More bad news for Disney

[kadesha]

 

[klmorg]

We are going soon....I am starting to get frustrated. On one hand everyone is saying crowds are worse than ever and that worries me as I don't go in the summer just to avoid the terrible crowds. We alway go the last week of March and have always had moderate crowds...Then we have the other side which is that Disney is suffering terribly and having to make job cuts and "is Disney going to lose 'the magic' ".

Is my vacation going to be less than we have become accustomed? Honestly we all go to Disney to completely escape the real world for awhile. I don't mind waiting for a bus or a line that takes 40 minutes(or a little more) so much...but I want 'the magic'!

 

[TDC Nala]

Only two character meals have been "eliminated." That article makes it sound like they're losing character meals all over the place.

 

[dobtia]

My biggest "fear" is not as much those of us who go each year. If the magic slips a bit in hard times, we will be more willing to forgive. We know what it is like with the magic pops. One advantage for us staying off site is that we do not see as many drop off as others.

My bigger "worry" is people like my brother. They are taking their first trip in June. They are staying at the Poly. If they don't feel the magic they might not be as forgiving. They might not be as willing to return. I know repeat business is important, but Disney has to keep building up those first time visitors.

I am going to be optimistic and see a bright rainbow for us all by years end. I would say that I see a light at the end of the tunnel, but it could be a train looking to run us over...

 

[redrosesix]

Actually net profits are what's left after all expenses (including payroll) and capital expeditures are paid. If sales are down and you don't cut these items you will have reduced profits or none at all. You have to take care of all stakeholders; employees, investors, and guests. It's a balancing act for all businesses, not just Disney.

While there may be a difference between Canadian and American accounting practices, I would have assumed that CapX would not be deducted from income to calculate net profits. So, they would be covering all of their costs if net profits were zero (including maintenance) but would have nothing left over to build or refurbish rides.

Also, dividends would be a financing expense, deducted before the profit is shown.

May be a moot point, but I'm just trying to get my head around this argument. I went away for a day and now I'm lost as to who is arguing what

 

[Disney DieHard]

Sorry but I have to agree with the greed thing on this one! A super/mega company like Disney doesn't HAVE TO or isn't being FORCED TO lay off people ... they are CHOOSING TO!

I am a stock holder so I get a financial book of their earnings and things of that nature and Disney is so far into the black it's not even funny!

It's like ExxonMobil saying that profits are down ... they only made 20 Billion instead of 21 Billion ... profits are down but you still made 20 Billion in profits ... so does that justify laying people off? It doesn't in my opinion!

You know, everyone has been crying poverty since 9/11! The airlines, businesses, Disney ... everyone for one reason or another.

But you know what really chaps my *** is that Disney sits there and cries about how their profits are down and fewer people are vacationing because they don't have the money and every other excuse in the world ... BUT they consistently RAISE ticket prices EVERY YEAR!

Fine, don't lower the prices ... heaven forbid ... but is it really necessary to raise them at the same time your saying that fewer people are visiting due to the economy?

Please, don't get me wrong ... I LOVE DISNEY and I wouldn't be on this board if I didn't but Disney is wrong on this one!

 

[redrosesix]

Sorry but I have to agree with the greed thing on this one! A super/mega company like Disney doesn't HAVE TO or isn't being FORCED TO lay off people ... they are CHOOSING TO!

I am a stock holder so I get a financial book of their earnings and things of that nature and Disney is so far into the black it's not even funny!

Poor you! I just read over the WDC Annual Report for 2008 and it's as clear as muck!

With all the companies they own, it's very difficult to decipher anything about the theme parks, especially since much of their trouble with Eurodisney was related to exchange rate changes.

The only conclusion that I could come to was the same as they, and you, did -- they're making lots of money.

 

[WLSILVERCREEKSPRINGS]

While there may be a difference between Canadian and American accounting practices, I would have assumed that CapX would not be deducted from income to calculate net profits. So, they would be covering all of their costs if net profits were zero (including maintenance) but would have nothing left over to build or refurbish rides.

Also, dividends would be a financing expense, deducted before the profit is shown.

May be a moot point, but I'm just trying to get my head around this argument. I went away for a day and now I'm lost as to who is arguing what

There's no argument going on from my side, that's an interesting saying "trying to get my head around this" not sure I understand what that means, although it does conjure up a very bizzare image in my mind.

I'll try to state my point in simple terms. Disney takes in sales, they pay all of their obligations, what is left over is profit. Eventually if there isn't any profit they go out of business; or nowadays they go to Congress and ask the government to give them our money to correct their mismanagement.

Some of the OP are talking about greed; I would call it return on capital. No different than individuals wanting the best interest rate on a CD or getting cheaper Disney tickets.

 

[DisneyBamaFan]

Businesses have to have the right number of employees to handle the workload. It doesn't matter what business you are in - the principle is the same. So, when there are fewer guests, there is less work to be done, and there is less money coming in the door to pay the employees.

