What's up with all the cutbacks?

[BrianL]

Cutting a meet & greet here and there is not something that bothers me too much. Cutting atmosphere performers hurts a bit more. Cutting the live actors from RoL? That's just crazy. They're integral to the show! They may as well just have the show go dark. It seems like a lot of people don't like it, and while I'm one of the ones who does, I would totally get if they wanted to just cut it for now and develop a replacement that more people would like.

 

[SaharanTea]

https://blog.touringplans.com/2018/02/12/crowd-calendar-4-1/

This article from February talks a bit about it... (Their archive feature is a bit cumbersome to use and I gave up looking for more ) I recall their data showing they were cutting back on staffing at attractions this past Feb and it completely backfired... people complained when the wait times went up... and then to compensate they went too far the other way... they ran all their attractions at full capacity end of Feb and March and deferred all of their ride maintenance until after hours and they had an astronomical number of breakdowns...

I'll keep hunting for that follow up article.

I see that this particular article is saying. If it's normal maintenance stuff, I could kind of understand, but that's not what people are noticing. They see stuff just shut down (no one's working on it), or empty cars/trains are going out with a queue artificially backed up. There's even a post in the TPAS about it (https://www.disboards.com/threads/p...during-off-peak-season.3707979/#post-59775914).

When it's normal maintenance, people tend to be understanding. When it just looks like penny pinching, people get annoyed. Most of the ones I've seen and read about look like penny pinching.

 

[rteetz]

most of these are typical fall clearing of the weeds to make way for something new.

If anything, investing in the parks has gone up recently.

It’s hard not to go up when they were doing so little for a while

 

[EdmondD]

They also do it at medieval whirl

Your slip made me chuckle. What a different ride that would be!

 

[Liljo22]

I'm really confused now. If Disney's fiscal year ends Sept 30th then how does cutting things on those days help their bottom line? They won't realize savings until the beginning of the new quarter. Am I missing something? There has to be another reason they are making these cuts. These are the cuts we can see. There may be others behind the scenes we don't know about but it still doesn't seem to be because of this years bottom line. That is just one speculation here that doesn't make sense. It makes more sense that this is to try to free up money for some future purpose. I don't know what it is. It could be an acquisition, upgrades or some other reason. I can't tell you the answer because only the decision makers at Disney know them.

If the financials for the Theme Parks are going to miss estimates, they can disclose cuts made at the end of the fiscal year and what they expected annual savings will be. While it does not help the actual financials, it does help squash shareholder concerns about missing the estimate if they know Disney is doing something about it.

 

[lambdabeta]

If the financials for the Theme Parks are going to miss estimates, they can disclose cuts made at the end of the fiscal year and what they expected annual savings will be. While it does not help the actual financials, it does help squash shareholder concerns about missing the estimate if they know Disney is doing something about it.

Thanks for the answer. That was not the point of my post. Maybe I didn't make myself clear. I was confused by people who were saying the cuts were to boost the short term profits for the 4th quarter. As you state it doesn't help the 4th quarter financials just estimates. What you are talking about does answer the title of this thread but not what was confusing me.

 

[snappy]

https://blog.touringplans.com/2018/02/12/crowd-calendar-4-1/

This article from February talks a bit about it... (Their archive feature is a bit cumbersome to use and I gave up looking for more ) I recall their data showing they were cutting back on staffing at attractions this past Feb and it completely backfired... people complained when the wait times went up... and then to compensate they went too far the other way... they ran all their attractions at full capacity end of Feb and March and deferred all of their ride maintenance until after hours and they had an astronomical number of breakdowns...

I'll keep hunting for that follow up article.

Sounds like good solid long term management planning to me.

 

[rteetz]

Featured DISboards Thread: What's up with all the cutbacks?

 

[Doug M]

Featured DISboards Thread: What's up with all the cutbacks?

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A link to this post?

 

[rteetz]

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A link to this post?

Just showing that this thread is today's featured thread.

