Theme Park Cut-backs

[lrodk]

I feel the pain as many others here have, concerning all of the recent cut-backs. I have a trip planned myself next month with my family, which I hope is not tainted as a result of all of these changes. A thought came to me after reading an LA Times article today which I think helps explain why things are going down the way they are at the parks. Once again, the parks are suffering for the greater good of the company, which accounts for 40% of their revenues. I'm quite certain that all of the recently announced cut-backs in entertainment,park hours, resort closings, and the like, are in direct anticipation of 4th quarter earnings that could potentially be the bleakest since the huge 1993 write-off of losses resulting from their EuroDisney resort. I think that Disney knows where they're at with regard to 4th quarter earnings, which are due to be released next month. The only explanation that I could come up with is that things must be pretty bad, otherwise we wouldn't have seen such swift measures in place on such a large scale. This is a well thought out plan, one of desperation, executed in an attempt to meet already lowered earnings projections. Logic would dictate that they would do whatever possible to lure guests back right away, which based on all of these recent moves they seem to have given up on. The immediate concerns within the company however are not bringing guests back now, but rather to scale back wherever possible to prevent any further depreciation in valuation should they miss the intended earnings target. Further depreciation in stock value would leave them even more vulnerable in this already depressed recessionary market. This company is living from quarter to quarter, and will do whatever necessary to meet or beat the mark. That's been how Eisner and Co. has done things from the start. They are just doing what they feel that they have to in order to stay afloat. If you think things are pretty bad now, just pray that they at least hit the mark next month. Otherwise these changes will pale in comparison to what will be in store for us in the aftermath.

 

[VickiVM]

"Stop the bleeding" is what I've heard it referred as. I've worked for a rather large national company that was unable to do that. The original intentions of this company were to gain a larger market, but spent so much money in the marketing budget attempting to do what all of the loyal WDW guests are expecting - offering more "incentives". Alas, this company filed bankruptcy earlier this year after over 20 years. The "fluff" spending should not have happened at all for this company and it's possible this directly led to its demise. But I can say this with certainty...it got pretty ugly in the end. No one was happy - customers, employees, field management (who were spread so thinly), buyers, vendors, etc. I never saw so many employees bail in one quarter. Not even the bankruptcy court could save it. They ordered liquidation as opposed to re-organization. So I can see how widespread the effects are. Can you even imagine no Disney???

 

[CarolMN]

Can you even imagine no Disney???

No, but I can imagine Disney in "bankruptcy reorganization" or as a takeover target if its stock continues to lose value. I can also imagine stockholders losing confidence in the existing management and making changes in the Board of Directors.

Perhaps Disney Managers & Directors are imagining the same things.

 

[YoHo]

The Debate board(and RAPD) regular bicker, has an interesting take on the whole situation. He has been a consultant in the past that used to preach customer service. We shall see. Rumours of a takeover still loom.

 

[gary]

I read an interesting angle on the "stock price" subject a couple of weeks ago... Basically, the point of view was, with Disney's stock price at such a low, they are in danger of a takeover. But, with everyone else suffering similar problems (albeit not necessarily to the same extent), none of the usual suspects are sufficiently strong to mount such a takeover effort. The article further described the problems that non-entertainment-based companies have traditionally had buying out entertainment-based companies (which they implied limited the field of potential raiders, making non-entertainment-groups gunshy of buying a Disney).

 

[King Triton]

hmmmmmmm.....this calls for a truck load of pixie dust.

Relax Disney fans, everything will be fine.

King Triton

 

[GOOFY D]

Originally posted by gary
I read an interesting angle on the "stock price" subject a couple of weeks ago... Basically, the point of view was, with Disney's stock price at such a low, they are in danger of a takeover. But, with everyone else suffering similar problems (albeit not necessarily to the same extent), none of the usual suspects are sufficiently strong to mount such a takeover effort. The article further described the problems that non-entertainment-based companies have traditionally had buying out entertainment-based companies (which they implied limited the field of potential raiders, making non-entertainment-groups gunshy of buying a Disney).

I would have to think that a company the size of Disney has plenty of "poison pills" to prevent a hostile takeover.