What happens if..... Disney Doomsday Scenario?

[CanadaDisney05]

I know that. I was being silly on purpose. The internet. No context or tone.

I will tell you this, and I'm not going to re-hash my post in another thread, but I, for one, am done touting this as just a timeshare. I've done it for years, but at the end of the day, it's crap and I'm not toeing the company line anymore. It has suited the dialog so long that we have brow-beaten it into people that come here and then those people start preaching the same crap.

Stop. Please just stop. If one thing comes out of all of this, can we please stop propagating this notion that DVC isn't different?It's not just a timeshare. If it was, I would have bought a cheap $1 timeshare of Ebay. The entirety of marketing and selling DVC is those parks outside the off-site properties, and even then it's all sold based on FL and CA. In NC TS law, what's said is just as important as what is written, and the entire sales pitch is based on those gates. It's time to stop pretending when it suits the dialog. I (and I suspect the vast majority of us) purchased DVC with my hard-earned money in order to get to those parks. Period. If I just wanted to vacation in Orlando area, I'd stay somewhere at half the cost and twice the resort amenities. All of us would.

The documents you signed when you purchased make no mention of access to the theme parks as part of the transaction.

I agree that the proximity to theme parks, plus the Disney brand has a major impact on the demand, which therefore has an affect on the price. But in reality, that is an external factor. If I buy a house at a premium price because it is close proximity to a major employer, and then that employer decides to pickup and move, I cannot sue that employer. You paid the premium price due to supply and demand, not because the employer contractually agreed to remain in place.

 

[Ms.Minnie]

The documents you signed when you purchased make no mention of access to the theme parks as part of the transaction.

I agree that the proximity to theme parks, plus the Disney brand has a major impact on the demand, which therefore has an affect on the price. But in reality, that is an external factor. If I buy a house at a premium price because it is close proximity to a major employer, and then that employer decides to pickup and move, I cannot sue that employer. You paid the premium price due to supply and demand, not because the employer contractually agreed to remain in place.

What you are saying is absolutely correct BUT I would venture a guess the only reason most if not all of us bought DVC is because of the fact it is located on Disney property with close proximity to the parks. If we didn't want the parks why would anyone buy DVC? Why would you put yourself in the middle of something you don't want to be a part of? The implication is there and supported by WDW that the parks are a big part of being a DVC member. I know there are no guarantees as has clearly been demonstrated over the past several months but the implication is still there and being pushed by Disney. This is definitely a purchase where the buyer has to have his/her eyes wide open and understand exactly what he or she is buying. Brings to mind the expression "buyer beware"

 

[CanadaDisney05]

What you are saying is absolutely correct BUT I would venture a guess the only reason most if not all of us bought DVC is because of the fact it is located on Disney property with close proximity to the parks. If we didn't want the parks why would anyone buy DVC? Why would you put yourself in the middle of something you don't want to be a part of? The implication is there and supported by WDW that the parks are a big part of being a DVC member. I know there are no guarantees as has clearly been demonstrated over the past several months but the implication is still there and being pushed by Disney. This is definitely a purchase where the buyer has to have his/her eyes wide open and understand exactly what he or she is buying. Brings to mind the expression "buyer beware"

I agree. I don't even know what we are debating. Yes, the reason we all bought DVC was because of the parks and other amenities at WDW. If those didn't exist, the value of the timeshare on the resale market would be $1 on Ebay as @WilsonFlyer suggested. At the end of the day, before buying in it is important to understand that those are external factors and if push came to shove, we wouldn't have a legal right to access the parks. Someone who is buying in needs to factor that in, in their risk/reward analysis of the purchase. Otherwise they are just being ignorant.

 

[WilsonFlyer]

The documents you signed when you purchased make no mention of access to the theme parks as part of the transaction.

I agree that the proximity to theme parks, plus the Disney brand has a major impact on the demand, which therefore has an affect on the price. But in reality, that is an external factor. If I buy a house at a premium price because it is close proximity to a major employer, and then that employer decides to pickup and move, I cannot sue that employer. You paid the premium price due to supply and demand, not because the employer contractually agreed to remain in place.