Companies that take too long to react to a change in demand end up out of business. Disney is "right sizing" its work force now to avoid a catastrophe later. In the end, this philosophy will save jobs...

 

[WLSILVERCREEKSPRINGS]

Sorry but I have to agree with the greed thing on this one! A super/mega company like Disney doesn't HAVE TO or isn't being FORCED TO lay off people ... they are CHOOSING TO!

I am a stock holder so I get a financial book of their earnings and things of that nature and Disney is so far into the black it's not even funny!

It's like ExxonMobil saying that profits are down ... they only made 20 Billion instead of 21 Billion ... profits are down but you still made 20 Billion in profits ... so does that justify laying people off? It doesn't in my opinion!

You know, everyone has been crying poverty since 9/11! The airlines, businesses, Disney ... everyone for one reason or another.

But you know what really chaps my *** is that Disney sits there and cries about how their profits are down and fewer people are vacationing because they don't have the money and every other excuse in the world ... BUT they consistently RAISE ticket prices EVERY YEAR!

Fine, don't lower the prices ... heaven forbid ... but is it really necessary to raise them at the same time your saying that fewer people are visiting due to the economy?

Please, don't get me wrong ... I LOVE DISNEY and I wouldn't be on this board if I didn't but Disney is wrong on this one!

I'm a shareholder also; it's my way of getting some of what I spend with Disney returned to me. But it means that we are also responsible for them cutting back and laying people off from their jobs so that we can get a return on our investment!

 

[redrosesix]

I'll try to state my point in simple terms. Disney takes in sales, they pay all of their obligations, what is left over is profit. Eventually if there isn't any profit they go out of business; or nowadays they go to Congress and ask the government to give them our money to correct their mismanagement.

Well...the weird thing about the economic troubles right now is that businesses will not be rewarded if they say they are "doing just fine". It's happening here now, too. If they are in so much trouble that they have to lay off employees and delay CapX, they get help. The WD corp may have a lot of problems in some of their companies (I can imagine Estee Lauder sales will be down, and I can't imagine how the cruise business will be with all of the retirees losing buckets of money in their pension funds) but from the Annual Report, it appears like they're doing alright.

Good investment I would even consider it if the exchange rate risk wasn't so great for me.

 

[CarolA]

One thing to take note of, this report says that PROFITS are down.

Payroll, maintenance, expenses etc all come out before PROFITS. So laying people off and cutting back services is all about GREED. Yes they have stock holders to answer to, but they also have their employees and guests to answer to.

God forbid Disney do what's necessary to make money. After all Disney should LOSE money???

I guess its GREEDY to not want my tax dollars to bail out those business who FAILED to plan for downturns! SORRY! BUT I AM ALL FOR GREED if it means that Disney isn't pulling a GM "we never saw the day Americans wouldn't want to drive a HUMMER to work"


GOOD GRIEF I guess what all of you do in your personal life is just spend EVERY PENNY you make. There's not need to put any of that PROFIT away in case you have to take a pay cut, I mean that's GREEDY! There's no need to put any money away because you can tell that this summer you might have less income! That's GREEDY! Planning ahead is BAD! Spend it all right now, it's OK Maybe the Goverment will bail you out!



But companies pay TAXES on profits and sadly your goverment needs them to MAKE money so they can pay taxes for that bail out for those other companies who never seemed to think the environment would change!


So those of you who think profits are "GREEDY" you do spend every petty don't you? I mean you make sure your INCOME is all spent on expenses so you don't have a profit? RIGHT?

 

[loonytoony]

God forbid Disney do what's necessary to make money. After all Disney should LOSE money???

I guess its GREEDY to not want my tax dollars to bail out those business who FAILED to plan for downturns! SORRY! BUT I AM ALL FOR GREED if it means that Disney isn't pulling a GM "we never saw the day Americans wouldn't want to drive a HUMMER to work"


GOOD GRIEF I guess what all of you do in your personal life is just spend EVERY PENNY you make. There's not need to put any of that PROFIT away in case you have to take a pay cut, I mean that's GREEDY! There's no need to put any money away because you can tell that this summer you might have less income! That's GREEDY! Planning ahead is BAD! Spend it all right now, it's OK Maybe the Goverment will bail you out!



But companies pay TAXES on profits and sadly your goverment needs them to MAKE money so they can pay taxes for that bail out for those other companies who never seemed to think the environment would change!


So those of you who think profits are "GREEDY" you do spend every petty don't you? I mean you make sure your INCOME is all spent on expenses so you don't have a profit? RIGHT?

This is true

 

[DaveStroem]

I am in no means saying that profits are a bad thing. But cutting corners and cutting jobs that will significantly effect your product just to maintain higher profits IMHO is a bad move.

This is why we now settle for so much junk in our lives. We live in a disposable community were we just replace one piece of carp with another instead of purchasing a higher quality product to start off with. It is harder and harder to purchase quality, be it furniture, clothing or vacations.

