MiceAge Disney Parks Update: Iger’s Ire

Written by MiceAge. Posted in Disney, Disney News, Disneyland Resort, Features, MiceAge Update, Walt Disney World

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Published on November 26, 2013 at 3:00 am with 225 Comments

The holiday season is in full swing, and huge crowds have descended on the Disneyland Resort this week. Both parks have never looked better with Christmas decorations covering nearly every land and corner of the resort. The new Winter Dreams and Viva Navidad shows in DCA are wowing audiences while the older Christmas classics still shine at Disneyland Park. With DCA now fixed and on a path to pull in over 10 Million visitors in 2013, it almost seems as if the Disneyland Resort has entered a new golden age. But in just the last two weeks dark storm clouds have gathered on the financial horizon, and a cold wind is blowing in from Burbank this winter that will be putting an immediate chill on Anaheim’s future. In this unfortunately downbeat update, we’ll fill you in on why so much of Anaheim’s future is now on hold, why it all happened so suddenly, and what just got the axe and what is hanging by a thread.

 

There’s bad news ahead. Got that comforting bowl of oatmeal ready? Oh, heck, might as well skip straight to the Bloody Mary, you’re going to need it.

 

My Magic Bust

Ever since Cars Land and the refreshed Disney California Adventure opened to rave reviews and huge crowds in June, 2012 the question in TDA has been “What’s next?” for Anaheim. And as the Disneyland Resort pulled in profits much stronger than predicted through 2012 and into 2013, Burbank and TDA were comfortable enough to let the Imagineers come up with plenty of new projects for both Disneyland and DCA. And we’ve been here to fill you in on which of those projects were moving forward and that had both the Imagineers and TDA planners so excited. But while times were fat and happy in Anaheim in recent years, the mood has been darkening this year out at Walt Disney World. While Anaheim spent the last few years investing heavily in new rides, shows and expansions for the parks, the Orlando team was investing in sterile technology and decidedly un-glamorous infrastructure needed to run the massive NextGen programs. The NextGen additions have only shown up in the parks recently as MagicBands, gateless theme park entrances, Fastpass+ entrances on rides as minor as the Teacups, and some interactive queues.

 

The NextGen project kept demanding more money and more time, as internal deadlines to go live with key elements of the plan tied to the MagicBands went by the wayside and were replaced by an endless series of small-scale tests instead of broad implementation. With each key element going live, the Operations teams in the field would report back with a laundry list of problems and customer aggravations with the system. It should be noted that the Operations folks saw all these problems coming years ago, but their protests and suggestions to not ditch time-tested procedures or overly complicate the customer experience fell on deaf ears.

 

But what the NextGen backers like Jay Rasulo lacked in basic theme park operations experience, they made up for by being high up the food chain in Burbank, and the program kept pressing forward while it went over budget and behind schedule. The execs pushing NextGen and glossing over its early failures have no front line experience running a theme park, nor do they have passion for providing the park visitors with a great experience, which is the fatal flaw behind the MagicBand’s problems.

 

The end result is that as Disney entered its new 2014 fiscal year a month ago, the results of years of NextGen investment weren’t paying off as they’d been promised to do strongly by Fiscal Year 2014. Not only is NextGen not paying off financially yet, it’s created a laundry list of additional fixes that will require more investment into 2015. While the executives in charge of the NextGen project have been dancing around the issue for the past year, by November the results thus far were clearly a disappointment to Burbank. And while the NextGen project was rolled out first at WDW, it was sold to Burbank and budgeted under the assumption that most of the concept could be duplicated in Anaheim as well. But one thing the NextGen project has done well is churn out tons of customer data and given the Operations folks lots of new experience with frustrated visitors and knowledge of what doesn’t work with the system. Much of that data conflicts with Anaheim’s demographics (dedicated locals and casual tourists on a bigger California vacation) and makes NextGen even less workable for the Disneyland Resort. Which makes the WDW financials look even worse to Burbank.

