Marvel coming to WDW???!!!!

[DanBoris]

It's funny...I'm returning to the boards after a pretty long layoff, and one of the first threads I stumble across is the re-re-re-rehash of the same conversation about Marvel in WDW we've been having SINCE Disney bought Marvel.

I side with the contract...and the fact it's set up in perpetuity, with no expiration date, no additional cost to Uni (other than their annual licensing fee and the merch cut they send off), and no way for Disney to terminate unless Uni lets things fall, almost literally, to poo (which they won't do).

Disney has no leverage. Uni has no real impetus to offload. Disney gets free checks from Uni. Uni gets relatively cheap use of a huge (and getting huger) property.

I'm firmly in the camp of thinking the number Disney would have to float to Uni to get Marvel "back" would be 10 figures (that's right, the "b" word). That's not bashing, that's not a disgruntled opinion of Disney. That's looking at the contract, looking at the current business climate/relationship/benefits, looking at Uni's current IOA setup and using some commonly held public history about redevelopment/development in a theme park (like, for example, the costs of the DCA project, or the reported costs of Legoland) and coming up with a number.

You look at that number, add to it the costs DISNEY would incur, in addition, to develop attraction at WDW, and the general time frame it would take Disney to actually get attractions built (not to mention: there's question over whether you CAN actually see a marked increase in WDW attendance, and not just a redistribution, based on vacation costs, average vacation length in the US (which hasn't moved in a couple decades), and other factors)....and the numbers just don't seem to add up. I honestly believe the investors would revolt if Iger greenlit that kind of outlay of cash (and it would have to be cash, because Uni has no interest in owning Disney stock). It might actually be MORE cost effective to buy Uni parks and resorts OUTRIGHT...and I don't think THATS on the horizen, either.

How dare you come in here and start throwing logic around, this will not be tolerated.

 

[pilferk]

LOL, Dan! It just KILLS me. It's the same EXACT conversation. Nothing has changed, on either side. Nobody on the side of "Disney's gonna buy it back" has made a different (or compelling) case as to why it makes fiscal sense. And I've just read 11 pages of conversation remarkably similar conversation to the LAST time I was involved in this.

Would it be cool? Sure. And I'd LOVE to see it happen, provided the funds and resources were dedicated to making it as "cool" as it could be.

But me wanting it to be so, and it being in the best interests of either party (never mind BOTH parties) is a very different thing.

 

[pilferk]

I'd like to know too but have no idea...

It could be $1 and it's a deal for Disney...because its a "free" $1...

And... It allows merchandise.
I keep saying this and nobody believes me... Because is intentionally vague in SEC filings...

But ALL the walkaway profits from WDW is in merchandise...or the lions share of like 80-90%.

It's made in mass In sweatshops (boy... Disney should build some parks in those countries to keep the free trade deals flowing )...transported tariff free (the legacy of nafta)... And sold at 20 times the production cost...

That is your profit. Why are there 200 shops in Walt Disney world selling the same things? Cause all the money is in the room rates at pop century?

So with the marvel contract...even a share of the gift receipts is pure, free money...

And there they don't have to pay the sales tax or the $8 an hour for someone to sell it.

That deal will only be broken by Comcast...and why would they do it? Disney advertises their park every 3 months when a new movie comes out...

Very, very, very late to the party on this but wanted to point out ONE thing:

It's BETTER than free money. It's Disney getting paid TWICE.

Because Uni is buying that merch FROM Disney, indirectly. And they are NOT paying cost, I promise you.

And then paying Disney a cut of the sale, on top of that, in the park.

They are, essentially, double dipping.

I'm not sure how that can get any better for them...since they're also paying ZERO overhead on the cut they're getting.

 

[pilferk]

I notice some talk of attendance numbers, in these later pages. I've found www.coastergrotto.com/theme-park-attendance.jsp to be a great resource for that. They don't have 2013 data in there, but they go back to 2003. I'd expect 2014 data to hit any day now (it's that time of year).
Here's total resort (all 4 parks combined) attendance, from 2003 to 2013 (2013 taken from theme park insider published numbers), in millions:

2003: 37.7
2004: 40.7 (7.96% increase)
2005: 42.9 (5.41% increase)
2006: 45 (4.9% increase)
2007: 46.8 (4% increase)
2008: 47 (0.43% increase)
2009: 47.5 (1.06% increase)
2010: 47.0 (1.05% decrease)
2011: 47.4 (0.85% increase)
2012: 48.5 (2.32% increase)
2013: 50.1 (3.3% increase)
2014: 51.4 (2.6% increase)


Hope that helps.