Isn't the quality of the experience what separates Disney from Six Flags and the rest?

 

[bosox57]

The economy is hitting all the businesses hard. This too will pass.

 

[Goofy'slady]

No ofense but aren't we all tired of coming to these threads every single day and talking doom and gloom and trying to sound like we're the experts? I'm not saying that the occassional economic tread is bad(please go back and re-read what I just said) but come on now this is a message board that is primarily here to help us plan our vacation. I know that some of this stuff is informative and helps us see just what's happening but like I've said this before it's happening everywhere not just Disney. People are fainting out of fear and plain 'ol don't know what to do and there's a small portion of folks on this boards who is obssessed with posting nothing but bad news and it's something that is on here every single day. We can't control the economic practices of Disney or any other company for that matter. If you want to talk economics, money, business and bailouts there is a board on the Disboards called the Budget boards, this type of post will fit in just fine there, that's all they talk about all day long and this one entitled Theme Parks Attractions and Strategies should be left to help those who have trips in the works to plan so accordingly.

T.

Ps-know that I'm not trying to be nasty so keep any flaming comments clean.

 

[redrosesix]

God forbid Disney do what's necessary to make money. After all Disney should LOSE money???

I guess its GREEDY to not want my tax dollars to bail out those business who FAILED to plan for downturns! SORRY! BUT I AM ALL FOR GREED if it means that Disney isn't pulling a GM "we never saw the day Americans wouldn't want to drive a HUMMER to work"


GOOD GRIEF I guess what all of you do in your personal life is just spend EVERY PENNY you make. There's not need to put any of that PROFIT away in case you have to take a pay cut, I mean that's GREEDY! There's no need to put any money away because you can tell that this summer you might have less income! That's GREEDY! Planning ahead is BAD! Spend it all right now, it's OK Maybe the Goverment will bail you out!



But companies pay TAXES on profits and sadly your goverment needs them to MAKE money so they can pay taxes for that bail out for those other companies who never seemed to think the environment would change!


So those of you who think profits are "GREEDY" you do spend every petty don't you? I mean you make sure your INCOME is all spent on expenses so you don't have a profit? RIGHT?

Just an observation: I think that much of the criticism re WDC has to do with how it runs the theme parks, the subject of the DIS forums. According to its own annual report, WDW and DL are doing ok. WDC is not just about North American theme parks though, so its financial stability is dependent on a lot of other areas.

 

[ShannonMB]

Is my vacation going to be less than we have become accustomed? Honestly we all go to Disney to completely escape the real world for awhile. I don't mind waiting for a bus or a line that takes 40 minutes(or a little more) so much...but I want 'the magic'!
__________________

I just returned from my trip last week, and all I can say is that the magic was still alive and well for me! I actually had less issues with the busses than on our previous trip, our room was sparkling clean, and with a good plan/FP/arriving early, we did not suffer undue waits for anything. DD and I had the time of our lives, and can't wait to return.

Hope everyone's trips are just as magical, in spite of the current scary economic news!

 

[CanadianGuy]

Moving to the News & Rumors Board.

 

[Mouseaholic!!!]

Sorry but I have to agree with the greed thing on this one! A super/mega company like Disney doesn't HAVE TO or isn't being FORCED TO lay off people ... they are CHOOSING TO!

I am a stock holder so I get a financial book of their earnings and things of that nature and Disney is so far into the black it's not even funny!

It's like ExxonMobil saying that profits are down ... they only made 20 Billion instead of 21 Billion ... profits are down but you still made 20 Billion in profits ... so does that justify laying people off? It doesn't in my opinion!

You know, everyone has been crying poverty since 9/11! The airlines, businesses, Disney ... everyone for one reason or another.

But you know what really chaps my *** is that Disney sits there and cries about how their profits are down and fewer people are vacationing because they don't have the money and every other excuse in the world ... BUT they consistently RAISE ticket prices EVERY YEAR!

Fine, don't lower the prices ... heaven forbid ... but is it really necessary to raise them at the same time your saying that fewer people are visiting due to the economy?

Please, don't get me wrong ... I LOVE DISNEY and I wouldn't be on this board if I didn't but Disney is wrong on this one!

There is one element we have not considered...and far more frightening.

Yes, it's painful to live through the cutbacks and layoffs - DH knows this personally......but.....what if what's coming is WORSE.

What if.....what if......all of these measures are being done NOW because the bean counters at Disney - looking forward at advance reservations -- realize that if they do not CUT NOW, the next quarter or two will reflect a LOSS in profits?

Disney bean counters are always looking ahead. They have been slowing cuttng back since mid 2008. What if what they are seeing on the horizion is so bad, they are preparing now.

Most of these threads began after the results of last quarter. Doesn't the next quarter end March 31 ? Last time we found out guests were spending 53% of what they did the same dates in 2007. What if that number drops again?

The bottom line.....is the bottom for line for ANY business.