Disney CEO Bob Iger Shares Key Detail On Disney Parks $60 Billion Investment, Teases Expansion Scale
Disney just shared big news and details during The Walt Disney Company earnings call. There was a wide array of announcements around the media business plus an important detail for the promised Disney Parks expansion.
There were a number of big headlines today including the announcement of Moana 2, a big investment in Epic Games to create a new universe, that the Taylor Swift Era's Tour concert film will come to Disney Plus, and others.
As we wrote yesterday in my reflection on huge news on Disney CEO Bob Iger's “First Priority”, it's important to pay full attention to all aspects of the company even if you're largely focused on the theme parks. Today a key detail about the expansion of the theme parks was mentioned during the financial details of the call.
Expansion Details For Disney Parks and Resorts
During the earnings call just before this one, Iger and the CFO gave more details about the expansion of the Disney Parks. After that call, I dove into a full reflection on what the promised turbocharge of the Disney Parks would look like. Today we didn't get nearly as much news about the theme parks. It felt like the theme parks were the only one of the four priorities of the company that was not discussed or hit with a key news item.
A note – From our parks fan's perspective that is the case, but based on what Bob Iger shared on the earnings call the news around the new investment in Epic Games and the new “Disney World” is actually within the Disney “Experiences” segment. This segment is the home of the Disney Parks and is the official name of that division. We will be following the Epic Games news closely as it marks Disney's biggest foray into the video game world. See our full details and look into the Disney Epic Games news here.
The big news about the Disney Parks investment came from the new Disney CFO Hugh Johnston. “We plan to invest approximately $60 billion into the business over the next 10 years, of which approximately 70% is earmarked for incremental capacity-expanding investments around the globe which we expect to generate attractive returns” he shared.
That is an additional detail that we did not have previously announced during the announcement of the $60 billion investment planned for the Disney Parks.
In other words, the plans are that around $42 billion of the $60 billion planned will be spent specifically on increasing the amount of people that could visit the parks. Sure this could mean expanded walkways or new theater shows, but it really means that we are going to be getting new attractions and offerings that will increase the amount of people that can visit the Disney Parks and the Disney Crusie Line around the world. Think new expansions to the theme parks and perhaps another new ship for the cruise line.
This is also in line with the recent Disneyland news that there will be at least an investment of $1.9 billion there in the next decade as part of the approval of the DisneylandForward initiative.
One of the analysts asking questions at the end of the call pressed Disney CEO Bob Iger for details on timing and location. Bob Iger responded with the following answer:
Bob Iger:
“We are already hard at work determining where we are going to place our new investments and what they will be. You can pretty much conclude that they will be all over meaning every single one of our locations will be the beneficiary of increased investment and thus increased capacity including on the high seas where we are currently building three more ships. In a business that is obviously extremely positive to us. We may look expansively, at least in the next decade, in that direction.”
“I am not going to really give you much more of a sense of timing except that we are hard at work at getting these things conceived and built. We've got a menu of things that will start opening in 2025 and there will be a cadence of additional investment and increased capacity.”
From that response, there are a couple of things that stick out to us…
Key Takeaways From the News
The mention today and generally any news on this subject feels like a wait-and-see for bigger announcements. Disney keeps promising and hasn't yet delivered a set of solid announcements with dates but I still feel confident that day is coming. I would like to see them break ground quietly on some new projects so that we can get things moving forward and hit those 2025 targets. Universal's choice to build a ton of the new Epic Universe theme park before even confirming what lands are being built looks pretty good right now. Love that pace of construction! I'll give credit in this category to Disney for the quick turnaround of Tiana's Bayou Adventure which appears to be ahead of schedule but that is a retrofit of an existing structure while Epic Universe is net new.
It's interesting to note that there is perhaps a chance for even more future expansion on the Disney Cruise Line – there is already the Disney Treasure debuting this year but there could be further work. While I am as excited about the Haunted Mansion Bar as the next guy, I hope that we see a good balance between new ships and new theme park investment. The 2025 opening mentioned could be the larger Frozen presence coming to Walt Disney Studios Paris which we just discussed in our look at Disney Parks additions that don't yet have opening dates.
The other biggest takeaway from this earnings call is that there was no explicit theme parks announcement. After all of these teases and mentions from the past year we are getting to a point where it's time for a massive set of Disney Parks announcements. There are several reasons that we may not have gotten announcements. For Disneyland, we likely won't see anything substantial announced until after the City votes on the DisneylandForward initiative. For Walt Disney World, there could be concern around the state with the recent lawsuit. On top of those reasons, an announcement here could distract from the other high-profile news from the call. It feels like at this point they are purposely waiting to make a huge splash with everything at one time.
Generally, I walked away from the call a bit disappointed that there was no big announcement for the Disney Parks especially after Bob Iger opened the call promising big news. My heart skipped a beat when Iger used the Steve Jobs “one more thing” line to introduce a final news item. The news, which turned out to be that the Taylor Swift concert movie is coming to Disney Plus, is exciting but it's not “one more thing” level exciting in my book. I would've loved to have seen a big parks announcement there. Still, I truly believe we will get some great new rides for Walt Disney World and new rides for Disneyland, but it would sure be nice if they had announced it already.
There was plenty of news made for the other divisions. That's a good sign too because the more that they get those other divisions in line the more opportunity that there is for parks expansion. For instance, getting studios back to a place of success to keep creating and iterating on key franchises.
So, we remain with our dial tuned to the D23 Expo event in August where we will hopefully receive a wide slate of Disney Parks announcements for big expansion. In the meantime, we are excited about the opening of Tiana's Bayou Adventure and the big set of special events coming to the Disneyland Resort this year up until that opening.
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Sorry everybody if you don’t think this is right what I’m going to say but I need to and what I’ve read on this report and also one thing that they did not say and I’m going to say that in this. One thing they should not do is Disney forward. All we need is these two parks so please do not make another park. No more alcohol in Disneyland. If you want to do California adventure that’s OK to do one thing that they never put is they want to change cable channels to Disney which is not right for people who have cable I have cable but I don’t have Disney . Yes I may be the only one who doesn’t have any stream I do like cable, so I’m hoping they will not change anything on cable to go to Disney . Thank you for everybody reading this.
One thing I read on the website that I get they’re saying that they’re going to take cable channels away and put them on Apple plus that is something that they should not do and keep them on cable there are people who watch cable and don’t wanna watch it on Apple plus Please keep cable channels and everything that’s on cable. Thank you.
Jennifer, I don’t think that you have to worry too much about them getting rid of cable as it is now. They are trying to create products for people who want to leave the cable bundle as it exists.