Every state in the US has it's own TS laws that govern any sale to a resident of that state. At the end of the day, any verbal agreement or statement made during the sale is binding under NC law. Many other states have similar laws. So you are wrong about the POS, at least as it applies to purchases in NC.

So your obvious next response is probably going to be can I prove it. I'm not going to have to. Good luck seating a jury that won't believe it automatically the moment it leaves my lips.

 

[Grumpy by Birth]

I agree concerning WDW parks being the primary "draw" for purchasing DVC with one slight caveat. I think a timeshare like Animal Kingdom Lodge could potentially stand on its own. Probably not for the direct price Disney asks, but probably not $1 on eBay either.

Admittedly, I'm biased in my love of AKL. Would the general public buy at Animal Kingdom Lodge if there were no Disney parks in the vicinity? Maybe not.

 

[TiggerBouncy]

I agree concerning WDW parks being the primary "draw" for purchasing DVC with one slight caveat. I think a timeshare like Animal Kingdom Lodge could potentially stand on its own. Probably not for the direct price Disney asks, but probably not $1 on eBay either.

Admittedly, I'm biased in my love of AKL. Would the general public buy at Animal Kingdom Lodge if there were no Disney parks in the vicinity? Maybe not.

But would the dues cover the care of grounds and animals by itself? Without the cash paying portion, I wager it would not. For AKV to stand, Jambo would have to be viable as well. For both to stand, they still get cost benefits from Animal Kingdom (and shared resources).

In other words, I think AKL would have a difficult time standing by itself without Disney as a whole to support it.

 

[TiggerBouncy]

I agree. I don't even know what we are debating. Yes, the reason we all bought DVC was because of the parks and other amenities at WDW. If those didn't exist, the value of the timeshare on the resale market would be $1 on Ebay as @WilsonFlyer suggested. At the end of the day, before buying in it is important to understand that those are external factors and if push came to shove, we wouldn't have a legal right to access the parks. Someone who is buying in needs to factor that in, in their risk/reward analysis of the purchase. Otherwise they are just being ignorant.

I see both sides of the issue. On the one hand, I completely agree that one of the primary draws is the parks. The value of DVC as standalone resorts clustered together in Orlando is of limited use.

However, DVC as a concept stands on its own (Vero Beach, Aulani, Hilton Head). So you could make the argument that DVC does have value in and of itself.

When you buy something - anything - you have to access your own risk. We bought DVC with the inherent risk and belief that Disney would survive as an entity for the time we needed to get value from our investment. By the same token, when you purchase stock in a company (which is the same as owning a portion of the company, in many ways similar to a timeshare), you are taking a chance that the company will exist and return value to you. In other words, I see DVC as no different than other investment risks we take all the time. That's on us.

In other words, when you bought DVC, you were putting your bet that Disney would survive as an entity. That's on you. It's YOUR responsibility to understand the risks and determine if the chance is worth it to you. It's not their (Disney, The Government, Society, Your Parents, or anyone else in the world) responsibility to save you from your own bad decisions.

 

[Murron]

At $109 per share today, I'm buying. The current situation is an anomaly and I still see Disney as a good long term investment.

 

[CanadaDisney05]

Every state in the US has it's own TS laws that govern any sale to a resident of that state. At the end of the day, any verbal agreement or statement made during the sale is binding under NC law. Many other states have similar laws. So you are wrong about the POS, at least as it applies to purchases in NC.

So your obvious next response is probably going to be can I prove it. I'm not going to have to. Good luck seating a jury that won't believe it automatically the moment it leaves my lips.

I'm not really understanding the argument. Are you suggesting that if Disney went belly up, you would be able to sue them and be successful? If they have no money, good luck winning enough money to cover your legal bills.

Or, are you suggesting that if Disney the entity continued to exist, but closed down their parks and resorts division, you would be able to sue Disney and be successful? I'm not a lawyer so I don't know. I don't think it's as open and shut of a case as you think. They made it pretty well known to me when I purchased that I was purchasing only a stake in Saratoga Springs resort. I was not entitled to entrance into any theme parks. I don't recall specifically, but I feel like it's written all over the contracts and the brochures that your buying a stake in the resort only. Maybe I'm being a bit naive, but I have to imagine that Disney has had a team of lawyers prepare the documentation to ensure that they would be covered.

