Originally Posted By Dr Hans Reinhardt "In the grand scheme of things ... why does it matter?" You of all people are asking this Dean? Crapshoot, I'm baffled as to why you keep posting these old excerpts when no one is contending that the place didn't do as well as planned.
Originally Posted By danyoung I'm having the same problem. The old posts don't address the questions at hand - like did DCA really lose as much money as some think? It had 6 million visitors in its first year. Yeah, it missed its target by a mil, but 6 mil is still a buttload of people, all spending on food and souvenirs. I'm thinking they probably did OK.
Originally Posted By crapshoot <<Crapshoot, I'm baffled as to why you keep posting these old excerpts when no one is contending that the place didn't do as well as planned.>> Measuring Investment Returns___II. Investment Interactions, Options and Remorse… NYU Example: Disney California Adventure Disney opened the Disney’s California Adventure (DCA) Park in 2001, at a cost of $1.5 billion, with a mix of roller coaster rides and movie nostalgia. Disney expected about 60% of its visitors to Disneyland to come across to DCA and generate about $ 100 million in annual after-cash flows for the firm. By 2008, DCA had not performed up to expectations. Of the 15 million people who came to Disneyland in 2007, only 6 million visited California Adventure, and the cash flow averaged out to only $ 50 million between 2001 and 2007. In early 2008, Disney faced three choices: 1. Shut down California Adventure and try to recover whatever it can of its initial investment. It is estimated that the firm recover about $ 500 million of its investment. 2. Continue with the status quo, recognizing that future cash flows will be closer to the actual values ($ 50 million) than the original projections. 3. Invest about $ 600 million to expand and modify the par, with the intent of increasing the number of attractions for families with children, is expected to increase the percentage of Disneyland visitors who come to DCA from 40% to 60% and increase the annual after tax cash flow by 60% (from $ 50 million to $ 80 million) at the park. DCA: Evaluating the alternatives… 1. Continuing Operation: Assuming the current after-tax cash flow of $50 million will continue in perpetuity, growing at the inflation rate of 2% and discounting back at the theme park cost of capital of 6.62% yields a value for continuing with the status quo.Value of DCA =1.103 Billion 2. Abandonment: Abandoning this investment currently would allow Disney to recover only $ 500 million of its original investment. Abandonment value of DCA = $ 500 million 3. Expansion: The up-front cost of $ 600 million will lead to more visitors in the park and an increase in the existing cash flows from $ 50 to $ 80 million. Value of CF from expansion = = $1.103 billion <a href="http://people.stern.nyu.edu/adamodar/pdfiles/acf3E/presentations/invretB.pdf" target="_blank">http://people.stern.nyu.edu/ad...retB.pdf</a> Try not to dwell on the lowball number for the expansion plan.
Originally Posted By oc_dean Okay Hans ..let me start again from the top.... >>What I'm getting at is that I continue to have my doubts that the original DCA performed as poorly financially as some people here insist.<< What changes ... if the park was not a financial failure?
Originally Posted By danyoung >Disney opened the Disney’s California Adventure (DCA) Park in 2001, at a cost of $1.5 billion...< This is simply not true. The entire project cost 1.5 bil, but that included all of Downtown Disney as well as the Grand Californian Hotel, which is a pretty spectacular hotel.
Originally Posted By Dr Hans Reinhardt >>What I'm getting at is that I continue to have my doubts that the original DCA performed as poorly financially as some people here insist.<< "What changes ... if the park was not a financial failure?" Sorry, but I don't get your question. I think I articulated my viewpoint on the subject very well in post 238, so I really don't have anything else to add other than to say that those who keep arguing that the place has been losing money since 2001 are probably wrong.
Originally Posted By oc_dean In the end Hans ..... what matters to me .. is what you and I have been in agrement with all along. And that is DCA 1.0 was lackluster, low quality, and needed serious improvements to be worthy of the "Disney" name. To me .. this argument insisting it was never in financial dire straights is, to try to prove what???? What matters .. is the co. realized it's mistake .... and are going through incredible "hoops" to make the park interesting, and become a profit.
Originally Posted By Dr Hans Reinhardt See, and I couldn't care less about that Dean because it's a well known fact that the place didn't meet expectations. What is unknown is whether or not Disney deemed the place a failure (based on the business definition) and why. "What matters .. is the co. realized it's mistake .... and are going through incredible "hoops" to make the park interesting, and become a profit." Did they? Seems to me that the same or similar plan to start with modest (by their previous standards) is pretty much their standard the new model for building Disney theme parks now.