 

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Some in Anaheim will breathe a sigh of relief over that, like the Operations folks who took one look at the plans for a new Disneyland main entrance devoid of turnstiles or gates just steps from Harbor Blvd. At WDW the theme parks are relatively protected by being deep within Disney property, and behind layers of protection in the form of parking toll booths and various transportation systems required to get you to the entrance. But in Anaheim, the park main entrances sit on the busy Esplanade that has no safety valve to prevent large crowds from walking in off the street. The recent crowds who crushed against the park gates trying to get in to the 24 Hour Party would be uncontrollable if the gateless MagicBand system proposed for Anaheim was installed at Disneyland’s main entrance.

 

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Under this darkening cloud of financial news, Bob Iger and all of Disney’s top executives had a very tense series of meetings and presentations in Orlando two weeks ago. The NextGen program was discussed at length at this executive gathering, on the record and off, and it was impossible to sugarcoat the fact that the NextGen program is wildly over budget, way behind schedule, and not pulling in the extra profits it was supposed to. A furious Bob Iger returned to Burbank and has now told WDI to halt all work on all major projects planned for the American parks, Disneyland Paris and Hong Kong Disneyland. And in a follow up meeting with Tom Staggs last week, WDI and TDA had the financial rug yanked out from underneath all of the smaller projects being worked on specifically for Anaheim and Disneyland’s 60th Anniversary. The result is that dozens of Imagineers who were working on Star Wars and other plans for Anaheim have now been told to stop their work and are reassigned to work on Shanghai Disneyland (and its conveniently separate budget) for at least the next 90 days.

 

Luckily, there are still some key attractions for Shanghai that are behind schedule in Imagineering and could use the extra help, like the Steve Davison produced musical boat ride through the massive Fantasyland Castle there. But after the 90 day hold period, if the moratorium on theme park spending isn’t lifted, layoffs will begin to spread through the Imagineering campus in Glendale. The financial freeze isn’t exclusive to Glendale either, as Disneyland President Michael Colglazier is now tasked with carving out as much extra savings as possible from the 2014 operating budget for Anaheim, and those cuts will be coming this winter.

 

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This is a big deal folks. While individual projects at WDI have had their budgets put on hold in the past, sometimes never recovering, this is different. The concept of stopping all work on all projects for all existing theme parks, except for the Oriental Land Company owned Tokyo property and Shanghai Disneyland, is a rare wide-reaching blow to WDI. What follows is a status report on the various projects and rumored plans we have been telling you about for Anaheim over the last year.

 

Star Wars in Tomorrowland – On Hold

Originally the plan to add Star Wars to Tomorrowland was going to be divided into two phases; a first phase involving some placemaking and a replacement for Captain EO to be finished prior to the 60th Anniversary, and a second phase kicking off in late 2015. The second phase included the Speeder Bike E Ticket ride, Ewok village and forest where Autopia currently is, a Millenium Falcon walk-thru where the PeopleMover platform is, tearing out the decaying PeopleMover tracks and moving the Astro Orbiter up on top of the Space Mountain concourse, and turning Tomorrowland Terrace into an interactive Tatooine Cantina restaurant show. All of that is now on hold indefinitely. Although Anaheim gets off a bit easier with its Star Wars plan on hold, as the plans for many of these Star Wars elements coming to Disney Hollywood Studios in WDW have just been cancelled outright.

 

Monstropolis in DCA – Cancelled

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This was the plan to turn the sleepy and decidedly unattractive corner of DCA’s Hollywood Land section into a Monstropolis mini-land. The existing Monsters Inc. dark ride was to remain, but MuppetVision and Stage 17 would be torn out to become an elaborate family-coaster based on the famous door sequence from the Monsters Inc. film. A new restaurant was planned, and that entire section of the park was to be reskinned and extensively rebuilt. This one got cancelled outright rather than the hold status of Star Wars, as Cars Land looks like it can continue to headline a very profitable DCA for at least several more years. There are some in WDI who feel the completed plans for Monstropolis at DCA will never see the light of day again.

