Paranoid or Chapek just being "Lex"?

[ForceofWill]

From the recent earnings call:

Christine McCarthy -- Senior Executive Vice President and Chief Financial Officer
OK. And before I talk about capex, I just want to say, from my perspective, the Parks management team has done an outstanding job addressing cost structure. Of course, variable costs will come back in as we ramp up operations, but they've really looked at the way they're doing business, and it's really been quite impressive. So I just want to add that to what Bob has already said.
As it relates to capex, last earnings call, we had said that we expected capex to be up from last year. I think the number was 550 million. But now, we're expecting it to be relatively flat. What we have here is a couple of dynamics.
We'll have increased spending at DMED and corporate, but we're going to have reduced spending at Parks. Some of the DMED spending is going to be on things like technology, in infrastructure investments related to the launch of Star, and DPEP at our parks business. Obviously, the reason that the capex is slowing is because some of the parks are closed, and we've chosen to slow spending there.


So I see the qualifier at the end of her statement there but I just don't know how much I believe it. Anyone else feel Chapek is using all this as an excuse to cut funding to the parks and move it towards all their streaming/media side of the business? We're already seeing it with Magical Express, EMH and such, none of which have anything to do with spending at parks that are closed.

 

[Eric Smith]

I don’t think it’s an excuse, it’s the reason that they’re cutting spending on the parks. The parks are still losing money overall so it makes sense to cut spending there. It seems they also expect that travel won’t just bounce back. The streaming side is booming right now so it makes sense that Disney would invest there.

 

[Missingmypooh]

The president of DL did an interview and straight up said that the park being closed was the perfect time to reimagine things, and that things would be noticeably different when they returned.

chapek and team are absolutely using the pandemic to their advantage to reduce the variable costs and hopefully increase guest satisfaction (less crowding, lower waits, quicker food, less locals).

Disney knows exactly what people were complaining about before hand (crowds/wait times and rude guests were the very top of the list).
It’s becoming more and more clear that Disney’s target audience is not the diehards, but the once every 5 years mega spenders. The “once in a lifetimers” and the big DVC spenders (tho they’ve bungled the dvc imho). The international travelers that want every bell and whistle for the two week stay

Income diversification at the park level means that we’ll still have APs and Florida resident deals, but those will be geared towards lower crowd times like January and September.


so yes, I’d expect even more changes, from the reduction of travel agents, to changes in character availability, to more exclusive resort based amenities, and changes in ticketing and dining plans. we’ve already seen the cutting of some programs geared towards the ‘once every year’ crowd, reduction in food portion sizing, significant entertainment and massive layoffs in customer service. How many of those jobs come back, and how many are replaced by new technology, will be an interesting profit point in the future.

 

[hertamaniac]

I don't recall hearing any mention on the progress of Tron in the call (but the other attractions were). I don't know if it was an oversight or a much longer timeline.

 

[JC1984]

I don't recall hearing any mention on the progress of Tron in the call (but the other attractions were). I don't know if it was an oversight or a much longer timeline.

Yeah I don’t think there was. I think TRON will be a 2022...maybe a 2023 for the Disney 100th celebration.

 

[ford91exploder]

The president of DL did an interview and straight up said that the park being closed was the perfect time to reimagine things, and that things would be noticeably different when they returned.

chapek and team are absolutely using the pandemic to their advantage to reduce the variable costs and hopefully increase guest satisfaction (less crowding, lower waits, quicker food, less locals).

Disney knows exactly what people were complaining about before hand (crowds/wait times and rude guests were the very top of the list).
It’s becoming more and more clear that Disney’s target audience is not the diehards, but the once every 5 years mega spenders. The “once in a lifetimers” and the big DVC spenders (tho they’ve bungled the dvc imho). The international travelers that want every bell and whistle for the two week stay

Income diversification at the park level means that we’ll still have APs and Florida resident deals, but those will be geared towards lower crowd times like January and September.


so yes, I’d expect even more changes, from the reduction of travel agents, to changes in character availability, to more exclusive resort based amenities, and changes in ticketing and dining plans. we’ve already seen the cutting of some programs geared towards the ‘once every year’ crowd, reduction in food portion sizing, significant entertainment and massive layoffs in customer service. How many of those jobs come back, and how many are replaced by new technology, will be an interesting profit point in the future.

