Record profits...where's the reinvestment?

[Davey Jones II]

So Disney announced record grosses of a billion per month from the theme park division, for over $600 million in profits in the last quarter. They also said that they spent $539 million in capital investments for theme parks during that quarter.

So how come that money seems to disappear without a trace? Surely not all of it went into Avatar and the Mine Train ride.

I suppose a lot of it is going into the My Magic+ black hole, and another big chunk into developing Shanghai Disneyland (for example, how much does it cost to provide air pollution masks to all the construction workers? That must be a small fortune). Why do they keep building new parks while only adding to their existing parks at a glacial pace? Every new state-side park since Epcot opened as a half-day experience (Animal Kingdom, DHS) or a cheap disappointment (DCA). The company had a responsibility to add capacity to those parks before going off on overseas construction binges.

I think Universal is getting more praise because they have their priorities straight. They are building more cutting edge rides, not squandering zillions on a whiz bang glorified reservation system. They are expanding their existing parks, not building more malnourished gates overseas.

I'm a huge Disney fan, and that is why Disney keeps disappointing me. I keep hoping they will live up to the standards of their founder, who performed miracles on a shoestring. By contrast, today the WDC does the minimum, with more money than King Croesus.

 

[MrInfinity]

California Adventure revamped, Radiator Springs Racers
Magic Kingdom revamped, new Storybook Circus, new Enchanted Forest, new ETWB, new BOG, new Ariel's, new SDMT (2014)
Animal Kingdom revamped, new 1/4 of the park for Pandora 2016
HK Disney revamped, new 1/4 of the park for Toy Story
New FastPass system
New MDE App
New Art of Animation Resort catering to families of 6
And I'm guessing, HS revamped 2018 in time with the first movie of a new SW Trilogy.

I'd say that's a lot of new stuff for oh... 2 years.

 

[wisblue]

A not insignificant portion of the company's operating profit goes to pay shareholder dividends. Those dividends are almost $1.5 billion per year.

And, saying that Disney has a responsibility to upgrade existing parks in the US before adding new parks overseas is really pretty absurd. There would seem to be a lot of potential profit in developing entirely new markets, and the company would be remiss in not trying to take advantage of them.

 

[catne]

Yep, lots of reinvestment going on. It may not be the re-investment you would prefer, but it has certainly been going on for some time, even during the depths of the recent economic downturn Disney managed to keep some of the new stuff on track. It's not Harry Potter, you're right. But it IS classic Disney; especially in the New Fantasyland and Storybook Circus areas. They did improve some rides in the course of re-hab (like doubling the Dumbo ride so it loads much faster, and making all the variations on Star Tours.) They've also added some restaurants here & there, re-done others, as well as re-decorated several resorts (some to add themed rooms like the Royal rooms at POR and the Pirate rooms a Caribbean Beach Resort)

Also add all the resort building going on in the form of additional DVC...Bay Lake Tower at the Contemporary and Grand Floridian DVC completed within the last few years. And now extensive building/re-design going on at the Polynesian resort to add DVC buildings there. And, massive building going to happen at Downtown Disney...already increasing infrastructure there (new parking garage) and soon to be many more shops and restaurants.

As for record profits: it is a business after all. And the stockholders are applauding record profits.

 

[Davey Jones II]

California Adventure revamped, Radiator Springs Racers
Magic Kingdom revamped, new Storybook Circus, new Enchanted Forest, new ETWB, new BOG, new Ariel's, new SDMT (2014)
Animal Kingdom revamped, new 1/4 of the park for Pandora 2016
HK Disney revamped, new 1/4 of the park for Toy Story
New FastPass system
New MDE App
New Art of Animation Resort catering to families of 6
And I'm guessing, HS revamped 2018 in time with the first movie of a new SW Trilogy.

I'd say that's a lot of new stuff for oh... 2 years.

The DCA revamp, including Cars Land, was completed in 2012, and has nothing to do with the most recent reported quarter. The Art of Animation Resort also opened almost two years ago.

