The Walt Disney Company: Is not Disneyland

[DisneyMouse]

Some Fun Numbers on the Walt Disney Company:
(congratulations to anyone who understand what I'm talking about here, because I think I've lost myself... I just spend two hours reading over the what Disney summited to the SEC. I now remember why I left corporate compliance.)

The following information can be found within the Walt Disney Corporation 2007 10-K, 2008 10-Q (2nd Quarter ended March 29, 2008), and first 2008 Proxy Statement. Which can be located at: http://corporate.disney.go.com/inves...y_filings.html

I've seen quite a lot posts talking about having Roy E. Disney or some other group trying to buy the Walt Disney Company so that Disneyland could be run right (or "what Walt would have wanted it"). To say the least, it was Walt himself who sent this company in motion within the public domain.

Anywho, I just wanted to through out some numbers to try and show people that Disneyland is such a small part of the Walt Disney Company (YES! The Disney Company is more then just Disneyland), and is easy to not really think about (if your Robert Iger; who might be making up to $27,699,201 at the end of the Company's fiscal year. He's worth it though!) when you're trying to make money for your company; and he's doing well, just like (YES, I'm going to say it!) Michale Eisner did (also the reason Eisner left with 200 million - he took the stock up).

The Walt Disney Co. is comprised of four components:
Media Networks: $7,781
Parks and Resorts: $5,497 (WDW/Tokyo Disney are our two money makers)
Studio Entertainment: $4,463
Consumer Products: $1,421
(Revenues in Billions for six months ended 07)

Disneyland is only a small portion of the "Parks and Resorts" revenues. So keep this in mind while wondering why the Disney Co. wants to spend it's money on one of their 24 other divisions (Parks and Resorts makes 25, but Disneyland is only sub category of the whole DLR, which isn't even their big money maker in this division!).

Disneyland is to the Walt Disney Corporation as Earth is to the Milky way.

The Walt Disney Company:
(This next part is about the figures, and what one would need in order to take this company over

As of January 7, 2008 there were 1,889,060,192 shares of common stock outstanding. Shareholders owning Disney common stock at the close of business on January 7, 2008 (the record date), may vote at the 2008 Annual Meeting and any postponements or adjournments of the meeting. One share is one vote.

The exercise price of the options granted in fiscal 2007 is $34.01 (the average of the high and low prices reported on the New York Stock Exchange on the date of grant; the closing price on that date was $34.39).

Via the same date as above, the Walt Disney Company was worth $59,060,635,614.

Though it might sound easy, buying the Walt Disney Co. wouldn't be about simply having 60 Billion dollars. You would first need to get a majority of stock in the company, then proceed with a hostel takeover, while filing a Proxy Statement, to request for the stock holders to sell their shares (much more complicated then just that, but you get the gist). It would actually be easier so by the Disneyland Resort from the company. Then again, that would be as easy as California trying seceding the Union; which as we all know, wouldn't happen without a few words from the rest of the states...

As of May, the largest two stock holders in the Walt Disney Co. where:
Steve Jobs - 7.3%
FMR LLC1 - 5.5%

So, to say the least. The Walt Disney Company has become a unstopping entity, who's only obligation is to the majority of the stockholders (who, are in the business so they can make money). If that means cutting corners at a (Disneyland) theme park, then that's what they'll do (are doing)... It's a shame they don't take some notes from the Oriental Land Company and what they've done with Tokyo Disney Resort in Japan (who coincidently read the book Walt Disney wrote about the operation of theme park)...

[ashley solo]

There's only a few things that I got out of Traditions... and how huge the Disney Company is was one of them.

[Mojave]

with 1,671,526,559 stock holders

Are you sure there are 1.6 Billion stock holders?

[DisneyMouse]

Are you sure there are 1.6 Billion stock holders?

You're quite right, I was counting how many votes where used. Thank you Mojave Point being, the Disney Company is bigger then simply Disneyland. There was a time when everything was about Disneyland, but that time has long since past.

By the way, I reread that whole proxy statement... thanks!

[composerboy]

I'm getting so tired of hearing how Disney should develop and operate it's US parks like OLC. They simply can't. The economics, culture, per-cap spending patterns that make the kind of things you see at TDR possible do not exist anywhere else. The Japanese simply spend more money at the parks than anyone else. Anywhere. That is what makes the things you see there possible - it's not incompetence on the part of US managers or WDI.

[ttztotdca50]

If Disneyland brings minimum profit, is it possible that eventually it will cost more to run than the profit it brings? That's really scary...

[ashley solo]

If Disneyland brings minimum profit, is it possible that eventually it will cost more to run than the profit it brings? That's really scary...

I do not know the answer but I think that's a good question.

[ttztotdca50]

Well kinda like the penny...the cost of making it is almost as much as its worth.

[DisneyMouse]

Well kinda like the penny...the cost of making it is almost as much as its worth.

I highly doubt the Company would ever give up such an icon. At the same time, though Disneyland isn't their money maker park, it's also not the lowest one. Not to mention even Disney Paris brings in a really good amount of money, as does DCA.

[lazyboy97O]

So, to say the least. The Walt Disney Company has become a unstopping entity, who's only obligation is to the majority of the stockholders (who, are in the business so they can make money). If that means cutting corners at a (Disneyland) theme park, then that's what they'll do (are doing)... It's a shame they don't take some notes from the Oriental Land Company and what they've done with Tokyo Disney Resort in Japan (who coincidently read the book Walt Disney wrote about the operation of theme park

The Oriental Land Company does not act the way they do out of some sort of benevolent admiration of Walt Disney. There are contractual obligations that they must uphold.