I think ‘not replaced at all’ is what the suits want, they neither understand nor care that themed entertainment is an art form.

Disneyland and WDW for decades set the standard for themed entertainment.

Meanwhile the cost accountants who Walt Disney called ‘the sharp pencil boys’ wanted to cut all this ‘useless and wasteful’ theming.

Their thought is imagine the money we can make if we have the six flags cost model and the Disney ‘brand’.

what management thinks is Disney is an aspirational ‘brand’ like Coach or Prada or Jimmy Choo so customers will stream in no matter what the product is. And disney shows its ignorance by removing ‘Walt Disney’ from public view so its just a brand not a person who reimagined entertainment and gave us fans things we did not even know we wanted to buy till we saw them.

the reality is the experiences guests once took for granted created the Disney brand and people come to relive the experiences.

i dont think anyone is gonna like what happens next, Disney is likely to have a new coke moment and do they do the intelligent thing or double down on the ‘new’ coke which wins in surveys but is a market FAIL

 

[Eric Smith]

I think ‘not replaced at all’ is what the suits want, they neither understand nor care that themed entertainment is an art form.

Disneyland and WDW for decades set the standard for themed entertainment.

Meanwhile the cost accountants who Walt Disney called ‘the sharp pencil boys’ wanted to cut all this ‘useless and wasteful’ theming.

Their thought is imagine the money we can make if we have the six flags cost model and the Disney ‘brand’.

what management thinks is Disney is an aspirational ‘brand’ like Coach or Prada or Jimmy Choo so customers will stream in no matter what the product is. And disney shows its ignorance by removing ‘Walt Disney’ from public view so its just a brand not a person who reimagined entertainment and gave us fans things we did not even know we wanted to buy till we saw them.

the reality is the experiences guests once took for granted created the Disney brand and people come to relive the experiences.

i dont think anyone is gonna like what happens next, Disney is likely to have a new coke moment and do they do the intelligent thing or double down on the ‘new’ coke which wins in surveys but is a market FAIL

What theming is Disney cutting out? The new lands they’ve built in the parks have the best theming they’ve done so far and it’s only matched by the Wizarding World at Universal.

Disney is cutting spending right now because their theme park segment got hammered by COVId along with DCL and ABD. They’re still losing money on the parks right now and they’re not going to let that go on forever. As the restrictions are eased and they’re able to get more people back in the parks, things will come back. Everything that was cut won’t come back, but the lion’s share will. There will undoubtedly be new things introduced as well. The rest of the theme park industry is doing the same thing.

I’m not sure what you mean by taking Walt out of the public eye. I’m in my mid-30s and I’ve never seen anything about Walt come directly from Disney. That’s not a new thing. I don’t think they used Walt heavily after he passed away.

 

[ford91exploder]

What theming is Disney cutting out? The new lands they’ve built in the parks have the best theming they’ve done so far and it’s only matched by the Wizarding World at Universal.

Disney is cutting spending right now because their theme park segment got hammered by COVId along with DCL and ABD. They’re still losing money on the parks right now and they’re not going to let that go on forever. As the restrictions are eased and they’re able to get more people back in the parks, things will come back. Everything that was cut won’t come back, but the lion’s share will. There will undoubtedly be new things introduced as well. The rest of the theme park industry is doing the same thing.

I’m not sure what you mean by taking Walt out of the public eye. I’m in my mid-30s and I’ve never seen anything about Walt come directly from Disney. That’s not a new thing. I don’t think they used Walt heavily after he passed away.

Find an old copy of the Lion King or any other classic movie. The title splash will be ‘Walt Disney’ Productions. Now grab a new copy of same movie it says ‘Disney’ nothing more.

The sign on the main st railroad station was changed to remove walt from the sign.

Considering that trains were walt’s thing. Thats a pretty bad case of ‘damniato memoriae’ right there google it, Its like pharaoh’s hammering out their predecessors cartouches.

All marks of small men who feel their achievements will not get proper credit unless all those who came before are taken down a few notches.

