Analyst Sees a More Magical Kingdom If Apple Acquires Disney

[Lyle Romer]

Here's my armchair analysis. Tech companies are all about efficiency and productivity. Theme parks, resorts and hotels require enormous payrolls due to the manual labor involved. Those business units would not fit with Apple at all and would devalue Apple.

The only way a merger would make sense would be for the theme parks and resorts to be spun off into a separate company that has rights to use current and future IP.

[Marcel Birgelen]

Here's my armchair analysis. Tech companies are all about efficiency and productivity. Theme parks, resorts and hotels require enormous payrolls due to the manual labor involved. Those business units would not fit with Apple at all and would devalue Apple.

The only way a merger would make sense would be for the theme parks and resorts to be spun off into a separate company that has rights to use current and future IP.

That's also what happened after InBev aqcuired/merged with Anheuser Busch to become AB InBev. Anheuser Busch used to operate the "Busch Gardens" themeparks, which were subsequently sold to the holding company of SeaWorld. AB InBev wanted to focus on brewing beer and had zero experience in the themepark business.

But in the case of Disney, their international theme park business is gigantic. They are the largest elephant in the room and it will be hard to find another theme park operator that even has the cash to acquire the business. Also, Disney's themepark business, post covid, seems to be generating money, compared to their studio and streaming operations, which seems to be losing money so fast, the company seemingly entered into panic mode.

Another problem is the strong IP integration into the parks, which only grew stronger over the years, with entire lands themed to some IP, like the new Star Wars land, Pandora, Cars Land, etc. Those parks simply can't function in their current form without access to this IP, so an intricate connection between the park and media/IP operations will be necessary, further limiting the potential buyers of the theme park business.

It's not entirely impossible though. Disney's theme parks in Japan are entirely run by a local entity: The Oriental Land Corporation, which not only owns the parks, but also runs the entire business. OLC wires a hefty amount of cash for licensing every year to the Disney corporation. In hindsight, many see this as one of the worst deals Disney ever did, because the Japanese parks are highly profitable.

So, splitting the company, while not impossible, will not be an easy task and it might also kill just that last bit of Walt Disney's legacy left in the company.

[Lyle Romer]

That's also what happened after InBev aqcuired/merged with Anheuser Busch to become AB InBev. Anheuser Busch used to operate the "Busch Gardens" themeparks, which were subsequently sold to the holding company of SeaWorld. AB InBev wanted to focus on brewing beer and had zero experience in the themepark business.

But in the case of Disney, their international theme park business is gigantic. They are the largest elephant in the room and it will be hard to find another theme park operator that even has the cash to acquire the business. Also, Disney's themepark business, post covid, seems to be generating money, compared to their studio and streaming operations, which seems to be losing money so fast, the company seemingly entered into panic mode.

Another problem is the strong IP integration into the parks, which only grew stronger over the years, with entire lands themed to some IP, like the new Star Wars land, Pandora, Cars Land, etc. Those parks simply can't function in their current form without access to this IP, so an intricate connection between the park and media/IP operations will be necessary, further limiting the potential buyers of the theme park business.

It's not entirely impossible though. Disney's theme parks in Japan are entirely run by a local entity: The Oriental Land Corporation, which not only owns the parks, but also runs the entire business. OLC wires a hefty amount of cash for licensing every year to the Disney corporation. In hindsight, many see this as one of the worst deals Disney ever did, because the Japanese parks are highly profitable.

So, splitting the company, while not impossible, will not be an easy task and it might also kill just that last bit of Walt Disney's legacy left in the company.

I agree with you. I wouldn't envision selling the theme park business, I would envision a split of the company into two companies. Something like "Disney Productions" and "Disney Parks." Disney Productions would be acquired by Apple as a wholly owned subsidiary. Disney Parks would continue to operate as an independent, public company. To facilitate the future success of the theme parks, a long term contract would be put into place to give Disney Parks the exclusive right to incorporate all past and future IP into the theme parks.

[Mike Blakesley]

Disney picked the absolute stupidest time in history to get involved with politics, and they shouldn't have gotten involved anyway. They've now succeeded in turning off half of their movie audience and cost themselves hundreds of millions of dollars in the name of political correctness, to say nothing of the millions of dollars they've cost the exhibition community. Putting ideology above story didn't help. Cripes, just make good movies with good stories and let people take care of their own lives.

