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  1. #1

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    2/8: Disney’s Reinvention Problem, Part III

    Kevin continues his series, and here you can continue your discussion about it!
    "Politics is the profession whereby the inevitable is made to seem a great human achievement" - Quentin Crisp

  2. #2

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    I thought DCA cost $1.4 billion, not $600 million.

    I think the studio park at Euro Disney cost $600 million max, but not DCA.
    Last edited by Evil Minion; 02-08-2005 at 07:52 AM.

  3. #3

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    $600 Million was the "theme park," the rest was the price tag for the Grand Cal.

    At first blush, that may seem like a backwards allocation of money. But think about it ...... how much time to you spend in DCA, and how much time do you spend in the Grand Cal? Eh?

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    The photos for Everest Expedition are awesome. That thing is going to be huge!

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    So the $1.4 billion was for the total expansion (DCA+hotel+DTD) ?

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    Quote Originally Posted by Evil Minion
    So the $1.4 billion was for the total expansion (DCA+hotel+DTD) ?
    Yes!

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    I've heard that DCA's actual price was closer to a billion then that

    I've also heard that DTD was paid for mostly by the buisnesses that would later move into the buildings (not sure how true that is) we already know that the city of anihiem payed for the parking garage

    oh well either way DCA could've been executed much better (or better yet been something totatly different)


    I'll agree on the investment in Go.com not making any since (what did Go even do? all I remeber is it making Disney's web addresses all have go in it which was rediculous, of course most of the web was still rediculous at that point in time)

    I don't think Disney has invested much in power rangers at all, it was a package deal when they bought Fox Family and Haim Saban's entertainment company rights or whatever (though Disney did move the show's production over to New Zealand and start making it contain less Japanese footage, they also brought back Jason David Frank *Tommy, aka the green ranger who was oh so popular when I was a kid*, yeah why is it that Disney will throw a bone to the Power Ranger fans but not to us theme park peoples :P)

  8. #8

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    Great article, Kevin- thank you!

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    Excellent article, Kevin!!! Very thorough! At some point, you should comment on the big anomaly to all of this which, of course, is Tokyo DisneySea - a park financed by Oriental Land Company which had Immerision towards Illusion on the brain rather than a re-invention ala DCA. The result is what people consider to be the greatest theme park experience SINCE Disneyland. Why? Because they stuck to that tried and true formula of a theme park which you brilliantly mention in your article. They also believed that if you spend money, you will make money. There's a reason why DisneySea cost more than DCA to build, yet it turned a profit faster. One can only hope an Eisner successor can have the vision for this model for success.

  10. #10

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    As far as reinvention goes, the Disney problems with creativity are becoming more fundamental to the company. Eisner has driven creative people out of the company for ages, and now there aren't any around to annoy him. So things stagnate.

    Witness the discontinuation of "traditional animation". Creative people are passionate, and temperamental, and as such, don't necessarily "fit in" to an organization. They upset the apple cart. Some managers can't deal with that.

    To acknowledge that it's time to do things differently means to acknowledge that you've been doing things wrong lately. Too many people are too insecure there for that to happen anytime soon.

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    Good column, Kevin. You've done the best job I've read so far of examining, rationally, Eisner's failings. You also put your finger directly on the problem facing all publically-traded companies, which is only exacerbated in this age of widespread equities investment.

    I would make several points, though:

    "The Disney parks themselves were doing just fine; it’s not like they were a drag on the business." - No, they weren't a drag on the business, but they were the bulk of the comapny's undervalued assets. Remember, it was the prospect of those many square miles of prime central Florida real estate that had Saul Steinberg and the other corporate raiders foaming at the mouth during the takeover scare of the early '80s, not the film library.

    "Eisner was brought onboard solely to shake things up and generate additional profit on the bottom line." - If it wasn't for his record of success at Paramount, I don't know that the white knight figure of Sid Bass, arguably as much the savior of Dinsey as Eisner, would've gotten on board. I don't know that a CEO with any other goal would've accomplished the same.

    "Buffett’s sole voice in the maelstrom of stock market gains was derided, ignored... but ultimately vindicated." - Well, Buffett's staggering personal fortune does wonders to elevate him above contrarian crank. If his fortune was 1% of what it is, I doubt people would seem him as a sober voice of reason, but instead a chump who missed the gravy train.

    "Result: stock prices in his Berkshire Hathaway company stagnated while the rest of the market rose to new heights." - Yeah, well, it's stock, seeing as how it's priced about an order of magnitude above the average NYSE entry, isn't exactly high volume.

    "The selection of a new CEO represents a historic opportunity – perhaps the ONLY opportunity – to adjust the expectations of Wall Street." - I don't know. I think that ship has sailed. I don't think Wall Street is going to buy into much of anything but cost-cutting and steady profit growth. Consider Costco. Last quarter, they announced they had something like 21% growth over the previous year, which shattered projections. Because they have the temerity(!) to invest in their company - primarily by paying their employees a living wage and provding better quality products - Wall Street analysts expressed "concern" about long term labor costs and handed them a 5% decline in stock value for the day.

  12. #12

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    Quote Originally Posted by innerSpaceman
    $600 Million was the "theme park," the rest was the price tag for the Grand Cal.

    At first blush, that may seem like a backwards allocation of money. But think about it ...... how much time to you spend in DCA, and how much time do you spend in the Grand Cal? Eh?
    How much money do you spend in DCA versus what you spend in GCH? One thing Pressler understood was to invest where there's a direct (and measurable) return. Too bad it results in a crappy, unDisney park.

  13. #13

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    Quote Originally Posted by sediment
    How much money do you spend in DCA versus what you spend in GCH? One thing Pressler understood was to invest where there's a direct (and measurable) return. Too bad it results in a crappy, unDisney park.
    the more there is to do in the parks the longer you'll stay and the more Disney can make off the rooms they have in their hotels (and the larger amounts of rooms they can sustain)

    the Hotels are dependant on the parks being worth building so you can't say that the parks arn't to be considered when building a hotel

  14. #14

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    Quote Originally Posted by Jspider
    the more there is to do in the parks the longer you'll stay and the more Disney can make off the rooms they have in their hotels (and the larger amounts of rooms they can sustain)

    the Hotels are dependant on the parks being worth building so you can't say that the parks arn't to be considered when building a hotel
    You're right, but that doesn't mean that Pressler and Eisner knew what they were doing.
    I mean, to have the carpet match up with the marble on the floor in the lobby -- amazing how they thought that was important enough to waste money on.

  15. #15

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    Kevin thank you for the article.
    The ideas and imaginations seemed stifled by Eisner for DCA. Putting a flood of money into DCA right away to save Eisner's blunder would just cause more Deficit right?
    1st Amendment-Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.

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