Originally Posted By Sport Goofy << NBC Universal was thinking about getting rid of the parks, but now see that they bring in a good, steady cash flow >> Do you understand what cash flow is? Your statement above does not describe the financial condition of Universal Orlando at all. In 2006, Universal Orlando had a profit of approximately $42M. They pay some amount of taxes on that profit. Now, they've entered an agreement to spend something in the neighborhood of $500M on Harry Potterland. If they use their cash flow -- which is what is left after paying taxes and such from the profits, they run out of money pretty quick and have to come up with $470M or so from somewhere else. Thais situation is called being cash flow negative. Of course, you can borrow the money and not use cash flow which decrements your future earnings since you have to pay back principal and interest on the money you borrowed -- another way to reduce cash flow. The cash flow situation at Univeral parks is precisely the reason why GE would like to unload the business. The only reason they haven't done it yet is because they haven't found a buyer willing to pay a suitable price.
Originally Posted By Darkbeer I was saying that the ENTIRE NBC Universal division has good Cash Flow, not just the Orlando Theme Parks. GE/NBC Universal has made the decision to buy the Harry Potter rights. Why did they do that? Because they think it can return the investment in bring in guests to the park, and maybe to prevent other companies from getting the rights. (aka they settle for a smaller profit to prevent another company from getting the "golden egg"), happens all the time in business, giving up short term profits to make long term gains.....
Originally Posted By 2001DLFan <<Hans Reinhardt: "DCA is a failure, in that it fell short in achieving that for which it was intended." And what, exactly, was intended? I don't know and neither do you, so kindly stop guessing and insisting that your claims are factual.>> Well, in a business sense, I would imagine that they intended the park to be profitable and a “successâ€. While I may not have any proof that the Disney’s management actually stated that, or that the executive’s comments prior to opening would lead one to believe such a thing, it just feels wrong that they would expect anything else.
Originally Posted By jonvn Since we don't know what is meant by success, that really has no usable value. We also don't know if it is profitable, but from some who are usually right, they say it is.
Originally Posted By Kar2oonMan >>But SeaWorld (aka Busch Entertainment) is doing great.<< But they did sell off Sea World Ohio in 2001.
Originally Posted By Darkbeer ^As I understand it, SeaWorld of Ohio has serious issues, including spending a LOT of money to send the animals from Ohio to San Diego every winter to make sure the animals didn't die due to the freezing temperatures in the Cleveland area. When Anheuser-Busch bought the parks from HBJ, they made a business decision, get rid of the park that was losing money, or close to it...
Originally Posted By jonvn "Do you understand what cash flow is?" The idea that Disneyland has not been self-sustaining for a few years is kind of interesting. That does explain a lot. Such as the marked reduction in AP prices to get people in the door, that is basically getting you in for free after 2 visits. Then once you are in the door, raising food and souvenir prices through the roof to get your bucks. And cutting costs in various areas to make up further shortfalls. People can't figure out that when Castmember Matt came in, he CUT a bunch of in park entertainment. You get so much to work with and that's what you have. What you get is based on what you generate. But it's hard to believe the place is not self-sustaining, or was not prior to DCA being built.
