new blog: Avengers and Theme Park Investments Lead “Phenomenal” Results for Disney

[LeahZ]

http://www.disunplugged.com/2012/08...vestments-lead-phenomenal-results-for-disney/

 

[OKW Lover]

Glad to hear that Disney had a very good quarter.
As a shareholder I'm really happy. As a customer I'm really happy.

Now let me get my soap box out.
Businesses exist to make a profit.
Some people will see the size of this profit and say things like "they should lower their prices", or "they should pay better", or "they shouldn't cut (fill in the blank) because I loved that".
Keep in mind that without profit there will be no dividends (or stock price growth) to keep the shareholders happy.
Without profit there will be no money for future investments to keep the customers happy.

I've just been reading the comments on the Orlando Sentinel site concerning this story and its really sad that so many people do not understand how this all works.
OK, time to step down off the soap box.

Way to go Disney!!!!

 

[jcb]

Glad to hear that Disney had a very good quarter.
As a shareholder I'm really happy. As a customer I'm really happy.

Now let me get my soap box out.
Businesses exist to make a profit.
Some people will see the size of this profit and say things like "they should lower their prices", or "they should pay better", or "they shouldn't cut (fill in the blank) because I loved that".
Keep in mind that without profit there will be no dividends (or stock price growth) to keep the shareholders happy.
Without profit there will be no money for future investments to keep the customers happy.

I've just been reading the comments on the Orlando Sentinel site concerning this story and its really sad that so many people do not understand how this all works.
OK, time to step down off the soap box.

Way to go Disney!!!!

Jeff, Jeff, Jeff,

Your mistake was reading comments on a newspaper's website.

Disney's issue is in balancing shareholder returns against guest demand. And so far, they have succeeded from both perspectives. Share prices reflect that many think Disney is a good investment, even with its capital expenditures) and guest demand for Theme Park style entertainment remains quite strong even after Disney "weaned" guests off of the heavy discounts offered in 2008 and 2009.

But what will be interesting to me is how strong guest demand will be once the current phase of domestic capital projects is over. I don't expect a huge dip (ala Pete and Harry Potter). Still, I think it would be a mistake to assume that guest demand for Disney's domestic Theme Parks will continue to grow once the excitement of the Dream/Fantasy, Fantasyland and Carsland wears off. (Disney does not consider Avatar as a huge capital investment. In May, Rasulo said it was "more in the sort of normal course of business for us.")

Even if Comcast were not investing heavily in Orlando, and it is, I suspect Disney will need to continue to invest in the domestic theme parks if it wants to keep the current pricing structure (i.e., no deep discounts).

Rasulo's past comments make me wonder whether he gets this. Putting all your future CapEx in Shanghai Disneyland (which won't open until about 2016) seems pretty short-sighted and may explain why Iger started the call with comments about the recent capital expenditures which have or soon will come to fruition.

 

[OKW Lover]

Jeff, Jeff, Jeff,

Your mistake was reading comments on a newspaper's website.

Guilty. I know better than that.