Originally Posted By dshyates Disney will never release the financials of DCA 1.0 but all indicators point to it NOT being successful. As far as numbers goes though, we do know that Mondavi lost over $12 million in their 6 month DCA experiment before they bailed on the project.
Originally Posted By danyoung >In the end Hans ..... what matters to me .. is what you and I have been in agrement with all along. And that is DCA 1.0 was lackluster, low quality, and needed serious improvements to be worthy of the "Disney" name.< I completely agree with this.
Originally Posted By DlandDug >>Side note: was Boardwalk Betsy's considered to be the same location as Maliburitos? They had separate signs and queues, but the only time I was there while they were open, they were only serving from one side but had all the menu items.<< Well, I'll be happy to answer THIS one, anyway. They were two completely separate venues, with different menus. Ritas closed "temporarily" rather early on, and never reopened. Betsy's stayed open for quite a while, until the entire complex was consumed in the TSMM construction. Betsy's menu ("Strips, Dips, and Chips") was originally carried over to the Farmer's Market, a location that disappeared in the Cars Land construction.
Originally Posted By DlandDug As far as whether the Company was losing money or not, this is not the only parameter for measuring success or failure. Fantasmic! is a good example. Though it may cost more than other outdoor entertainments, it is considered a solid hit with the public. If it hadn't resonated, you can bet it would have been quietly shuttered in favor of something else. That was the case with Light Magic, which was pulled after one very expensive season. DCA was the perfect storm of failure-- both losing money AND proving quite unpopular with the public. Before the Usual Suspects start jumping down my throat again, I will readily agree that mere mortals such as you and I do not have ready access to the dollar figures. But there's pretty consistent information out there to indicate that there was red ink to spare in DCA's initial years (and for some time after). That the place was not... appreciated... by the general public seems to be one area (at least) in which there is general agreement. So it is no surprise that the place, which is not quite as easy to replace as a parade, would instead be subject to very large scale change.
Originally Posted By Dabob2 <I believe that is the motivation of the subtle name change.> No, it's a company-wide thing. "Disney Tangled," instead of "Disney's Tangled, for instance, lame as that sounds.
Originally Posted By DlandDug >>No, it's a company-wide thing.<< Yup. It's another way for the geniuses of Marketing to justify their existence...
Originally Posted By TP2000 crapshoot, I've really enjoyed all these old links and media reports you've been providing here. They are fascinating, and a fun jog down memory lane. Thank you! Maliburitos and Strips, Dips N' Chips. Gawd, that corner of Paradise Pier was some of the worst DCA 1.0 had to offer. So cheap, so ugly, so charmless, so poorly designed. There are strip malls in the suburbs that had better looking aesthetics and a more welcoming environment. Would you pay 70 bucks to visit this?... <a href="http://www.yesterland.com/images-caladventure/pop_piersign2001ah.jpg" target="_blank">http://www.yesterland.com/imag...01ah.jpg</a> Yeah, no sane person would. But like Mr. Eisner said, it was the rain in the winter of '01 that caused DCA to flounder in the marketplace. It wasn't the actual theme park at all. It was that rainy weather we had in February and March of 2001.
Originally Posted By crapshoot <<It wasn't the actual theme park at all. It was that rainy weather we had in February and March of 2001.>> Damn that El Nino weather pattern anyway. I took a day off of work yesterday. We went to the DLR at 9:30am. Queue lines at the turnstiles for DL were almost to DCA's entrance. We decided to start in DCA. The park was open up to the Bay Area. When the ropes dropped everyone headed either to Screamin' or Midway Madness. I imagine the rest were at Soarin'. Point was that even by 11:00, DCA was still lightly attended. We went over to DL and wow what a difference in guest density.
Originally Posted By Yookeroo "DCA was the perfect storm of failure-- both losing money AND proving quite unpopular with the public." I suspect these two things might be related.
Originally Posted By crapshoot <<Yup. It's another way for the geniuses of Marketing to justify their existence...>> I asked my CFO if he thought it would be an accounting issue or a marketing dealio. He saw no advantage to the name change from an accounting standpoint.
Originally Posted By Dabob2 But everything's just "Disney" now, without the apostrophe-s. "Disney Tangled," "Disney John Carter," and on and on. It's not unique to DCA.
Originally Posted By alphabetmom IMHO, Disneyland will always be more popular, just because it is the original. It has nothing to do with DCA.