 

[TiggerBouncy]

The

I'm not really understanding the argument. Are you suggesting that if Disney went belly up, you would be able to sue them and be successful? If they have no money, good luck winning enough money to cover your legal bills.

Or, are you suggesting that if Disney the entity continued to exist, but closed down their parks and resorts division, you would be able to sue Disney and be successful? I'm not a lawyer so I don't know. I don't think it's as open and shut of a case as you think. They made it pretty well known to me when I purchased that I was purchasing only a stake in Saratoga Springs resort. I was not entitled to entrance into any theme parks. I don't recall specifically, but I feel like it's written all over the contracts and the brochures that your buying a stake in the resort only. Maybe I'm being a bit naive, but I have to imagine that Disney has had a team of lawyers prepare the documentation to ensure that they would be covered.

Despite what he thinks, he’s no lawyer. The chance of winning that case is negligible. Just like if you purchase a timeshare on a beach and the polar caps melt and you have no beach, the timeshare does not need to refund your ownership share.

Disney has in no way misrepresented what you were getting. You simply have an ownership share in a piece of real estate. That’s the beginning and ending of what you bought. There are no guarantees of amenities, shops, transportation, services, or area attractions beyond what they are required to provide (electricity, water, sewage, etc).

as for trial by jury? You’d be insane. Most jury’s would call you a rich, entitled elitist snob. You’re be better off with a bench trial, but you still won’t win.

 

[Dean Marino]

Just me - thinking Disney is dead. I have little data to indicate that WDW will NOT be abandoned.

So just my Family.... strongly considering dumping DVC, being happy that we got to go, while it was a good thing, and saying GoodBy.

 

[jarestel]

2042 won't get here fast enough if doomsday scenarios occur... With no theme parks, Orlando is one of the last places I would ever want to be "forced" to visit. Though I must say, if St. Peter were to give me a heads up about the pearly gates ("jarestel, I'm afraid you won't be getting in"), I would probably move to Orlando to start getting used to the heat.

Do companies last forever? Obviously not, but I do think Disney has a few good years left in them before we need to become overly concerned.

 

[YourEveryDayAdam]

One thing to keep in mind is that even IF The Walt Disney Company that we know and love today goes bankrupt...it won't matter that much at all. Let's take a quick look at what would happen?

In the WORST of bankruptcy cases, a company has too much debt, they have no tangible assets, so they close. Think Radio Shack...or Blockbuster...or many other retailers. They bought a lot of their in-store merchandise credit, they primarily rented their store locations, and had no real physical inventory or owned any real-estate that was worth anything. When they finally couldn't pay their bills, they had to declare bankruptcy. Since the companies didn't have any REAL assets, it was just better to shut them down....Poof! Gone! Other retailers and businesses moved in...life went on.

Now lets look at what happens when a company has REAL assets...General Motors...is bankrupt. The "Old GM" is no longer a thing...but all of GM's assets are worth a LOT of money. The factories that manufacture cars, the patents, the relationships with vendors, sales channels, the logistics apparatus of moving thousands of cars around the country, even the CARS themselves that were in inventory, etc...they are ALL valuable assets that someone is willing to buy...New investors with money came in, bought the company, the creditors split that money, and we now have the "New GM"...For the customers of GM, not much had really changed. A few of the brands went away (Pontiac, Saturn, etc.)...but on the whole, GM still works pretty much the same way from the customer's perspective. Only real difference is that some people are a less rich and other people are now more rich due to the bankruptcy.

The Walt Disney Company has a LOT of assets that are worth money. There are the media properties themselves (Disney Animation, Marvel, Lucasfilm, 20th Cetury, ESPN, ABC), and then there are the Parks and Resorts. There are MANY investors who would salivate at the chance to buy up ANY of those brands or properties. The media properties have their respective characters, copyrights, etc. and the Parks and Resorts have REAL property (hotels, buildings, rides, cruise ships, etc.).