 

[Eric Smith]

Find an old copy of the Lion King or any other classic movie. The title splash will be ‘Walt Disney’ Productions. Now grab a new copy of same movie it says ‘Disney’ nothing more.

The sign on the main st railroad station was changed to remove walt from the sign.

Considering that trains were walt’s thing. Thats a pretty bad case of ‘damniato memoriae’ right there google it, Its like pharaoh’s hammering out their predecessors cartouches.

All marks of small men who feel their achievements will not get proper credit unless all those who came before are taken down a few notches.

Those both seem incredibly minor.

 

[ford91exploder]

Those both seem incredibly minor.

Individually yes they are, but as parts of a wider pattern they point to an incredibly destructive thought process. At animal kingdom no longer favored executives are photoshopped out of groundbreaking and opening day pictures, Which notably was exactly what the Soviet Union did when leaders fell out of favor. Not a healthy way of thinking.

 

[SaintsManiac]

Individually yes they are, but as parts of a wider pattern they point to an incredibly destructive thought process. At animal kingdom no longer favored executives are photoshopped out of groundbreaking and opening day pictures, Which notably was exactly what the Soviet Union did when leaders fell out of favor. Not a healthy way of thinking.

 

[RamblingMad]

During the last recession the parks didn’t even have proper upkeep. There were lots of Disney blogs point out how run down they looked. We should expect to see the same thing happen now.

 

[Eric Smith]

During the last recession the parks didn’t even have proper upkeep. There were lots of Disney blogs point out how run down they looked. We should expect to see the same thing happen now.

So far it seems like the exact opposite of that. When we were there in December, we saw tons of maintenance being done on the parks and the resorts. I've never noticed that before.

 

[OSUZorba]

I think ‘not replaced at all’ is what the suits want, they neither understand nor care that themed entertainment is an art form.

Disneyland and WDW for decades set the standard for themed entertainment.

Meanwhile the cost accountants who Walt Disney called ‘the sharp pencil boys’ wanted to cut all this ‘useless and wasteful’ theming.

Their thought is imagine the money we can make if we have the six flags cost model and the Disney ‘brand’.

what management thinks is Disney is an aspirational ‘brand’ like Coach or Prada or Jimmy Choo so customers will stream in no matter what the product is. And disney shows its ignorance by removing ‘Walt Disney’ from public view so its just a brand not a person who reimagined entertainment and gave us fans things we did not even know we wanted to buy till we saw them.

the reality is the experiences guests once took for granted created the Disney brand and people come to relive the experiences.

i dont think anyone is gonna like what happens next, Disney is likely to have a new coke moment and do they do the intelligent thing or double down on the ‘new’ coke which wins in surveys but is a market FAIL

You make some fair points. But they just opened the most themed land anywhere with the absolutely most immersive and themed ride ever. This is on top of the highly themed Pandora and Toy Story lands.

They are getting away from live entertainment and original themes/stories in the parks, but they aren't getting away from theming at all. There is no comparison between what they have done in the last 5 years and six flags.

 

[MickeyWaffles]

I think ‘not replaced at all’ is what the suits want, they neither understand nor care that themed entertainment is an art form.

Disneyland and WDW for decades set the standard for themed entertainment.

Meanwhile the cost accountants who Walt Disney called ‘the sharp pencil boys’ wanted to cut all this ‘useless and wasteful’ theming.

Their thought is imagine the money we can make if we have the six flags cost model and the Disney ‘brand’.

What are you talking about?

There is absolutely nothing Six Flags about ANY of these things:

Seven Dwarves Mine Train/Fantasyland expansion
Pandora
Toy Story Land
Galaxy’s Edge
Mickey & Minnie’s Runaway Railway
Ratatouille

Once someone on here who hadn’t been to Toy Story land was griping about Slinky being an exposed coaster and compared it to Six Flags. Completely ignoring the fact that Slinky is an important part of the theming of TSL. Seeing Slinky racing around is integral to the feeling of being in Andy’s backyard. It is clear that anyone comparing this stuff to Six Flags has never actually been to a Six Flags.

 

[OSUZorba]

What are you talking about?