[mainstreetcm]

The Oriental Land Company does not act the way they do out of some sort of benevolent admiration of Walt Disney. There are contractual obligations that they must uphold.

Not that I disagree with your statement, but I find it sad that the reason the OLC keeps its parks top notch is because of "contractual obligations" when the US parks pale in comparison to them.

Its like a double standard. TWDC makes another company uphold the highest quality while they themselves cut creativity in the name of the bottom line.

[DisneyMouse]

The Oriental Land Company does not act the way they do out of some sort of benevolent admiration of Walt Disney. There are contractual obligations that they must uphold.

I think you're missing the point here. Though on the sidetrack, at no point did I say that OLC wasn't in the business of making money, or aren't hearing to contractual obligations. Though mentioned, "read the book Walt Disney wrote about the operation of theme park." Meaning they are going about running their theme park as Disneyland used to be run... and I'm sure one of the "contractual obligations" isn't to put as much money as they can/are into their Resort...

Though on the fun side, the Walt Disney Co. doesn't own either Hong Kong Disneyland, or the Tokyo Resort. The Walt Disney Company owns a 43% interest in the Hong Kong Disneyland Resort through Hongkong International Theme Parks Limited; and Disney is entitled to receive certain royalty payments relating to the operations of the Tokyo Disneyland theme park; this was an agreement back in 1988, though if you want to read into this, one may suggest that as long as they're not using the Disney name maliciously, it's their right to own and operate the park as they see best fits their Company.

[lazyboy97O]

I think you're missing the point here. Though on the sidetrack, at no point did I say that OLC wasn't in the business of making money, or aren't hearing to contractual obligations. Though mentioned, "read the book Walt Disney wrote about the operation of theme park." Meaning they are going about running their theme park as Disneyland used to be run... and I'm sure one of the "contractual obligations" isn't to put as much money as they can/are into their Resort...

Though on the fun side, the Walt Disney Co. doesn't own either Hong Kong Disneyland, or the Tokyo Resort. The Walt Disney Company owns a 43% interest in the Hong Kong Disneyland Resort through Hongkong International Theme Parks Limited; and Disney is entitled to receive certain royalty payments relating to the operations of the Tokyo Disneyland theme park; this was an agreement back in 1988, though if you want to read into this, one may suggest that as long as they're not using the Disney name maliciously, it's their right to own and operate the park as they see best fits their Company.

It is not the Oriental Land Company's right to own and operate the park as they see fit. Disney had doubts that another company would operate a park to the high standards that Disney had come to be known for at Disneyland and Walt Disney World. So to ensure that everything was the same across the board, Disney made it a requirement that the Oriental Land Company do things "by the book that Walt wrote", as you put it. These requirements probably play little into the picture now with the success of the resort and its way of operating, but they are there.

Also, none of the international parks are fully owned by Disney. Including Disneyland Resort Paris, as per French law.

[mycroft16]

This is an interesting read that lays out some details about the Disney OLC agreement in a little more clarity:

http://www.mouseplanet.com/articles.php?art=mt010723dk

Specifically the first green and first yellow sections. After that it becomes comments.

My favorite statement has to be this one though:

You may have seen pictures of Tokyo DisneySea. If you actually see it in person, I guarantee that you will lack adjectives to adequately describe what you see. The creative talents of Walt Disney Imagineering are alive and well. Left to an unlimited budget, they would design the next Wonder of the World. Failing the unlimited budget, they designed Tokyo DisneySea

To sum up the agreement it looks as though OLC is constantly trying to keep costs down while Disney is constantly trying to keep quality up. So they meet in the middle and both live happily. Disney gets high quality and OLC gets middling costs which it can live with.

[Uncle Bob]

I agree with your main point that WDC is much more beyond DL. To me that's pretty obvious and I really don't see how anyone could not see that. Anyway, I really don't see how that means that DL should be overlooked with regard to spending though, and what you say has nothing to do with DLR's profitability, which I would argue is much more important than its gross income.

WDW brings in a ton of money, and costs a ton to run. Any more increase in gas costs, and WDW will be losing money for the company, DLR is at absolutely no risk of doing so, thus, if one resort were to close it would be WDW not DLR. That's the reality.

I also disagree with your assesment of Iger's compensation. Nobody is worth that much money. This kind of BS is destroying our country, thinking CEOs deserve huge salaries because the company they run makes money. I don't see how someone taking a extremely popular and recognized name like Disney and basically just continuing to meet expectations should be that revered. I don't think CEO's deserve so much money when all they are doing is acting as sheppard for the work of others and standing on the shoulders of greatness.

What kind of idiot would you have to be to make WDC lose money? What is your standard for what WDC should be making? I do not believe the stock has been overly impressive at all so I don't think that he deserves nearly that much money. What did he ever do to deserve that, have a role in producing a couple hit ABC shows, inherit the work of a genius like Walt and now he deserves 27 million a year, while workers are losing their houses and can't afford gas to get to work. I'm sorry but until American's start to pull their heads out of their rear ends, this is going to become a third world county within the next 20 years, and WDC won't have anyone to reap these huge profits off of, at least in this country.