 

Fantasyland Dark Ride Re-Imagineering – On Hold

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This is the plan to plus up and dramatically upgrade the five classic dark rides in Fantasyland; Alice In Wonderland, Peter Pan’s Flight, Mr. Toad’s Wild Ride, Pinnochio’s Daring Journey and Snow White’s Scary Adventures. This was being lumped into a marketable plan for Disneyland’s 60th Anniversary, and the five major refurbishments were to begin in phases this winter and be completed by early ’15. The only thing still a go is the outdoor track replacement this January at Alice In Wonderland. But all of the show upgrades once planned for Alice, like the impressive new Queen of Hearts animatronic with the digitally rear projected face, are now on hold.

 

The Little Mermaid Re-Imagineering – On Hold

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This was the concept to fix the big Under The Sea room in this Omnimover ride with new lighting and less obtrusive infrastructure for the ceiling-mounted mechanics. New projection effects, tweaked animatronics, and reworked staging for several of the smaller scenes in this ride were also planned. A three week rehab was going to be needed, which particularly dooms this one because the Orlando team hates the idea of closing this ride in Magic Kingdom. This had to pencil out for installation in Anaheim only in 2014, with Orlando not willing to commit, which makes it iffy if this plan will be reborn.

 

Soarin’ Over California HD – Still A Go

This is the plan to close Soarin’ for almost four months, from early February to early June of 2014, to install all new digital projectors and upgrade the audio and theater experience. This would be phase one of the project to switch over to the new world-wide Soarin’ film that will debut first at DCA in 2015 before it opens at Shanghai Disneyland in early 2016. Soarin’s HD upgrade is still happening at DCA since the projectors and new equipment were budgeted as part of the Shanghai project. Although the mandate to stop all work everywhere at WDI has key Imagineers wondering if Soarin’ HD will also end up being put on hold a week or two from now, if the sharp pencil boys can figure out a way to delay the equipment contract for the DCA theaters. In Soarin’s favor, the new film in ’15 could be puffed up into a major marketing push for Disneyland’s 60th, due to the sudden lack of much else for that anniversary.

 

60th Anniversary Plans at Disneyland – On Hold

Anaheim’s planning for these concepts had just kicked off, with the first 60th Anniversary confidential strategy meeting in TDA’s executive conference room held back in early October. Just seven weeks ago the TDA executives were upbeat and planning for a big party in 2015. A new nighttime parade for Disneyland, a new day parade for DCA, plus new fireworks and various décor packages around the Resort were all being planned. The Fantasyland dark ride project was also going to be included in the 60th from a marketing standpoint, but that money was coming from a separate budget.

 

But everything for the 60th is on hold now. It’s the new parades that are most in jeopardy, as they have a much longer lead time for design and construction than new fireworks and decorations. Unless Burbank lifts the spending moratorium by spring, the new parades won’t make it. TDA is now working under the assumption that there won’t be much of anything for the 60th. With nothing new of any substance, the 60th Anniversary might devolve into a few sparse decorations, Twitter meet-ups from the chirpy Social Media group, and 60th logo t-shirts for sale in The Emporium.

 

DIVE! DIVE!

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This full-stop from Burbank has taken lots of folks in TDA by surprise. And there’s already a few glaring examples of this sudden mandate from Bob Iger. Most notably, the Submarine Voyage just showed up on the latest refurbishment calendar for Disneyland.

 

By now Bob Iger was supposed to have announced the plans for the Star Wars invasion of Tomorrowland. Bob had said on an investor conference call back in early August “We’re going to continue to invest in Disneyland. We’ve got some pretty exciting things that we’ll be announcing over the next couple of months.” And even as recent as November 8th Bob told Bloomberg News “The only thing I can share, which actually I don’t think we’ve talked about much, is there is a fair amount of development going on at Disney Imagineering right now to expand the Star Wars presence in California and in Orlando and eventually in other parks around the world.” But that statement was a few days before he flew out to Orlando and was updated on just how dire the situation with NextGen was, and then became quite aware that the Board of Directors was not going to allow him to keep spending on the parks with NextGen in such a sorry state.