If The Walt Disney Company had a debt problem and could no longer pay the bills, it would very likely be a similar situation as General Motors...The "Old Disney" would be gone, investors wiped out, new stock would be issued and sold to new investors...the cash raised would pay off creditors...and....probably not a whole lot would change. Maybe we lose a few brands that are "under performing" (A&E, FX, History Channel, etc...)...maybe some other better performing brands get spun off into separate companies to generate even more cash (ESPN, Lucasfilms, 20th Century, National Geographic)...and Maybe even the Disney Parks business becomes a separate legal entity from the Disney Media business. (Note: I am COMPLETELY guessing at how each brand under the Disney umbrella is performing...it's just an example...don't @ me.)

The media properties they own (Mickey, Princesses, Star Wars, Simpsons, Marvel, ESPN) are such a HUGE part of the culture, childhoods, nostalgia, etc. of nearly EVERY person on earth. Slap a Mickey Mouse on a Plush, blanket, book, pillow case, shirt, hat, socks, waffle iron, etc. and people WILL buy it. THAT is valuable. Investors will bring money to the table to own that.

Maybe the current OWNERSHIP of The Walt Disney company doesn't survive...but we will ALWAYS have something resembling Disney in our lives for a LONG time.

No matter what happens with COVID, the parks will continue to exist, and they will likely continue to follow the same business plan that made Walt Disney World the premier family vacation destination in the world. COVID is likely a speed bump in Disney World's profitability. Lasting a year, maybe two? We will get a vaccine...chances are fair that we have a vaccine by the end of the year...even if it takes until the end of 2021. We will either go back to normal, or there will be a new normal. Life will go on.

Maybe the current OWNERSHIP of The Walt Disney company doesn't survive...but we will ALWAYS have something resembling Disney in our lives for a LONG time.

What I AM more worried about is that Florida falls in to the ocean in 50 years. Climate Change, rising sea levels, etc...But if anybody can hold back the ocean, it is Disney World!

 

[mlayton14]

You bring up a good question , if disney sold off the parks and resorts would DVC be part of that deal , or would they carve out those properties to be sold to someone else ? I imagine the real estate is valuable , but why would a company buy SSR and OKW properties if they would get ZERO income from them for the next 40 years ??
The above is one scenario where DVC could lose onsite privileges to the parks

 

[bobbiwoz]

When I bought AKV and read the papers, it specifically says that animals are not guaranteed. I thought long and hard about that, but I did buy. So, in spite of how they market DVC, we really are only getting the resorts and have to be content with that.

Never ever thought of the situation we find ourselves in.

 

[Bellecruiser]

Just me - thinking Disney is dead. I have little data to indicate that WDW will NOT be abandoned.

So just my Family.... strongly considering dumping DVC, being happy that we got to go, while it was a good thing, and saying GoodBy.

Disney is not dead. Go ahead and dump. I will buy your interest at reduced prices!

 

[Travel60]

I'm not sure why everyone is ragging on Disney. They didn't cause the virus. While their communication is a bit lacking they seem to be trying to do what is best for employees, customers and shareholders. It is probably hard to put out comprehensive communication when facts and circumstances are changing by the minute.

I had a seven night cruise and a week's stay in a 3 BR villa cancelled. Am I happy? No. But, they handled it as best they could. Hopefully, people will start caring about other people and we will get this virus under control so I can use my points and DCL credit before they expire. If not, that's not Disney's fault either.

I think Disney, like many other large organizations has seen problems they never imagined and never prepared for. So have most schools, factories, businesses, hospitals. Now, we have seen the future and we have to figure a new way to operate. The US has always been a boot-strap, entrepreneurial people...doing what was necessary to get "it"done. I fear that our decades of prosperity have turned us into simpering wimps who can't find our way.

 

[Yinn]

One thing to keep in mind is that even IF The Walt Disney Company that we know and love today goes bankrupt...it won't matter that much at all. Let's take a quick look at what would happen?

In the WORST of bankruptcy cases, a company has too much debt, they have no tangible assets, so they close. Think Radio Shack...or Blockbuster...or many other retailers. They bought a lot of their in-store merchandise credit, they primarily rented their store locations, and had no real physical inventory or owned any real-estate that was worth anything. When they finally couldn't pay their bills, they had to declare bankruptcy. Since the companies didn't have any REAL assets, it was just better to shut them down....Poof! Gone! Other retailers and businesses moved in...life went on.

