Attendance Tracker

[Disneyhead]

And really, we shouldn't even be discussing ESPN in this thread anyway (at least in-depth). Yes, ESPN's struggles affect WDW, but ESPN's struggles don't need to be debated - it's an industry wide problem that has yet to be solved.

We, as theme park fans, are benefiting because of the softening cable market. Comcast is aggressively expanding it's non-cable profit centers, ie: Theme Parks. It's the same thing that Dubai is doing because they know the oil gravy train is coming to an end.

 

[Frank Drackman]

We, as theme park fans, are benefiting because of the softening cable market. Comcast is aggressively expanding it's non-cable profit centers, ie: Theme Parks. It's the same thing that Dubai is doing because they know the oil gravy train is coming to an end.

Right, I mean Comcast saw the need to diversify their business, that is how they ended up with UNI and NBC, at one point, it was suggested that they would sell the park division, instead they bought Blackstone's share....and then they started building...more rooms, new rides.

To me, UOR would not look like what it does today if Comcast didn't see the need to expand beyond being the leading cable provider.

 

[Teebin]

But don't the cable companies still benefit from their broadband internet products? I would think that all is not lost when it comes to the cable biz.

 

[Disneyhead]

But don't the cable companies still benefit from their broadband internet products? I would think that all is not lost when it comes to the cable biz.

That is the main non-cable profit center for them, but there is a lot more competition in that market than in cable. The cable industry basically had monopolies granted to the by local gov'ts. The cellular unlimited data plans makes Comcast a titch grumpy.

 

[Frank Drackman]

But don't the cable companies still benefit from their broadband internet products? I would think that all is not lost when it comes to the cable biz.

correct. My believe is that cable tv services are at a very low profit level, the providers try to win the customer for vertical services, like internet and ad revenue.

 

[Mad Dog]

Right, I mean Comcast saw the need to diversify their business, that is how they ended up with UNI and NBC, at one point, it was suggested that they would sell the park division, instead they bought Blackstone's share....and then they started building...more rooms, new rides.

To me, UOR would not look like what it does today if Comcast didn't see the need to expand beyond being the leading cable provider.

No doubt. Comcast is taking Universal to a new level with their aggressive business plan. It's a whole new gear level that Universal never had the opportunity to pursue in the past due to previous weak ownership. And subsequently it has forced Disney to up their game plan, something that is doubtful would have happened without Comcast's continued "smells blood" moves.....Comcast is the theme park fan's best friend.

 

[UNIrd]

There is a lot of strategy in the moves Comcast has been making. I just hope Universal Creative can match the opportunities as they arise and stop playing it so safe. There's no point in building just ANYTHING to have it up in a year or two when the average shelf life of an attraction at UOR seems to be around 15-20 years. Disney is definitely one-upping them on the front of what's to come.

 

[Scott W.]

No doubt. Comcast is taking Universal to a new level with their aggressive business plan. It's a whole new gear level that Universal never had the opportunity to pursue in the past due to previous weak ownership. And subsequently it has forced Disney to up their game plan, something that is doubtful would have happened without Comcast's continued "smells blood" moves.....Comcast is the theme park fan's best friend.

If you went back 10 years, nobody could have imagined what has happened and what’s going to happen in their wildest dreams.

 

[Mad Dog]

If you went back 10 years, nobody could have imagined what has happened and what’s going to happen in their wildest dreams.

Neither can Universal Orlando management. They were kind of used to being thrifty and cautious before Comcast entered the fray. I'm convinced that if GE & Blackstone hadn't sold out to Comcast, that even with Hogsmeades' success, GE & Blackstone probably would have stopped with meaningful expansions and just pocketed the HP profits.

 

[zg44]

The theme parks provide some nice diversification, but the cable business is still the main business.

If you dissect apart Comcast's $185bn valuation, you get something like this:

Comcast Cable = $120-125 billion
NBCUniversal = $60-65 billion

If you break NBCUniversal down further:

NBC Cable Networks = $15bn
NBC Broadcast (main net) = $20bn
Universal Studios (Filmed Entertainment) = $15bn
Universal Studios (Resorts) = $15bn

Just to put it all into perspective. The main reason why the theme parks are so important though is that they're the fastest growing part of NBCUniversal by far. Within 10-15 years (after Beijing and the 4th Orlando park are fully operating), Universal Studios Resorts could be the largest single division in NBCUniversal.

What's important to remember is just how much Harry Potter (and other moves) changed the trajectory of the theme park division.

When Comcast bought NBCUniversal, they basically paid around $30-35bn overall and the values would have been something like this:

NBC Cable Networks = $12bn
NBC Broadcast (main net) = $10bn
Universal Studios (Filmed Entertainment) = $8bn
Universal Studios (Resorts - 50% stake in just US resorts) = $3bn

So that shows just how much the Resorts division has changed under Comcast (buying back other 50% of US as well as Japan and investing in China as well as land for a new park). Originally Comcast was just going to sell their remaining 50% stake in the US resorts for a few billion, and instead it's now comparable to the other 3 parts of NBCUniversal and on the path to becoming the largest single part.