The reason the theme parks are doing so well is, most of the kids want to go to Disney. And what the kids want, they generally get, whether the parents can afford it or not. When I was a kid, Disneyland was a far-off place that you could only go to if your mom and dad made a LOT of money. These days it's a rite of passage that every kid feels entitled to. Top that off with people being sick of "not doing much" during the pandemic and you have a recipe for theme park crowds.

The other genius move Disney has made is, they have managed to get everyone to feel like just ONE visit is not adequate. In Florida, when you drive off of Disney property on the way to the airport, you pass by a huge Mickey waving and a sign saying "See ya real soon!" That's just one way they subtly tell you, you'll be back.

Plus, even though the parks have gotten more expensive, they still deliver a consistent quality experience (albeit a little diminished in recent years due to "cutbacks").

It's a case of the left hand not knowing what the right hand is doing.

[Steve Guttag]

We'll see if the trend continues at the parks. There was a lot of pent up, lockdowns that has fueled these trips. Whereas many Disney trips are planned long in advance, it will take time for the new realities to play out. Additionally, you have Disney devotees that are becoming more and more disillusion with the current policies and values. The current policies favor the first time patron over the annual passholders (to the point of not being able to obtain annual passes and/or having new restrictions on them). Loyal patrons are being shunned in favor of that 1st or infrequent patron that drops loads more money on that once-in-a-lifetime visit than a regular that knows how to minimize costs.

This is going to sound cooky but...back with ShowEast was in Orlando, we'd stay at Disney as it was FAR FAR cheaper, with an annual pass discount, to stay at say an All-Star than to stay at the Marriott for ShowEast. My family would go to the parks, I would join outside of show hours. Then we'd take a second week as a full family vacation. Since we had a car, annual passes, moving about the parks for where we wanted to eat versus attractions was a breeze and costs were relatively known and controlled. Disney got their dough but not anything like a 1-timer. And, with the car, free parking, and knowing where to park for various parks, park-to-park times were very minimal. For instance, if you wanted to eat at one of the countries in World Showcase, no problem, head to the Beach Club resort, valet park because, as annual passholders, we had Tables of Wonderland which got us free valet parking and buzz in at International Gateway and head over to where we want to eat or where we had reservations (keep the receipt for the Valet to verify, they didn't care where you ate...only at the Contemporary do they check before you park since that would overwhelm Contemporary for people just looking for close to the Magic Kingdom).

There were a zillion ways one can deal with stashing the car in a convenient place, for free, that shaves over an hour of what the "typical" guest spends moving about. We'll, Disney has clamped down on some of that with the reservation system and the restrictions on annual passes. In fact, they lost me when they started to charge for parking at the hotel you were staying in. They just dropped that in 2023, finally. I do get putting restrictions on annual passes during peak periods (e.g Christmas week to New Years) but the rest...they are so geared for that 1-timer that I have no desire to put up with their absurd pricing and Genie crap. At some point, I think their current pricing strategy is going to bite them big. They are doing what they are doing because they can...but if my prediction is correct, that will not always be the case.

[Bobby Henderson]

It doesn't cost a ridiculous shit-ton of money to visit a theme park, especially a Disney or Universal one, when you look at the big picture.

Yeah, it does indeed cost a ridiculous shit-ton of money to visit a theme park like Disney World. I know it costs a lot of money for companies like Disney to build and maintain those theme parks. That still doesn't count out the financial math of what customers have to pay balanced against what they can actually afford. The tickets alone are pricey. A single one-day pass per person ranges between $100-$200; multiply that times the number of members in a family. Ticket costs go into the hundreds of dollars for multi-day passes. Most people visiting Disney World have to travel there. That means hotel and airfare costs (driving to Florida ain't cheap either). Lots of money will be spent on dining. Let's not forget about merchandise and other souvenirs. The whole package adds up to a fortune for most working class people.