 

The Submarine Voyage was already slated to close in January as a cost-saving measure, in advance of work beginning on the Ewok village and Speeder Bike course above. The subs are currently showing up on internal planning calendars as being closed for refurbishment from January 4th to September 26th, 2014. But that’s just a result of the clumsy way TDA’s planners track unknown refurbishments, as they slot it to run for the rest of the fiscal year until a real end date can be decided on. Friday, September 26th is the last working day of Fiscal Year 2014 for the cubicle worker that publishes the planning calendars, and thus that shows up as the end date for this fake “refurbishment” that is really just a permanent closure.

 

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But that plan to close the subs had been approved by TDA last month when they were working under the timeline that had Star Wars being announced before the holidays. The submarines themselves are in dire need of repair, mainly due to their electric propulsion system and the batteries that power them. When the submarines were brought back in 2007 for the Finding Nemo voyage, the old diesel engines were scrapped in favor of new electric drive motors powered by batteries that are charged underwater via a type of linear-induction system. This made the submarines cleaner and earned the Resort smog credits with the Southern California Air Quality Management District, which allows Disneyland to perform many more fireworks shows per year than they normally would. But the batteries and power systems are not aging well, and the submarines are in constant need of repair. Many times, a submarine can’t make it through an entire operating day and has to be towed back to the dock for maintenance on the battery packs.

 

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The lagoon itself is also an expensive facility to maintain, and is due for a full draining and refurbishment if it’s to continue as an operating attraction, especially one with a Pixar connection. Add in the fact that the submarine operation requires a huge amount of Cast Member labor to keep running, for a relatively small hourly capacity of just 800 riders per hour, and the Submarine Voyage has the distinction of being Anaheim’s most expensive attraction to operate by far. That makes it an easy target for panicky TDA executives looking to cut costs, and the Star Wars announcement was supposed to give them the cover they needed to quietly close the 54 year old submarine attraction for a second time.

 

Unlike in 1998 however when Paul Pressler weaseled his way into the first closure with no replacement plan, this closure would be permanent as the caverns show building was to be demolished to build the Ewok’s forested home planet. But now that the Star Wars plan is on hold thanks to the horrible condition of WDW’s NextGen project, TDA is going to go ahead with the closure falsely labeled a “refurbishment” with the hopes that Burbank will reopen the purse strings later in 2014 and the Star Wars announcement can finally be made to save face. Fans of the submarines would be wise to get in their last rides before January 4th.

 

None of this is good news, obviously. Disney’s Parks & Resorts division is the goose that lays the golden eggs for the company, routinely bringing in Billions in operating cash fiscal year after fiscal year, while more volatile divisions like the Studios or TV networks can go from feast to famine and can bleed money suddenly. But the NextGen project at WDW has already cost so much money, and is so far behind schedule, that the lack of profit being generated by its stunted condition is now too glaring a problem for Burbank to ignore. Until the Florida team responsible for getting NextGen off the ground and getting all those tourists to happily plan their vacations down to the minute months in advance can show some real progress and profits from the system, there will be little to plan for at most of the other Disney parks around the world. There are now nervous senior executives with careers on the line, not to mention Bob Iger’s stellar record of wise investment that could be irreparably harmed if the word MagicBand joins New Coke and Edsel in the history book of corporate failures.

 

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In the short term, the Disneyland Resort will still have a sparkling holiday season this year, as the Resort has never been more popular with locals and tourists alike. Winter Dreams is so popular that a third show has just been added nightly through Christmas, and the wonderfully festive Viva Navidad show in DCA is rating off the charts on visitor satisfaction surveys. And Disneyland itself has never looked better this season with lavish decorations over freshly maintained facilities, and finally an end in sight for the fall protection work at older rides and buildings around the park. But when all the Christmas decorations are packed away in January and the crowds go home, this will be a long winter that could lead to a much bleaker future for Anaheim. We will keep you informed if anything changes, but for now there’s not much for Disneyland fans to look forward to through at least the 60th Anniversary.

 

Well, that’s our unfortunate update for today folks. We know this was painful to read, but once you’ve recomposed yourself, we’d love to hear your thoughts below. How would you like to see this situation resolved and how can Disneyland recover in time for the 60th anniversary?

 

We are often asked how you can contribute to help keep these updates coming. Today, instead of sending money, we simply ask that you share this column with your friends and family. It’s as simple as clicking the social links at the top of this page!