 

[George4]

They are up of course so why would they build star wars if they don't have to

Because without building, they are up 1-2%. What if by building more attractions and expanding the footprint of the existing parks, they could grow attendance by 4-6%? What if they were able to extract the same amount of money from 4% more people? At 50 million current visitors, 4% growth would be 2 million additional people spending (on average) $125 per visit, that's $250 million dollars per year in additional income. If an attraction lasts (on average) for 10 years, then you could spend $2.5 billion today in expansion and break even on just the low end of new visitors. If the additional visitors grew at a 6% clip, that's an additional $125 million per year, for a 10 year growth of approximately $1.25 billion dollars. That's a 50% Return on Investment. That's assuming that people don't spend more time at the parks trying to experience the new attractions, driving up the average visit by a day or so, which would add over $1 billion revenue per year (current visit is avg. of 5 days). Over ten years, that is an additional $10 billion in revenue from existing guests, plus $2-4 billion for new visitors. Now your return is $14 billion on a $2.5 billion investment, around a 500% return on investment.

Of course, 6% growth per year would also mean around 90 million total visitors to the park in 10 years.

Disney is totally in a catch-22. I completely believe they need to expand their parks with more attraction to support the guests they currently have, but you can see the quandary they are potentially facing by doing that.

 

[Planogirl]

LOL, Dan! It just KILLS me. It's the same EXACT conversation. Nothing has changed, on either side. Nobody on the side of "Disney's gonna buy it back" has made a different (or compelling) case as to why it makes fiscal sense. And I've just read 11 pages of conversation remarkably similar conversation to the LAST time I was involved in this.

Would it be cool? Sure. And I'd LOVE to see it happen, provided the funds and resources were dedicated to making it as "cool" as it could be.

But me wanting it to be so, and it being in the best interests of either party (never mind BOTH parties) is a very different thing.

I agree with you (except that I do NOT want to see Disney get the Marvel characters) but in defense of the topic some of the players have changed. I was there the first time (and others endlessly) but those who hopefully propose this keep changing. I imagine that more will be coming.

 

[rteetz]

Because without building, they are up 1-2%. What if by building more attractions and expanding the footprint of the existing parks, they could grow attendance by 4-6%? What if they were able to extract the same amount of money from 4% more people? At 50 million current visitors, 4% growth would be 2 million additional people spending (on average) $125 per visit, that's $250 million dollars per year in additional income. If an attraction lasts (on average) for 10 years, then you could spend $2.5 billion today in expansion and break even on just the low end of new visitors. If the additional visitors grew at a 6% clip, that's an additional $125 million per year, for a 10 year growth of approximately $1.25 billion dollars. That's a 50% Return on Investment. That's assuming that people don't spend more time at the parks trying to experience the new attractions, driving up the average visit by a day or so, which would add over $1 billion revenue per year (current visit is avg. of 5 days). Over ten years, that is an additional $10 billion in revenue from existing guests, plus $2-4 billion for new visitors. Now your return is $14 billion on a $2.5 billion investment, around a 500% return on investment.

Of course, 6% growth per year would also mean around 90 million total visitors to the park in 10 years.

Disney is totally in a catch-22. I completely believe they need to expand their parks with more attraction to support the guests they currently have, but you can see the quandary they are potentially facing by doing that.

I was just playing devils advocate. I definitely think Star Wars would drive attendance up.

 

[pilferk]

Because without building, they are up 1-2%. What if by building more attractions and expanding the footprint of the existing parks, they could grow attendance by 4-6%? What if they were able to extract the same amount of money from 4% more people? At 50 million current visitors, 4% growth would be 2 million additional people spending (on average) $125 per visit, that's $250 million dollars per year in additional income. If an attraction lasts (on average) for 10 years, then you could spend $2.5 billion today in expansion and break even on just the low end of new visitors. If the additional visitors grew at a 6% clip, that's an additional $125 million per year, for a 10 year growth of approximately $1.25 billion dollars. That's a 50% Return on Investment. That's assuming that people don't spend more time at the parks trying to experience the new attractions, driving up the average visit by a day or so, which would add over $1 billion revenue per year (current visit is avg. of 5 days). Over ten years, that is an additional $10 billion in revenue from existing guests, plus $2-4 billion for new visitors. Now your return is $14 billion on a $2.5 billion investment, around a 500% return on investment.

Of course, 6% growth per year would also mean around 90 million total visitors to the park in 10 years.

Disney is totally in a catch-22. I completely believe they need to expand their parks with more attraction to support the guests they currently have, but you can see the quandary they are potentially facing by doing that.