 

[Firepath]

Most frustrating is when they deliberately reduce ride capacity during lower attendance times.

Last January was so frustrating. I literally watched only 3 cars at a time (yes three) be loaded at Space Mountain while they sent the others through empty. I felt like I should jump in to help and knock out the long line - I've ridden enough I think I might be able to do it. Maybe in the future we'll just scan our magic bands and it will self load/launch. If they could cut all CM's they probably would.

 

[cmwade77]

Actually, they are dramatically increasing wages for almost 100,000 cast members, many of them by as much as $4 or $5 more per hour, even at $3 an hour, that is $124,800,000 per year in increased costs. That is A LOT and that money has to come from somewhere. Either prices have to increase, budgets have to be cut or both have to be done.

To give you an idea in scope, Iger's salary is $45 million, even if that were cut to $0 it wouldn't make up for this. A case could be made for reducing the dividends paid to shareholders, but you have to be careful so as to not alienate them, as then they will sell off in mass and the company will end up with no one pumping money into it, so there will have to be a careful balancing act there.

I know people don't like hearing it, but a company has to make a healthy profit in order to keep operating these days and making a profit isn't the evil that many think it is, it is a necessity, otherwise those 100,000 people and more are out of jobs.

Even if they didn't have to make up that money, Disney does this every so many years, usually when some one new is in charge of entertainment or the parks or such to make themselves look good as they can show they cut the budget, but then there is a public backlash and they realize that the entertainment is part of what makes Disney different than other parks and have to put it all back and more to make up for it.

 

[epcotty]

Rafiki's Planet Watch is a major area, it'll be painful for that to go for us as we went there every time we went to AK. I understand that it wasn't that popular though, even the It All Started With A Mouse show didn't help. Still though it's a shame

 

[Ponderer]

Actually, they are dramatically increasing wages for almost 100,000 cast members, many of them by as much as $4 or $5 more per hour, even at $3 an hour, that is $124,800,000 per year in increased costs. That is A LOT and that money has to come from somewhere. Either prices have to increase, budgets have to be cut or both have to be done.

To give you an idea in scope, Iger's salary is $45 million, even if that were cut to $0 it wouldn't make up for this. A case could be made for reducing the dividends paid to shareholders, but you have to be careful so as to not alienate them, as then they will sell off in mass and the company will end up with no one pumping money into it, so there will have to be a careful balancing act there.

While this math is correct, it ignores two things:

1) While that number is large, it’s a fraction of the profits of a blockbuster or even a decently successful video game. It’s not out of bounds. It’s affordable, especially with stuff like SW:GE about to come online and Marvel properties generating more and more revenue.

2) As I’ve pointed out before, Disney just paid More than 70 BILLION for Fox. More than 20 billion more than they wanted to. Just the additional 20 billion alone would have paid salaries for going on another thirty-five years. THAT, I would submit, is why you’re seeing cutbacks - just like you do at virtually every other huge conglomerate after a giant acquisition. Like you said, the money has to come from somewhere.

 

[BeefSqueezins]

Should I cancel my trip? Ive planned for my family of 3 for our very first trip to Disney World in November. If they’re cutting back and lowering the experience, should I just spend my money on a cruise or another theme park instead? Ive got a quite a bit of money tied up in this and don’t want to find half the parks closed up due to cutbacks.

 

[The Pho]

Should I cancel my trip? Ive planned for my family of 3 for our very first trip to Disney World in November. If they’re cutting back and lowering the experience, should I just spend my money on a cruise or another theme park instead? Ive got a quite a bit of money tied up in this and don’t want to find half the parks closed up due to cutbacks.

If it's a first trip, you will find plenty to do. While there have been cuts, the parks and entire resort offer something you cannot find anywhere else. The cuts are disappointing for fans of these certain things but ultimately none of them have been detrimental to the Disney experience overall. You'll have no issue finding plenty to enjoy and it's well worth the trip still.