I can visit Six Flags over Texas in Arlington for considerably less money than one of the theme parks in Orlando. Still, one day tickets there cost up to $90 per person. Throw in $40-$55 just to park. If you want to actually ride the rides rather than spend the whole day waiting in line you can spend another $60 to $125 per person for a regular, gold or platinum "Flash Pass." Depending on the pass it will either hold your place in line while you visit other attractions or just let you jump the line. A visit to Six Flags may end up costing considerably less than watching a Dallas Cowboys game in person, but the overall cost can still easily be in the hundreds of dollars.

I'd love to visit the MSG Sphere (or just "Sphere") in Las Vegas once that enormous special venue arena opens. But I shudder to guess what ticket prices could be to see a show there. The venue cost nearly $2 billion to build. It will have 17,500 seats (and can handle up to 20,000 with additional standing room only crowds). That could help spread out some of the enormous construction cost. Still, if they're wanting something like $300 or $400 per ticket to enter I may just say "no thanks."

[Steve Guttag]

[UPDATE], WDW will resume Annual Pass sales in a couple of weeks. Out of State people will be restricted to the top-tier "Incredi Pass" at $1,399 (well over double the last AP pass i bought though the Incredi pass has more access than the old Annual Pass...it is more akin to the Annual Pass Premium). It does not have blackout dates but still, for the moment, has the absurd reservation system for the 1st park. And they can still screw their Geni + crap.

[Marcel Birgelen]

Disney picked the absolute stupidest time in history to get involved with politics, and they shouldn't have gotten involved anyway. They've now succeeded in turning off half of their movie audience and cost themselves hundreds of millions of dollars in the name of political correctness, to say nothing of the millions of dollars they've cost the exhibition community. Putting ideology above story didn't help. Cripes, just make good movies with good stories and let people take care of their own lives.

As a Disney shareholder myself, I'd like Disney to stay away from religion and politics as far as possible. The not-so-subtle messaging and political over-correctness also starts to break up on me. Arielle needs to be darker skinned, because look how political correct and diverse we are... Being the hypocrite that Disney is, at the same time, they cater to almost every wish of the Chinese government, a government that's known to run slave camps and suppresses free speech for more than a billion people amongst lots of other bad things. Where are your so-called corporate values when dealing with the censors of Xi?

On the other side of the spectrum though, I expect a company like Disney to go with the times and that's not entirely easy in the current political climate in the U.S: Put one gay or lesbian person into your movie, and entire hordes are already screaming that you're catering to "the political left". Put in one reference to a hard scientific fact: Our planet is going to shit, if we're going to keep abusing it like we're doing now, and yeah, you're "catering to the political left". That kind of b.s. has to stop too, but I guess in order to fix that, politics has to be fixed first...

Yeah, it does indeed cost a ridiculous shit-ton of money to visit a theme park like Disney World. I know it costs a lot of money for companies like Disney to build and maintain those theme parks. That still doesn't count out the financial math of what customers have to pay balanced against what they can actually afford. The tickets alone are pricey. A single one-day pass per person ranges between $100-$200; multiply that times the number of members in a family. Ticket costs go into the hundreds of dollars for multi-day passes. Most people visiting Disney World have to travel there. That means hotel and airfare costs (driving to Florida ain't cheap either). Lots of money will be spent on dining. Let's not forget about merchandise and other souvenirs. The whole package adds up to a fortune for most working class people.

I can visit Six Flags over Texas in Arlington for considerably less money than one of the theme parks in Orlando. Still, one day tickets there cost up to $90 per person. Throw in $40-$55 just to park. If you want to actually ride the rides rather than spend the whole day waiting in line you can spend another $60 to $125 per person for a regular, gold or platinum "Flash Pass." Depending on the pass it will either hold your place in line while you visit other attractions or just let you jump the line. A visit to Six Flags may end up costing considerably less than watching a Dallas Cowboys game in person, but the overall cost can still easily be in the hundreds of dollars.

Every form of entertainment that's heavy on investment and labor costs has seen a pretty hefty increase. Also "second tier" theme parks have seen their prices rise and many have a big gap to fill after two years with no or only minimal business. What Mike wants to indicate though, that, if you look what you're essentially paying per hour and compare to what you're getting, it's still not such a bad deal.

