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  1. #1

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    Disney to sell its theme parks?

    Discussed, but concluded "not likely" by Forbes magazine...

    http://www.forbes.com/markets/2006/0...markets20.html

    Disney Unlikely To Spin Off Theme Parks Business
    David Ng, 03.30.06, 5:03 PM ETThe Walt Disney Company is currently reviewing its strategy for its theme parks business, but a spin-off is unlikely, according to a recent report from Banc of America Securities.
    Disney recently reiterated its goal of achieving 20% domestic theme parks margin guidance within the next few years. It also stated that the parks can continue to deliver 2% to 3% attendance growth and price increases at or above inflation.
    Despite speculation that Disney could be willing to sell its hotels or possibly spin off the entire parks division, the company's chief financial officer recently implied that such steps are unlikely because of tax consequences following a restructuring, as well as the corporate philosophy that ownership and operation of the hotels remain an integral part of the theme parks' success.
    Disney's theme parks boast an enduring popularity, but they're unlikely to ever show the leverage exhibited in the past, according to Banc of America. The research firm cited rapidly increasing health-care and benefits costs.
    Banc of America reiterated a "neutral" rating and $27 target price on Disney.

  2. #2

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    Re: Disney to sell its theme parks?

    I don't even know why they would want to sell their theme parks sinces those are big money makers for Disney. The parks are the second most important division in Disney today, the first most important division in the company is the films of course .

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    Re: Disney to sell its theme parks?

    Quote Originally Posted by Disney Wrassler
    I don't even know why they would want to sell their theme parks...
    One word: Profit. Two words, if you want to get wordy, would be "Shareholder's Expectations". The article mentioned that the profit margins are getting to be slimmer, and it will be harder to make a profit, with health care and retirement costs rising through the roof.

    Yet another reason to switch to a government funded health care policy, but I digress.

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    Re: Disney to sell its theme parks?

    I don't really think they're BIG money makers. After all payments are due, I think the Disney Theme Park sector comes off even with it's hits and flops (Disneyland, Disneyworld.... and then Disneyland Paris and DCA).

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    Re: Disney to sell its theme parks?

    If they need continuous growth then they also need to continuously add hotels, shops, park capacity, and ultimately new parks (or cut budgets and raise prices as Paul Pressler did). I miss the old days when it was OK for a company just to have good revenues. These days that isn't good enough, you also have to have "Growth". The pursuit of that growth has led many companies to their doom.
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    Re: Disney to sell its theme parks?

    Quote Originally Posted by Dustysage
    If they need continuous growth then they also need to continuously add hotels, shops, park capacity, and ultimately new parks (or cut budgets and raise prices as Paul Pressler did). I miss the old days when it was OK for a company just to have good revenues. These days that isn't good enough, you also have to have "Growth". The pursuit of that growth has led many companies to their doom.
    Hear hear.

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    Re: Disney to sell its theme parks?

    Disney isn't going to sell off their biggest asset. the article was speculating because paramount put it's parks up for sale. but I think if Iger wants to keep his job he will keep that parks. I doubt if roy or diane would put up with the idea. and definitely jobs and lassiter won't . gee he wants to design rides to go with all those great pixar hits disney is gonna be putting out.

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    Re: Disney to sell its theme parks?

    It's not that the parks would be sold off necessarily but that they'd become a seperate entity. Therefore you can create a whole new IPO(stock offering) and the potential for "Growth" is better than solely relying on current revenue.

    It wouldn't be a sale but a restructuring. It's how companies also get around anti-trust cases.

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    Re: Disney to sell its theme parks?

    ^^^Like the way people used to say each ride at DCA was established as its own separate business?

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    Re: Disney to sell its theme parks?

    Quote Originally Posted by Dustysage
    If they need continuous growth then they also need to continuously add hotels, shops, park capacity, and ultimately new parks (or cut budgets and raise prices as Paul Pressler did). I miss the old days when it was OK for a company just to have good revenues. These days that isn't good enough, you also have to have "Growth". The pursuit of that growth has led many companies to their doom.
    There are fundamentally two types of publically held companies: growth and value.

    Growth companies, as the name implies, grow: Their annual revenues and profits grow substantially faster than the rate of infaltion, and consequently their stock prices change quickly as well.

    Value companies are companies that don't grow quiclky (or at all) but do have handsome profits year after year. These companies tend to return these profits to shareholders in the form of dividends. The bigger the dividend the greeater the value of the stock. The stock price tends to track dividends, whic are expected to grow slowly but steadily.

    So as an investor, one would buy growth stocks when young (they tend to be volatile, but in the long term grow handsomely), and start switching to value as one gets older (one wants stability in the golden years).

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    Re: Disney to sell its theme parks?

    Who who who who (I'm an owl)

    WHO has that kind of money that would meet Disney's asking price? Did the article say who would be a likely buyer?

    Not Six Flags, or Cedar Fair----neither of those have the money to purchase Disney.

    MGM Mirage? They don't have the theme park experience. They recently shut down the amusement park at MGM Grand. There's never gonna be gaming in Anaheim, and I don't know what kind of restrictions on gaming are in Orlando. They don't have the overseas experience to manage Tokyo and Paris. So, MGM Mirage is out. And, any other gaming company also.

    So, the question is, who would the likely buyer be? Sony and Time Warner don't have theme park experience. Is Universal Studios owned by Time Warner? The movie business isn't doing so great these days, I don't know if they would take on theme parks.

    Who's going to buy? Who has that kind of money at the ready, and experience?

    Maybe Wal-Mart. That'd be fun!

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    Red Face Re: Disney to sell its theme parks?

    Walmart. (just kidding)

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    Re: Disney to sell its theme parks?

    Quote Originally Posted by Frogberto

    Yet another reason to switch to a government funded health care policy, but I digress.
    I digress too: We can see just how well government funded health care works by looking to England, and watching the British flock to our physicians, because they can't find competent medical care over there.

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    Re: Disney to sell its theme parks?

    Quote Originally Posted by Disnerd
    Walmart. (just kidding)
    I can just see the rebranding and logo changeovers.

    It's happening already. Disney already partners with McDonalds, Target and such.

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    Re: Disney to sell its theme parks?

    DCA is a money loser and so is DLP. My money keeps going into these parks to support poorly planned and executed locations. Although it would be a mistake to spin, they do need to refocus on quality so that they get a descent return profit.
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