 

[cfeasby]

We were in AK for EMH from 8-9 AM on Sat. Dinosaur, Kali Rapids, and Everest all closed. Bought my girls some ice cream because they were bummed, asked cast member, what was going on, she said likely not enough cast to operate the entire park...one persons opinion. But, yikes! Everest opened around 8:45, so maybe there was some truth to it, either way, not good to have major attractions closed during EMH.

 

[AntimonyER]

While this math is correct, it ignores two things:

1) While that number is large, it’s a fraction of the profits of a blockbuster or even a decently successful video game. It’s not out of bounds. It’s affordable, especially with stuff like SW:GE about to come online and Marvel properties generating more and more revenue.

2) As I’ve pointed out before, Disney just paid More than 70 BILLION for Fox. More than 20 billion more than they wanted to. Just the additional 20 billion alone would have paid salaries for going on another thirty-five years. THAT, I would submit, is why you’re seeing cutbacks - just like you do at virtually every other huge conglomerate after a giant acquisition. Like you said, the money has to come from somewhere.

None of what you said matters to a publicly traded company, or in reality, to anyone. One is a major purchase meant to better the company. In a personal comparison, think new home purchase. Yes its a lot of money, but you GET something for that money, something you didn't have before, so its worth it. The other is a major cost increase to something which adds NOTHING to what you already had. Think electric/tv/insurance company jacking up rates for the same thing you have always had. People hate paying more for the same thing, and so do companies. So they are going to cut anything and everything they can without too much hassle. For individuals, same thing, they will Start turning off lights, raise deductibles (or switch companies), cancel premium channels, etc. Even though those things are minor compared to the total budget, its the principle. When wages are increased due to social pressure rather than market pressure like they just were at Disney, there are ALWAYS going to be cutbacks, price increases, reduced services as a result. A company won't absorb those increases, they will minimize them where possible (cuts) and pass on what they can't minimize (price increases). And thats exactly what we are seeing. Its how business is done, like it or not.

 

[JaxDad]

While this math is correct, it ignores two things:

1) While that number is large, it’s a fraction of the profits of a blockbuster or even a decently successful video game. It’s not out of bounds. It’s affordable, especially with stuff like SW:GE about to come online and Marvel properties generating more and more revenue.

2) As I’ve pointed out before, Disney just paid More than 70 BILLION for Fox. More than 20 billion more than they wanted to. Just the additional 20 billion alone would have paid salaries for going on another thirty-five years. THAT, I would submit, is why you’re seeing cutbacks - just like you do at virtually every other huge conglomerate after a giant acquisition. Like you said, the money has to come from somewhere.

Yes, they've incurred costs for increased salaries and the acquisition of Fox, but how much did they save with the corporate tax cut? I would like to see that number.

I think it's great that they increased wages, and I know they have to keep the stockholders happy, but a lot of these cuts just seem like nickel and diming the customers.

 

[Justthefacts]

I haven't been following that close lately since we canceled our trip for this fall. But getting caught up - wow, there's a lot of cutbacks going on. Why? Are they way over budget on SWL? Did TSL underperform? Aside from these two things, I'm sorry, they're not hurting for money, so what's their excuse?

Wow!... I've never seen so much negativity and misinformation. As far as your comment "there's a lot of cutbacks going on." Really? The company is spending hundreds of millions of dollars just in Orlando. That's not accurate. Disney is opening new attractions/rides/experiences at every park. You obviously haven't been there lately. (Avatar and Pandora have been a huge success) and they continue to bring record guests to Animal Kingdom. The stock is at an all time high. The resorts are packed during September (normally the slowest month of the year)...and there are construction cranes and new roads, hotels, rides and shows being added everywhere! Well...everyone is entitled to their opinion. You can go through life complaining that the glass is half empty or half full...it's the same glass.

I haven't been following that close lately since we canceled our trip for this fall. But getting caught up - there's a lot of cutbacks going on. Why? Are they way over budget on SWL? Did TSL underperform? Aside from these two things, I'm sorry, they're not hurting for money, so what's their excuse?