Devli's Advocate:

They made a significant monetary investment in NFL, for MK. Look at resort wide attendance growth. Pretty flat at 2% to 3%. I know, I know...there will now be an argument to the quality and draw of that expansion. That's fine, have at it. My standpoint on that is that it's really irrelevant for the discussion we're having. It's consumer causal, and the executives don't really care because, no matter how "we" judge the quality of the attractions, this is what the company decided to do, and that's a good predictor of what they WOULD decide to do/be able to do, in their minds. The bean counters are weighing ROI, when making these decisions, and aren't going to make the same blue sky "quality" consideration you and I are. NFL didn't seem to spur MORE people to come to WDW. That's what they're going to consider.

Ditto for DCA. In 2012 and 2013, they saw 4%-5% growth, in attendance, at the resort (aka combined DL/DCA attendance). And you saw some pretty remarkable cannibalization of DL's attendance for the sake of DCA's increase (which was acceptable since DL was REALLY over capacity, anyway, prior) in 2012 and 2013. This past year (2014) they were right back to 2.5%....and most of that growth was at DL, NOT DCA. That's after spending 1.1 billion on DCA.

Those two "things" are going to factor in, heavily, in decisions to spend money among the executive(s).

Also,even with your simplified example, there's some issues with your thought process:

1) Keep in mind that those extra 2 million people you mention above incur more overhead, too (though it wouldn't be 2 million...see #3, below).
2) Those new attractions you're talking about aren't "free" to run...it's more than just the sunk costs of building and development. There's additional overhead, staffing, maintenance, etc....and those costs, over time, approach or eclipse the sunk costs. It's like our DVC dues over 50 years.
3) You have to actually subtract out the already projected growth (2% to 3%) from YOUR projected attendance levels, because they're coming no matter what. So for your 4% projection...you're really only adding an additional 1% to 2% to attendance, and in your 6% projection, you're really only adding 3% to 4%.

 

[pilferk]

I agree with you (except that I do NOT want to see Disney get the Marvel characters) but in defense of the topic some of the players have changed. I was there the first time (and others endlessly) but those who hopefully propose this keep changing. I imagine that more will be coming.

Yeah, I know. And there are some familiar faces. It's just funny that, after being gone for a pretty extended time frame, I come back to almost the exact same discussion many of us were having when last I posted.

And yet, nothing has really changed to spur further discussion. We're in exactly the same boat. Heck, if anything, Universal's position has gotten BETTER, since the Marvel properties have gotten even bigger/more popular.

 

[Reddog1134]

LOL, Dan! It just KILLS me. It's the same EXACT conversation. Nothing has changed, on either side. Nobody on the side of "Disney's gonna buy it back" has made a different (or compelling) case as to why it makes fiscal sense. And I've just read 11 pages of conversation remarkably similar conversation to the LAST time I was involved in this.

Would it be cool? Sure. And I'd LOVE to see it happen, provided the funds and resources were dedicated to making it as "cool" as it could be.

But me wanting it to be so, and it being in the best interests of either party (never mind BOTH parties) is a very different thing.

I think people hear about things like the Sony/Marvel Films Spider-Man deal and think "If THAT can happen then THIS can happen".

Could it happen? Sure. But whats to gain from it? They'll spend a small fortune acquiring the rights, then more money (not as much as we would like) to build "Marvel Land" not to mention the cost to maintain it. All for a small bump in attendance.

Or they can sit back and collect checks from Universal.

 

[lockedoutlogic]

Yeah, I know. And there are some familiar faces. It's just funny that, after being gone for a pretty extended time frame, I come back to almost the exact same discussion many of us were having when last I posted.

And yet, nothing has really changed to spur further discussion. We're in exactly the same boat. Heck, if anything, Universal's position has gotten BETTER, since the Marvel properties have gotten even bigger/more popular.

The reality is that they just don't give us that much to talk about...bottomline.

Almost all consumer products rollout new variants or improvements to generate buzz and repeat sales.

Except Disney and Apple.

If you break it down in the case of "new fantasyland"...it was like putting new door handles on a car and trying to highlight them for 10 model years.

Well...the princess meet and greet was in the tent...lets move it over to Snow White... Then lets take Snow White and put a nice, zippy little ride on the front half of the 20,000 lagoon. And then move Ariel's grotto to the back half and add a flat. Then lets move dumbo from the front to next to the circus tent. Then lets move belle from the front of the castle to the back and put in a couple of nice...NOT GREAT...food areas. And that should do it.

I know the point was crowds and a low level refresh...nobody expected 4 high end thrills...they did a reasonably good job with that.

But isn't the bar too low?
Couldn't we get a little more to talk about? So fools can't keep coming on here to suggest that they're gonna pay Comcast 500 mil to break a contract and then spend a billion rebuilding what amounts to the same down the road?

There are other ways out there... Cough... Cough.