Should We Believe Disney about Park Expansion?
Disney just sent its fans some befuddling mixed signals.
First, Disney promised $60 billion in theme park development over the next decade.
Then, almost immediately afterward, Disney executives suggested that the so-called “turbocharging” of the parks would occur later.
Specifically, Disney said that it had scheduled the turbocharging for the second half of the decade.
Another way to say that is, “We won’t make dramatic park expenditures for five years.”
That’s weird because Disney filed an 8-K document telling the American government and Wall Street that park expansion was in the offing.
Also, Josh D’Amaro just claimed Disney is “going all in” with Indiana Jones at Disney’s Animal Kingdom.
Obviously, we’re all confused. So, should we believe Disney about impending park expansion or not? Let’s discuss.
Reason to Believe Disney: The Return of Bruce Vaughn
We can’t run away from the fact that Walt Disney Imagineering has been through some stuff lately.
Disney icons like Bob Weis and Joe Rohde left the company over the past few years.
Losing them is like Cleveland losing LeBron James (twice). You’re not filling that void quickly.
To Disney’s credit, the company recently took steps to show that it’s serious about theme park development.
Walt Disney Imagineering brought back the legendary Bruce Vaughn, who was one of the key figures in the creation of Pandora – The World of Avatar.
Vaughn now holds the title of Chief Creative Officer at Walt Disney Imagineering.
The Imagineer will lead development for any attractions that Disney builds over the next few years.
Disney had no reason to bring back Vaughn unless it intended to ramp up park expansion. Otherwise, that’s a giant paycheck for no tangible gains.
Reason to Doubt: Imagineering Staffing Issues
I hate to bring up Disney’s recent unpleasant past, but it’s relevant here.
Former Disney CEO Bob Chapek simply didn’t like or respect Imagineers the way you and I do.
With one especially egregious, short-sighted decision, Chapek permanently burned some bridges at Walt Disney Imagineering (WDI).
Chapek announced a forced relocation of WDI from Glendale, California, to Orlando, Florida.
At that moment, the CEO informed Disney’s greatest treasures, its Imagineers, that their jobs were moving to Florida with or without them.
How well would you react to the news that your company was making your job move 2,000 miles? Exactly.
At the time, Imagineers expressed their displeasure in many forums. Chapek’s apathy to their complaints was total.
In one of those “hysterical with the benefit of hindsight” moments, Chapek was too busy currying favor and tax breaks with Florida’s government.
Of course, we all know how that turned out, just like we know how Chapek’s job ended more than a year ago.
In the aftermath of those events, Disney canceled the Lake Nona project.
Immediately afterward, Disney informed Imagineers that their jobs would remain in Glendale…or they could stay in Central Florida if they’d already moved.
That’s the savage part of this story. Many Imagineers resigned/retired from Disney rather than perform a cross-country move.
Additional turnover occurred among the ones that stayed when Bob Iger performed three rounds of layoffs in 2023.
Currently, Imagineering isn’t staffed at the level Disney needs for an ambitious project like this.
Disney needs more time to entice former Imagineers to follow Vaughn’s lead and return.
In other instances, Disney needs time to train newer Imagineers hired during the tumult.
Reason to Believe: Disney Filed the Paperwork
Critics of Disney are quick to claim that Iger made empty promises about park expansion.
I cannot dismiss such criticism, as it wouldn’t be the first time Disney has done this recently.
When the time comes to pull out the checkbook, Disney tends to kick the can down the road.
This time is different, though. When a business performs an 8-K filing like the one you can see here, that’s it. That’s the ballgame.
I’ve got a couple of dear friends who are SEC attorneys for the Justice Department, and you do NOT want to get on the wrong side of these people.
Should Disney not follow through on its stated announcement to spend $60 billion at the parks, it’d face the SEC’s wrath.
So, this expansion is happening. Nobody should doubt that for a second.
In fact, I previously listed the only legal reasons that could prevent it. We’re not quite in “act of God’ territory, but it’s close.
Reason to Doubt: the Florida Feud
I try to avoid political discussions here because I know the math here.
Forty percent of you feel one way, 35 percent feel the other, and the remaining 25 percent couldn’t care less.
Still, we are noticing some oddities in Florida that border on historically unprecedented, except in maybe 2020s Texas.
Florida’s governance has turned so insular and legally questionable that the Orlando Sentinel recently wrote this editorial piece.
That’s a lot of strong arguments that basically boil down to, “OH, COME ON!!!”
Personally, I understand that frustration since covering the Central Florida Tourism Oversight District often feels like I’m a beat writer for the Three Stooges.
No matter how anybody feels about this nonsense, it’s Disney’s reality, though.
The local government has stripped Disney of the power to control its own land.
As a byproduct of that decision, Disney must worry that the government could perform additional actions as punishment in this seemingly neverending conflict.
The equivalent for you is feuding with your HOA. You just can’t win in that scenario unless A) a court rules in your favor or B) you move elsewhere.
Disney isn’t moving elsewhere, so you can understand why its leadership is hesitant to announce firm construction plans in Florida right now.
Who knows how a bitter, humiliated Governor will respond once his attempt to become President of the United States (presumably) fails?
If Florida wins this lawsuit, something unlikely but possible, Disney must ultimately play ball unless Florida residents suddenly get tired of woeful governance and vote differently.
Those are two rather significant x-factors right there that make planning future park expansion particularly problematic.
Reason to Doubt: The CFO Just Arrived
Ordinarily, I would try to balance this article with an equal number of pros and cons. Analytically, I cannot do it this time, though.
Based on what I know, I fully believe that the 8-K filing overrides everything else.
In terms of negatives versus positives, Disney has more reasons to wait rather than proceed immediately, though.
A big one is the recent arrival of Hugh Johnston as Chief Financial Officer.
You don’t need to know much about corporations to understand that the money matters the most.
Planning a $60 billion investment shouldn’t occur overnight. Meanwhile, Disney just reported fiscal 2023 revenue of $88.9 billion.
How long do you think it would take you to figure out the inner workings of a corporation that size?
Thankfully, Johnston isn’t a novice. He worked as PepsiCo’s CFO for more than a decade before joining Disney.
Even so, the CFO will likely need months to catch up on the Disney empire.
Afterward, Johnston can embark on a reasonable spending strategy to improve the parks.
Also, as a reminder, Disney is in a transitional phase.
Iger, and Johnston may want to finish Disney’s transformation into a three-pronged entertainment and experiences company before building out the parks.
For all these reasons, I’m not surprised that Disney just said the promised expansion won’t start in earnest immediately.
What matters is that it definitely is happening, though!
I mean, Josh D’Amaro just came out and said as much.
What he didn’t do — and what Disney refuses to do — is state a precise timeline. That’s the part that is irritating fans.
Thanks for visiting MickeyBlog.com! Want to go to Disney? For a FREE quote on your next Disney vacation, please fill out the form below, and one of the agents from MickeyTravels, a Diamond Level Authorized Disney Vacation Planner, will be in touch soon!
Feature Photo: Disney