Now lets look at what happens when a company has REAL assets...General Motors...is bankrupt. The "Old GM" is no longer a thing...but all of GM's assets are worth a LOT of money. The factories that manufacture cars, the patents, the relationships with vendors, sales channels, the logistics apparatus of moving thousands of cars around the country, even the CARS themselves that were in inventory, etc...they are ALL valuable assets that someone is willing to buy...New investors with money came in, bought the company, the creditors split that money, and we now have the "New GM"...For the customers of GM, not much had really changed. A few of the brands went away (Pontiac, Saturn, etc.)...but on the whole, GM still works pretty much the same way from the customer's perspective. Only real difference is that some people are a less rich and other people are now more rich due to the bankruptcy.

The Walt Disney Company has a LOT of assets that are worth money. There are the media properties themselves (Disney Animation, Marvel, Lucasfilm, 20th Cetury, ESPN, ABC), and then there are the Parks and Resorts. There are MANY investors who would salivate at the chance to buy up ANY of those brands or properties. The media properties have their respective characters, copyrights, etc. and the Parks and Resorts have REAL property (hotels, buildings, rides, cruise ships, etc.).

If The Walt Disney Company had a debt problem and could no longer pay the bills, it would very likely be a similar situation as General Motors...The "Old Disney" would be gone, investors wiped out, new stock would be issued and sold to new investors...the cash raised would pay off creditors...and....probably not a whole lot would change. Maybe we lose a few brands that are "under performing" (A&E, FX, History Channel, etc...)...maybe some other better performing brands get spun off into separate companies to generate even more cash (ESPN, Lucasfilms, 20th Century, National Geographic)...and Maybe even the Disney Parks business becomes a separate legal entity from the Disney Media business. (Note: I am COMPLETELY guessing at how each brand under the Disney umbrella is performing...it's just an example...don't @ me.)

The media properties they own (Mickey, Princesses, Star Wars, Simpsons, Marvel, ESPN) are such a HUGE part of the culture, childhoods, nostalgia, etc. of nearly EVERY person on earth. Slap a Mickey Mouse on a Plush, blanket, book, pillow case, shirt, hat, socks, waffle iron, etc. and people WILL buy it. THAT is valuable. Investors will bring money to the table to own that.

Maybe the current OWNERSHIP of The Walt Disney company doesn't survive...but we will ALWAYS have something resembling Disney in our lives for a LONG time.

No matter what happens with COVID, the parks will continue to exist, and they will likely continue to follow the same business plan that made Walt Disney World the premier family vacation destination in the world. COVID is likely a speed bump in Disney World's profitability. Lasting a year, maybe two? We will get a vaccine...chances are fair that we have a vaccine by the end of the year...even if it takes until the end of 2021. We will either go back to normal, or there will be a new normal. Life will go on.

Maybe the current OWNERSHIP of The Walt Disney company doesn't survive...but we will ALWAYS have something resembling Disney in our lives for a LONG time.

What I AM more worried about is that Florida falls in to the ocean in 50 years. Climate Change, rising sea levels, etc...But if anybody can hold back the ocean, it is Disney World!

It’ll never happen anyway. If Bankrupt Hertz can sell $1B worth of stock AFTER declaring bankruptcy. Then Disney will be fine. With this market, they may actually be able to declare bankruptcy and boost share prices at the same time!

 

[sethschroeder]

I always shake my head about this. There is no way the parks are going anywhere. Possibly you get the water parks closed and maybe Hollywood Studios.

Magic Kingdom would be purchased by a big company in a second (Apple, Google, Comcast). Epcot would see a joint partnership in the food industry and other areas. Animal Kingdom couple spin off in to a non-profit or become part of one that already exists.

Heck possibly Universal would even dump plans for a new park and instead find a way to acquire one or multiple parks.

If the parks are closing we are talking about YEARS of neglect nothing short term. If Disney was in dire straights they have so many options of things to sell including the parks.