The Magic Kingdom revamp was budgeted and paid for a long time ago, too. There have been no announcements of any Star Wars additions to DHS, so yes, that is just a guess, and has nothing to do with the latest quarter, either.

So aside from Avatar and improvemetns to HKDL (which most of us will never visit), there is very little actual improvements to the infrastructure of the parks (i.e., rides, attractions, lands). And yes, I know they are spending on MyMagic+...that's part of the problem! Their priorities are screwed up. How about giving the fans and guests what they really want?

 

[DividedSky]

perhaps you just don't know what reinvestment means, but money spent on mymagic+ is a reinvestment.

/end thread

 

[ChipnDale79]

Disney simply just isnt going to do pump real money into US parks anymore.

Let's ask this question, how many people are jumping up and down saying they want to go to WDW simply because of MM+?

 

[Davey Jones II]

A not insignificant portion of the company's operating profit goes to pay shareholder dividends. Those dividends are almost $1.5 billion per year.

And, saying that Disney has a responsibility to upgrade existing parks in the US before adding new parks overseas is really pretty absurd. There would seem to be a lot of potential profit in developing entirely new markets, and the company would be remiss in not trying to take advantage of them.

Their overseas adventures have not always been such hot investments. EuroDisney/Disneyland Paris has been a financial failure from day one. Hong Kong Disney is tiny, barely a one-day park. Tokyo Disney is a huge success, but only because the Oriental Land Company invested all the money necessary to do it right, and fittingly, the WDC only gets a small share of those profits. As for Shanghai Disneyland, who knows? The air pollution problem could prove a big handicap for that new park.
Meanwhile, some people still say that Animal Kingdom is a half-day park. They should have expanded it a long time ago. We still have to wait til 2017-18 for that park to (hopefully) reach its potential. DHS still has too many (aging) shows and too few rides. Epcot has shuttered pavillions, some very lame attractions, and the World Showcase needs more rides.

All this money flooding the company is coming from us, the fans and guests. Why shouldn't we have the right to ask them to give us more of what we want? When they spend $1.5 billion of the money we gave them and waste it on a new reservation system instead of new attractions, I feel we have been short changed. Have you seen the poll on this site, in which over 91% of respondents would have preferred to see that money go into two new expansions? (http://www.disboards.com/showthread.php?t=3231102)

I don't think I'm in the minority.

 

[FLchick415]

Correct me if I'm wrong (and I'm not trying to be rude or sarcastic here, this is an honest question) but isn't the budget for attractions & such separate from the budget that was used for MM+?

 

[Davey Jones II]

perhaps you just don't know what reinvestment means, but money spent on mymagic+ is a reinvestment.

/end thread

It's a lousy reinvestment. I refer you again to this thread: http://www.disboards.com/showthread.php?t=3231102

And lots of other threads expressing disappointment in the MyMagic+ debacle, on this and other sites.

 

[DOOM1001]

perhaps you just don't know what reinvestment means, but money spent on mymagic+ is a reinvestment.

/end thread

True,but not the reinvestment people would prefer to see.

 

[maxiesmom]

All this money flooding the company is coming from us, the fans and guests. Why shouldn't we have the right to ask them to give us more of what we want? When they spend $1.5 billion of the money we gave them and waste it on a new reservation system instead of new attractions, I feel we have been short changed. Have you seen the poll on this site, in which over 91% of respondents would have preferred to see that money go into two new expansions? (http://www.disboards.com/showthread.php?t=3231102)

I don't think I'm in the minority.

I think you might be. Spending money at any place of business does not give you the right to tell them how to run that business, or where they are allowed to spend their money.

You can for sure write them and let them know what you would like to see in the parks. But to get all upset because they are not doing what you want them to do? Nope. That is kind of silly. Maybe I am writing them and wanting something that is totally opposite of what you want. What should they do then? And maybe catne wants something totally different from what either of us wants. You have to let the people in charge run the business. That is their job.