I don't think it's entirely fair to compare the major Orlando theme parks with a local Six Flags park. The level of theming, immersion and technology is not just on another level, not a different ballpark, it's simply a different league. There are plenty of people that don't care about that, and for them, a day out at Six Flags may be as enjoyable as a day out at an Orlando theme park, but there clearly seems to be a market for the higher tier theme park market.

And Disney theme parks are supposed to be the APEX of theme park experiences. Maybe, the idea of everybody visiting the place twice a year simply isn't scalable. Maybe it's not "fair" that poorer families can't visit a Disney park every year, but you cannot expect corporations to only cater to the lowest common denominator. Then again, there has been a lot of price gauging going on at Disney theme parks and it remains to be seen if their customer base will continue to accept it.

We'll see if the trend continues at the parks. There was a lot of pent up, lockdowns that has fueled these trips. Whereas many Disney trips are planned long in advance, it will take time for the new realities to play out.

After an initial wave, you'd probably expect some form of normalization happening, especially if the current, rather difficult times, with extreme energy costs won't settle down. Still, the two major Orlando players are investing billions into the future, just into their Orlando properties. People need some form of escapism, that's also why books and movies are here to stay.

Additionally, you have Disney devotees that are becoming more and more disillusion with the current policies and values. The current policies favor the first time patron over the annual passholders (to the point of not being able to obtain annual passes and/or having new restrictions on them). Loyal patrons are being shunned in favor of that 1st or infrequent patron that drops loads more money on that once-in-a-lifetime visit than a regular that knows how to minimize costs.

There is a pretty big dilemma here. On the one side, you don't want to disgruntle your biggest fans, but on the other hand, it takes an increasing amount of resources to keep them happy, including a whole army of full-time vloggers that will capture everything you do in great detail. Additionally, those Orlando theme parks are consistently filling the world-wide top 10 of most visited parks in the world. Capacity is a continuing problem and an overfilled park with multi-hour queues will negatively impact every guest's experience. While expansion is almost always underway, it's hard to keep up with demand and it also comes at a high risk profile: You can't easily increase the capacity of existing parks, rides and restaurants and every new addition comes with extra risk at a premium (especially given current prices).

So, what do you do? Cater more to the more profitable "one time" guests and try to make their experience as good as possible, by reducing the loads on the parks or do you keep catering to locals, that essentially fill up the parks but are bringing in far less per butt-through-the-gate?

[Bobby Henderson]

On the other side of the spectrum though, I expect a company like Disney to go with the times and that's not entirely easy in the current political climate in the U.S: Put one gay or lesbian person into your movie, and entire hordes are already screaming that you're catering to "the political left".

I've been getting some pretty good laughs over the Bud Light hysteria this past week.

These culture war attacks on LGBTQ people and attacks on companies who dare to show any tolerance for the LGBTQ communities could back-fire badly. It really infuriates me when politicians, certain media personalities or celebrity culture warriors label LGBTQ people as pedophiles. It's a strange leap in logic that ignores all the adult straight men who abuse girls. But that has been the common tactic used to villify these people. That was long before any of this "drag story hour" thing some schools are doing. I have a few friends right here in Lawton who are openly gay and lesbian. They're perfectly decent, normal people. I'll bet a great deal of straight Americans have at least a few friends and acquaintances who are gay. When politicians make attacks on people who they feel are an easy target I kind of take it personally. They're attacking people I care about. If some asshole politician wants to brand them with a "pedo" label, me as a politically moderate person will hate-vote against that asshole. I don't think I'm the only one who feels this way.

What Mike wants to indicate though, that, if you look what you're essentially paying per hour and compare to what you're getting, it's still not such a bad deal.

The actual cost of visiting a theme park like Disney World or even Six Flags over Texas comes out to a lot more than just $10-$15 per hour. Someone whose job pays him above the six-figures level might think the cost to visit Disney World is trivial. If his income doesn't crack $50K then a Disney World trip could be a real hardship, especially if the wife isn't working full time.

Ultimately, most families simply can't afford a trip to Disney World. And that's one reason why the company puts in a lot of effort marketing to international visitors. They still try to sell this image that Disney World is for everyone, but that really isn't the case. More and more it seems to be for people who can at least afford a golf membership at a country club.