 

 

About MiceAge

The MiceAge crew was started by Al Lutz in 2003, and is committed to bringing you the inside Disney story that you just can't get anywhere else. As much as we'd all like to see more frequent rumor updates on the site, we only publish when reliable news and rumors are available to share. Generally, you'll find a new MiceAge news update from Al and crew once or twice a month on Tuesdays. The MiceAge news Editor can be reached at: [email protected]

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225 Comments

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Comments for MiceAge Disney Parks Update: Iger’s Ire are now closed.

  1. One item I’m sure Disney has had to consider since October 1 is the cost to consumers of the Affordable Care Act. In my situation the cost is an additional $7,200 per year for health insurance. This hit to to my discretionary income is equal to two weeklong trips to Anaheim for my wife and I. So, what will give? Only time will tell and I’m sure Disney will be waiting to see what impact this loss of discretionary income for potential guests will have on future bookings and AP sales before releasing any holds.

  2. [...] to MiceAge, it appears that the Mouse House is getting cold feet about the Star Wars expansions in their [...]

  3. [...] Miceage reports that the Star Wars themed Tomorrowland may be on hold due to budget busts: [...]

  4. Seems that projects already underway aren’t casualties, like Disney Springs, Soarin, and Avatar. That’ll help Disney compete with Universal in Florida, but the Wizarding World of Harry Potter at Universal Studios Hollywood could easily cut back DCA’s attendance gains in the future, especially with California tourists who are less inclined to spend their entire vacation within a Disney resort.

  5. [...] Source SlashFilm via MiceChat [...]

  6. [...] to MiceChat, Disney’s NextGen theme park expansion program is “wildly over budget, way behind [...]

  7. [...] to MiceChat, Disney’s NextGen theme park expansion program is “wildly over budget, way behind [...]

  8. How come Monstropolis was canceled and not put on hold like the rest of the projects? Did they cancel the project because they have another one in the wings?

  9. [...] for all parks – including work for the 60th Anniversary.  You can read the full article here.  It’s long, but really interesting.  Basically, all the Disneyland construction rumors [...]

  10. Praise the heavens monsters backlot is cancelled! Now for star wars to get the same. Tomorrowland and the backlot both need MAJOR updates. Star wars and monsters are not the right updates. Monsters should not have any more movies made and nothing beyond a simple ride should ever be built with that theme. Star Wars is going to have many more movies and experiences and justifies its own land or entire park. Tomorrowland is tomorrowland.

  11. Looks like the rumors about Finding Nemo Submarines closing are false. Some of the rumors on here are started to get debunked since this article has no factual evidence to back up their claims.

    • Please explain what portion of the rumors have been debunked yet? We said here that the Subs would be going down for what the TDA would be calling a “Refurbishment” from January 6th to the end of the fiscal year 2014. That just occurred.

      http://disneyparks.disney.go.com/blog/2013/12/finding-nemo-submarine-voyage-at-disneyland-park-to-close-for-refurbishment-january-6/

      However, what will be happening once the ride closes is still anybodies guess and boils down to simple economics. If Iger finds more serious issues than expected with the MyMagic+ program roll out then one of two things will happen:

      A) The lagoon will sit, stagnant either with or without an obligatory draining and touch up.
      B) The cost of refurbishing and running the subs will end up being lower than announcing and beginning construction on Star Wars expansions in Tomorrowland and the ride will reopen sometime after September 26th

      But if all is fine in Florida, and major capital can again be allocated to big projects, then option C will happen.
      C) Iger will have put out the MyMagic+ fire and the Subs will be closed for good to make way for Star Wars expansion.

      Each one of those are possibilities. But, what we said about the subs going down for “refurbishment” came to pass.

      • The article also points out that “The result is that dozens of Imagineers who were working on Star Wars and other plans for Anaheim have now been told to stop their work and are reassigned to work on Shanghai Disneyland (and its conveniently separate budget) for at least the next 90 days.” How can that part of the article be true if imagineers just updated the jingle cruise with more holiday overlay. I thought all of the imagineers were sent to Shanghai.

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