 

[heyitsmejosh]

what do you call avatar land?

 

[Davey Jones II]

Disney simply just isnt going to do pump real money into US parks anymore.

Let's ask this question, how many people are jumping up and down saying they want to go to WDW simply because of MM+?

*crickets*

Not too many people, ChipnDale. But new attractions, new lands? People plan whole vacations around those. That's what happens when the company adopts our priorities.

 

[ChipnDale79]

what do you call avatar land?

A project that was announced 2.5 years ago and is still 3 or 4 years away from being complete.......

 

[ChipnDale79]

*crickets*

Not too many people, ChipnDale. But new attractions, new lands? People plan whole vacations around those. That's what happens when the company adopts our priorities.

All you gotta do is look at Carsland, and the point you just made is proved.

 

[Davey Jones II]

I think you might be. Spending money at any place of business does not give you the right to tell them how to run that business, or where they are allowed to spend their money.

You can for sure write them and let them know what you would like to see in the parks. But to get all upset because they are not doing what you want them to do? Nope. That is kind of silly. Maybe I am writing them and wanting something that is totally opposite of what you want. What should they do then? And maybe catne wants something totally different from what either of us wants. You have to let the people in charge run the business. That is their job.

Again, take a look at that poll I referenced above and tell me I'm in the minority. Count how many "pro-MM" threads there are, compared to the ones started by people who are unhappy with how the company reinvests profits. So far, there are very few of the former.

You want to claim, with a straight face, that most Disney guests would prefer new reservation systems over new and plussed attractions and lands? Why do people go to theme parks, anyway? To tinker with a reservation system or to enjoy everything that park has to offer? Reservations are just a means to that end.

Yes, they are running a business. A big part of doing that is to listen to your customers and give them what they want.

 

[OKW Lover]

So Disney announced record grosses of a billion per month from the theme park division, for over $600 million in profits in the last quarter. They also said that they spent $539 million in capital investments for theme parks during that quarter.

So how come that money seems to disappear without a trace? Surely not all of it went into Avatar and the Mine Train ride.

I suppose a lot of it is going into the My Magic+ black hole, and another big chunk into developing Shanghai Disneyland (for example, how much does it cost to provide air pollution masks to all the construction workers? That must be a small fortune). Why do they keep building new parks while only adding to their existing parks at a glacial pace? Every new state-side park since Epcot opened as a half-day experience (Animal Kingdom, DHS) or a cheap disappointment (DCA). The company had a responsibility to add capacity to those parks before going off on overseas construction binges.

I think Universal is getting more praise because they have their priorities straight. They are building more cutting edge rides, not squandering zillions on a whiz bang glorified reservation system. They are expanding their existing parks, not building more malnourished gates overseas.

I'm a huge Disney fan, and that is why Disney keeps disappointing me. I keep hoping they will live up to the standards of their founder, who performed miracles on a shoestring. By contrast, today the WDC does the minimum, with more money than King Croesus.

As a recovering bean counter I must point out there is a difference between gross revenue and profit (net income). Sorry, I've only been retired for two years now and still haven't unlearned those things.

A not insignificant portion of the company's operating profit goes to pay shareholder dividends. Those dividends are almost $1.5 billion per year.

I don't think Disney paid a dividend this year. Did it?

 

[wiigirl]

All you gotta do is look at Carsland, and the point you just made is proved.

 

[Davey Jones II]

All you gotta do is look at Carsland, and the point you just made is proved.

I've been to DLR twice since Cars Land opened, and it gets thumbs up from me. The resort raised its prices before CL opened, knowing full well that people would flock to it anyway. That's the kind of investment that pays real, long term dividends for a theme park.

On our last vacation, we changed our plans and decided to go to California instead of Orlando, and Cars Land was one of the key reasons. At the time, DLR offered more new goodies for us. That's how lots of people plan their vacations -- is there something new there?

P.S.: At DLR, I met people from Australia who had flown around the world because their sons are big fans of the Cars movies. Just sayin'.