[Steve Guttag]

So, what do you do? Cater more to the more profitable "one time" guests and try to make their experience as good as possible, by reducing the loads on the parks or do you keep catering to locals, that essentially fill up the parks but are bringing in far less per butt-through-the-gate?

It's a delicate balance. While an AP devotee may be less profitable per visit...over the course of all of their visits, they will likely add up to more profit. Even without inflation, I know how much a year Disney no longer gets from our household and it is a pretty decent sum and we didn't go during the sellout dates so it is a loss not made up by others. On the heavily attended dates, yeah, one group not coming is filled in by a newbie. Heck, we use to get mailings that would have deep discounts for a slow weekend (yes, they have those)...one of our best trips was for a weekend...stayed at the Beach Club (Deluxe Hotel). Their deal made it worthwhile and we hadn't planned to go down so it was "found" money for them.

Disney has always been expensive and less into "thrill rides." Like it or not, part of that has kept their parks a bit more "civilized" and clean. They have some thrill rides but they are tame by comparison to other amusement parks...plus, most of their rides reinforce their "IP." Furthermore, people that have the dough to afford to be there tend to drop more dough while there...so, they are selecting a more profitable customer to begin with.

What I see as a big difference between then and now is the "value." Yes, you have to turn off reason while there when it comes to the cost of things (you are not at a supermarket...just like popcorn prices in cinemas versus homemade)...however, there comes a point where one feels stupid for paying such exorbitant prices. And, for me, there are just too many damn rules that lower the quality of the trip for me. I'm not paying to park at their hotel that I'm staying (they have just dropped that one, finally...that WAS the last straw for me). The park registration is a hurdle too high for me, the costs are poor value/entertainment and the Genie + scheme is an atrocity. It's the worst aspects of the high-entry cost but all rides are included combined with the ride "ticket" system of yore to make things extra expensive, if you REALLY want to ride it. As it stands, there is no incentive for Disney to move you through the parks faster as they get that enormous park ticket price to get in that they collect more of, the fewer ride you get on. Prior to the early '80s, the A-E tickets incentivized getting you onto more rides as that is how Disney could make more money. Once that was abandoned in favor of the Day-Pass, that incentive was gone.

Disney really should look at what has worked and what hasn't Fast Pass was a pretty big success as it did what one wanted it to do...people could get on the popular rides and while waiting for your time, you could do much of the other stuff. It flowed rather well. Yeah, if you are a newcomer, you might get caught by not knowing but MOST people that visit Disney do a fair amount of planning in advance (it is an investment, afterall).

As to the "woke" crap. Society is tender right now where there is a fine line that is transparent as to what feels appropriate for diversity of characters versus "checking boxes." I'll use a non-Disney early '80s movie, that I really liked, FAME, as an example. The lead characters (the ones we follow through the four years) looked quite a bit like of the times they were in (you had black, white, hispanic, male, female, gay, straight, jew, well-off, pretty much homeless...the next tier down would get you to Asian). Today, that cast of characters would be declared "woke" rather than what it was.

I don't think every movie needs to look like one was checking boxes. The characters should fit the story. The story has to be good, first. And, like it or not, the choices need to be entertaining to the masses. It's fine to make moves that cater to a niche but you can't spend a lot money on that because it isn't profitable. if you are going to drop $200M on a movie, you better think about how wide an audience it can capture. Ideology or one's version of "utopia" needs to stay out of the decision making process. Start with a great story and cast it with the actors that will deliver that story the best. Augment it with the right music/effect and production. But, if you go about with a checklist to form that, you you're going to miss as the checklist will be apparent to enough potential patrons.

[Bobby Henderson]

I think movies need to be more true to the given story with their casting. Quite a few locations in our country are very white, as are a decent number of career types. Some movie genres automatically have built-in opportunities to hire a more diverse cast. Military "war" movies are one example. I grew up as a Marine Corps brat. We had lots of Black and Latino neighbors on the bases where we lived. There was a decent number of Marines who had Japanese wives and mixed-race kids. This was over 40 years ago. I think the military was ahead of the curve in some respects when it comes to racial integration and diversity.