 

[GadgetGuru]

That's pretty fascinating to think about. One could make the argument that the Potter IP is worth >~9B just because of the growth of the resorts. I would think that would make it the most profitable IP of all time (just based on that stat).

Obviously, it's flawed since Potter is only one part of the reason Universal has been kicking butt lately. Better marketing, other IPs, and smart hotel plays have plenty to do with it as well.

 

[zg44]

That's pretty fascinating to think about. One could make the argument that the Potter IP is worth >~9B just because of the growth of the resorts. I would think that would make it the most profitable IP of all time (just based on that stat).

Obviously, it's flawed since Potter is only one part of the reason Universal has been kicking butt lately. Better marketing, other IPs, and smart hotel plays have plenty to do with it as well.

It's probably actually true like that in some sense.

In an "alternate universe" where there's no Harry Potter IP, you can easily imagine Comcast spinning off Universal Orlando/Hollywood (along with Blackstone's 50% stake in Orlando) because it didn't really have that growth engine behind it.

I'm honestly not even sure what would have happened to them, but the best guess is some kind of tax-free merger with SeaWorld or something like that which would benefit Comcast, but I don't see how that combined company would really be able to take on Disney with no financial capacity and without Harry Potter's strength as an IP.

In that sense, the "trajectory changing nature" of the Harry Potter deal really does justify that kind of valuation as crazy as it sounds to value a theme park IP in that kind of range.

 

[Frank Drackman]

On the HP front, I honestly believe that Blackstone was done with UNI, seemed like they wanted to go w/ the Busch properties when Budweiser ownership left the US.

I really think they added the Poter stuff as a way to boost their asking price.

The one thing that killed me about what Comcast had done when buying NBC, if I recall correctly, they had 5 years to think about what they wanted to do with 30 Rock...I think they turned around and bought it within two...around the time they decided they liked the parks and they bought out the Blackstone stake in the parks.

Just seems like crazy money in a very short period of time.

 

[tielo]

Regarding Disney Springs, with all the discounts in the top summer season I guess it's not doing well either. Will rents have gone down to keep the shops occupied and will it effect Disney shareholders?

 

[quinnmac000]

Neither can Universal Orlando management. They were kind of used to being thrifty and cautious before Comcast entered the fray. I'm convinced that if GE & Blackstone hadn't sold out to Comcast, that even with Hogsmeades' success, GE & Blackstone probably would have stopped with meaningful expansions and just pocketed the HP profits.

Can vouch for this statement, on the Park side, some of the management got fired for being thrifty around 2 years ago. Director of Finance at the time was saying you guys are spending too much money and then got sacked.

 

[Teebin]

Director of Finance at the time was saying you guys are spending too much money and thenl got sacked.

I don't understand, spending to much money to what end? Were they going over a budget? His concern must have been based on some rule set forth by some higher up. Right?

 

[zg44]

I don't understand, spending to much money to what end? Were they going over a budget? His concern must have been based on some rule set forth by some higher up. Right?

That's more just corporate-speak for the tradeoff between putting available cash flow (revenue minus costs) towards either 1) reinvestment into the parks, i.e. the big $ projects we've gotten used to over the past 10 years, or 2) putting that money towards dividends.

Under GE-Blackstone, they'd gotten used to focusing on the 2nd option, but a lot of cash flow's been shifted towards the 1st option since...

 

[bob albert]

One could equate the parks division to the music industry. A lot in that industry has shifted to comprehensive deals with bands which pushes all sales to live concerts and merch. This is the area people will pay a premium for and those companies are still able to jack the price up. Disney has been charging through the nose with this in mind. It's a shitty area to be in as a fan somewhat.

 

[OLSinFLA]

correct. My believe is that cable tv services are at a very low profit level, the providers try to win the customer for vertical services, like internet and ad revenue.

You'd be surprised how low nowadays. Take local stations - nowadays they get $2-$3 per subscriber. Most markets have at least 5 so thats $10-$15 that comes in and goes out from your bill. I think I was told the return on TV is 10 cent on the dollar and on internet is 90 cents.

 

[Frank Drackman]

You'd be surprised how low nowadays. Take local stations - nowadays they get $2-$3 per subscriber. Most markets have at least 5 so thats $10-$15 that comes in and goes out from your bill. I think I was told the return on TV is 10 cent on the dollar and on internet is 90 cents.

Thanks, man, that stuff w/ local channels sort of demonstrates how broken the model has become. The locals use to make there money from ad revenue. Now they seem to rely on cable retransmit fees?

I'll never get this ad, at least where I live, a simple antenna will bring in the locals digitally. I've never seen Xfinty, but when I had cable, they compressed some channels...but it is pretty bad (to me), I guess the networks are giving up on the locals, so they are turning to cable to offset...just seems a little whack to me.