up to the overall P&L. But it's hard to see how divesting WDW would help anyone.

If a divestiture of WDW were to be seamless to guests, all of the current issues remain -- such capital investments, operating costs, underlying assets, and making the right business decisions to continue to attract guests year after year while maintaining/improving profitability.

If a divestiture of WDW were meant to break WDW away from the Disney brand and Disney IP (possibly including new names for the parks and retheming Disney IP), then the value to the buyer would be much less than what it's worth to Disney.