The thing that doesn't go over at all anymore is this "white-washing" crap, where lead characters in a novel or stage play are people of color but white actors get the roles in the movie adaptations. That has been very common in Hollywood for decades. The movie studios have only been getting called out on it lately. Anyone accusing critics of the practice as being "woke" are taking a lame, cop-out argument. The white-washing practice is bullshit.

Speaking of the term "woke," I can't help but cringe when I see white people using it. Most do not understand the origins and original intent of the term. When Black people first started using the term "woke" it was not an entirely positive term. While there are white Americans who genuinely care about the plight of minorities there are others who use the topic for their own selfish gain. They're virtue-signaling and not much else. Calling some white politician or celebrity "woke" could be an accusation the politician or celebrity is a fraud. They're only patronizing Black people to get their votes or money.

Members of the GOP could have done well by simply accusing limousine liberals as being full of shit with their claims of care for minority communities. Instead of sticking to a sensible middle ground they've weaponized the terms "woke" and "critical race theory" and are using them as a cudgel to somehow restore a 1950's version of America that never actually existed. There is a LOT of very unflattering, terrible shit that really did happen in American history. That should not be censored from history books. The idea that topics or whole books should be banned since they make a group of people in power feel bad makes us look laughably weak and ignorant. I think it's a shameful disgrace many Americans only first heard about the 1921 Greenwood District massacre in Tulsa via the TV series Watchmen on HBO. It's disgusting there is a bunch of Americans who want to go back to pretending it never happened.

[Mike Blakesley]

The actual cost of visiting a theme park like Disney World or even Six Flags over Texas comes out to a lot more than just $10-$15 per hour.

No it doesn't. That's about what a park ticket costs. You don't have to spend another nickel in the park. They even allow you to backpack in your own picnic, bottle 'o' water, etc. if you want. You don't have to stay in their hotel either, you can camp in a cheap campground if you want. All of the other costs are the same with any other vacation. Sure you can get into Yellowstone National Park for a lot less money than Disney World, but you've still gotta get yourself there, pay to stay there and eat while there. (And while it's cheaper than Disney, Yellowstone still isn't cheap.)

You seem to want to insist that Disney park tickets are overpriced, while ignoring value for money. If I go to a crap amusement park and it costs me $150, then yeah, I'm going to think it was a rip-off. But Disney parks are high quality places with a high standard of just about everything. It's no different than going to a fancy restaurant and paying a lot of money for a steak vs. going to a McDonalds for burgers. Both places will fill your stomach, but one is more expensive than the other, because it's better.

I agree with Steve about the Genie+ thing, I think it's a pain and it removes all spontaneity from your visit. That's one of the things we used to enjoy the most, just go and flow. You can't really do that anymore -- but, Disney is in a quandary. More and more people want to visit those parks. Their marketing has worked TOO well. There are a lot of people who don't feel their lives are complete unless they've done Disney. There's only a couple of ways they can manage the number of people -- limit the number of visitors, or raise the prices. They need to make enough money to stay in business AND keep upping the entertainment ante, because they are in a competition for the entertainment dollar. You can't just drop the prices because people feel like they're too high. That's the same argument that people use while whining about movie theater ticket prices, because they have no idea about what it costs to run a movie theater.,

Someone whose job pays him above the six-figures level might think the cost to visit Disney World is trivial.

Nah. I make WAY LESS than six figures. But I know the value of what I'm getting for my theme park dollar. I can't afford a private jet, but that doesn't mean they are too expensive. A thing is worth what it's worth. Disney has chosen to be at the high end of the theme park business, with a focus on high quality. It's expensive, yes. High quality tends to be expensive.

Ultimately, most families simply can't afford a trip to Disney World.

Probably true, but that doesn't stop a lot of people who really can't afford it from going there. The parks are jammed now anyway, can you imagine what it would be like if everyone could afford to go there? It's like I said somewhere a few posts ago, if people REALLY want something they usually find a way to afford it. Or at least finance it. Most people can't afford to buy new cars either, but the last time I checked, our local Ford dealer had a backlog of new vehicle orders, and this area ain't exactly swimming in money these days.