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  1. #1

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    A Rare Glimpse at Disney's Finances

    From OC Register's Around Disney blog:

    A rare glimpse at Disney’s finances

    Anaheim is banking on Disney’s local properties and their retail tenants in the city to gross $10.2 billion from hotel lodgings and retail sales in the next fiscal year, which starts Wednesday.

    Such financial success will help the city meet its annual operating budget, ensuring that Disney contributes an estimated $32.3 million in taxes to Anaheim in 2009-10, not including property tax and other fees levied against the resort.

    Of that, $8.3 million would come from sales tax in Anaheim – largely from Disneyland, California Adventure and Downtown Disney — and $24 million from the so-called hotel bed tax in that city. In Anaheim, guests are charged 15 percent of their lodging bills for the hotel bed tax.

    “(Disney) really is the baseline of the budget,” said Anaheim Mayor Curt Pringle. “If we didn’t have Disneyland, Anaheim certainly wouldn’t have its vibrancy. I don’t believe there’d be a baseball team. I don’t believe we’d have all these entertainment venues.”

    Pringle said that the other hotels in Anaheim, which contribute a huge amount of revenue to the city as well, probably wouldn’t be around if it weren’t for Disneyland.

    ”Some would argue probably all of it is related to Disney, to some extent,” he said.
    Not too long ago, Disney’s tax contributions were even higher than the projections for this upcoming year.

    In recent years, the peak was in 2007-08, when Disney and its tenants raked in $11.5 billion, with $36.1 million going to the city’s coffers.

    These figures are a rare glimpse into the financial details of Disney — a very secretive organization that limits almost all financial disclosures to those the government forces them to publish four times a year as a publicly traded entity. But some numbers are buried in the city budget, because the revenue is tied to a massive bond project.

    Sylvia Choi, 49, of Fullerton, a stay-at-home mom at Disneyland a recent day near the Matterhorn, said she was amazed that Disney was still raking it in.

    “I’m surprised that in this down economy, a company is able to make so much money,” she said. “Sounds like the company is strong.”

    Though the resort is still making more money than it was five or six years ago, the decline in revenue at the three hotels on Disney property has been dramatic. Their revenues grew hugely as the economy reached a fever pitch leading up to the burst of the housing bubble.

    In ‘05-06, the Disneyland Hotel, the Grand Californian and Paradise Pier grossed $164 million in lodging revenue; in ‘06-07, they grossed $172 million; in ‘07-08, the three grossed $185 million.
    City budget documents show that Disney hotels in Anaheim will likely finish this year back at $172 million, while estimates suggest the hotels will finish ‘09-10 grossing $160 million.

    However, Pringle pointed out, Disney will open a new 250-room wing of the Grand Californian before the end of this year.

    Anaheim Budget Director Blaze Bruney said that tourism throughout the city has been sluggish over the past couple of years.

    City officials aren’t privy to Disney’s private financial records. But the Register, by taking the disclosed city revenues and combining them with each year’s sales and hotel tax rates, could figure out some gross revenues. The numbers only reflect a portion of Disney’s overall global revenue.

    Ticket sales for Disney parks aren’t taxed, so there is no way to figure out their attendance or ticket revenue from public documents.

    While Disney officials wouldn’t comment on the dollar figures, Disney spokeswoman Suzi Brown did issue a statement:

    “Here in Anaheim, where tourism drives the local economy, Disneyland Resort is proud to support the community in many significant ways,” she said.

    Debbie Moreno, the city’s assistant finance director, said the Disney tax revenues have been recorded as separate items in budget documents since 1997. That’s when the city borrowed half a billion dollars from bond investors to make improvements to the resort area and the sprawling Anaheim Convention Center.

    The city guaranteed those bonds against future revenue from Disney, among other revenue sources. As a condition to selling those bonds, law requires the city to show the amount of tax money coming from Disney each year. The revenue has always, easily, surpassed the minimum requirement.
    Even with the economy tanking, and the steep declines in revenue to Disney and its tenants in Anaheim, the current numbers are jaw-dropping to most.

    “Man, that’s a lot of money,” said park-goer Derek Chung, 16, from Brea.
    Last edited by 2DieFR; 06-29-2009 at 01:02 PM.

  2. #2

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    Re: A Rare Glimpse at Disney's Finances

    Interesting. Thanks for sharing!

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