There is absolutely nothing Six Flags about ANY of these things:

Seven Dwarves Mine Train/Fantasyland expansion
Pandora
Toy Story Land
Galaxy’s Edge
Mickey & Minnie’s Runaway Railway
Ratatouille

Once someone on here who hadn’t been to Toy Story land was griping about Slinky being an exposed coaster and compared it to Six Flags. Completely ignoring the fact that Slinky is an important part of the theming of TSL. Seeing Slinky racing around is integral to the feeling of being in Andy’s backyard. It is clear that anyone comparing this stuff to Six Flags has never actually been to a Six Flags.

Yeah, when you go through the queue for SDD it is extremely easy to imagine that it actually is a toy. Every time, I am disappointed that I can't buy it from K'nex.

I got to Six Flags parks 20+ times a year, anyone that says Disney is headed towards Six Flags on theming or ride types haven't actually been to Six Flags or Disney for 20 years.

 

[AvidDisReader]

Let me say when it was first announced Chapek was taking over, I was disappointed as he was known as a bean counter. That being said, to keep everything afloat I understand the need to cut back significantly, after all even with the cutback the Theme Parks Lost money in the last quarter. That being said it just is not fair to judge Chapek at this time (like trying to criticize a new coach taking over mid year on a last place team and getting angry because your team is still losing). He is trying to manage with 2 of his biggest business segments (movies and theme parks) handicapped by the Pandemic. Now once things open up and there are still ongoing cutbacks or low re investment in the parks, I will be the first to offer criticism.

 

[PlutoTheDog89]

As CEO, it's Chapek's job to fall on the sword and keep the shareholders and board members happy. Imagine you owned a large stake in Disney during the pandemic and he announced "we're going to keep sinking money into the parks" during a pandemic when the parks are known to not be doing well.

I don't think this means we're going to visit and there's gonna be trash all over the place or that entertainment will never return. I think Disney will seriously contemplate changes at the parks before updating or adding anything. Don't count on many or any new resorts or attraction announcements in the next few years. But the existing projects should be completed (even if the deadline is pushed)

 

[Jrb1979]

Let me say when it was first announced Chapek was taking over, I was disappointed as he was known as a bean counter. That being said, to keep everything afloat I understand the need to cut back significantly, after all even with the cutback the Theme Parks Lost money in the last quarter. That being said it just is not fair to judge Chapek at this time (like trying to criticize a new coach taking over mid year on a last place team and getting angry because your team is still losing). He is trying to manage with 2 of his biggest business segments (movies and theme parks) handicapped by the Pandemic. Now once things open up and there are still ongoing cutbacks or low re investment in the parks, I will be the first to offer criticism.

I'm guessing you don't buy it when many have said that a lot of the cuts were planned before Covid. Covid gave them a reason to do it quicker

 

[Pages26]

Find an old copy of the Lion King or any other classic movie. The title splash will be ‘Walt Disney’ Productions. Now grab a new copy of same movie it says ‘Disney’ nothing more.

The sign on the main st railroad station was changed to remove walt from the sign.

Considering that trains were walt’s thing. Thats a pretty bad case of ‘damniato memoriae’ right there google it, Its like pharaoh’s hammering out their predecessors cartouches.

All marks of small men who feel their achievements will not get proper credit unless all those who came before are taken down a few notches.

Its possible Disney are future proofing by slowly dissociating the business from Walt on the quiet.

Over the last few years we have seen inappropriate behaviour from past come out for number of famous men of that era.

Not suggesting Walt was like that at all, but by removing his 1st name from branding makes it far easier if any milicious rumors/accusations come out i.e it it wouldn't be appropriate having his full name on everything and would be a nightmare to rebrand everything in short space of time. Guaranteed this would of been discussed at board level in matters regarding to risk avoidance and branding.

Also regardless of risk management above, we are getting to the point that a significant amount of the market don't know anything about how Walt build the parks or even care.

The younger generation don't care about who or how parks and company developed and just enjoy watching the films and going to the parks.

The slow rebranding is the company trying to appeal to the customers of the future . I.e teens/young adults more likely to mention to peers how good Disney+ is than how they been watching Walt Disney+