WEBVTT
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By Okay from our studios in Los Angeles and Tampa.
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This is green Tag Theme Park and thirty. I'm Philip
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from Gantam Lighting Controls, and I'm joined as always by
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my co host Scott Swinson of scott sonon Great Development.
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On Green Tag, we look at the top news each
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week and we try and pick the stories we think
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are most important for theme park professionals and explain why
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we think they're important. To ask some questions, try to
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get to some answers. This week we're looking at earnings
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from both Six Flags and Disney. Hopefully we will get there.
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But yeah, well, and actually before we even start that,
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we probably should talk a little bit about last week's show,
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because some of our listeners did exactly what we ask
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you to do, and that is to double check us
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and make sure that you know we're staying honest, and
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if you have any additional information that we may have
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missed or misinterpreted, to go ahead and share. Last week,
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we did talk about the Six Flags closing, which even
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when we read it, even when we were presenting it
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in the show, was a little sketchy. But I will
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say that we basically took the same trend as most
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major networks right from as far as news outlets go,
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and uh so, we we apologize for missing the fact
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that the park did not actually close early and that
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the fight took place in the parking lot, but that
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still doesn't take away any of the talking points that
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we brought up during the show, which is theme parks
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are not as safe as they were when we were kids.
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And there were some people who commented, you know, back
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in my day, we didn't need this, and I'm glad
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you're you feel that way, because that's kind of what
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we said in the show. But I think it's I
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think it's important to recognize that even though we did
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make a mistake and we completely admit it, there was
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not an actual there was not an actual early closing,
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but it actually took place at closing time in the
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parking lot. And it is still trying to be determined
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as to whether the people who were in the parking
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lot causing the fights as part of a team takeover
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were actually people who were attending the park who actually
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went to the park that day. All of this said,
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we apologize for missing the one that that in detail,
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but I also think that we stand by all of
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the things that we said in regards to what these
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kinds of this kind of violence in or near a
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theme park could negatively potentially impact and create, you know,
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And the other question I had was, you know, one
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of the biggest things we talked about was the chaperone policy,
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and that if the chaperone policy, you know, if it did,
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if it did only take place outside in the parking lot,
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then a chaperone policy is not necessary exactly. But if
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they feel as though some of those people were in
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the park and coming out to start a rumble, is
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it called a rumble anymore? Damn? I mold anyway, So
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then clearly they feel that the chaperones could help that
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as well. So the context may have been misrepresented, and
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we apologize for that. However, the content we still stand
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by and feel as though it was valued, valuable discussion
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to have on a show like this one. Another comment
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that we got is that I am far too close
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to my camera. Well, I just tell you the shot.
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I'm back pretty far now, and this is a horrible shot.
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This is a horri This is way too much headroom.
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So you know, I guess it's just a matter of taste,
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and I agree with you. I don't think anybody wants
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to be this close to this face. I totally get that.
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I never watch us, really, I just you know, you
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let it play in the background, you go do other things.
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I don't know you listen to us either, So you
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know I know what we said. I don't So anyway,
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if I get too close, I apologize, And yes I
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have nose hairs. Okay, I'm an old guy. But AnyWho,
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the idea is that I will, I will do I will.
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We'll try to meet it, find a happy medium so
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that you're not completely repulsed by my giant close up
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of my face.
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Okay, I'm not repulsed. It's fine. Okay, shall we to
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the earnings?
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Then let's go on, let's talk about all right, that's
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that's unnecessary.
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But okay, that was a jump scare.
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Okay, that was a pleasant even for me.
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All right, So.
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Six Flags earnings were very good. I think you know
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everybody was pleased with them.
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Are we back on six Flags again? What the hell? Philip?
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I know, well, are there other parks?
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Well, after this show?
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I want to after this show, I want to put
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a moratorium on six Flags for at least like three weeks.
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We will get to Disney. Okay, let's get through this
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pretty quickly. So attendance and revenue were up for the
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first three months of twenty twenty six at six flags
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of seen parks, six flags welcome two point nine million guests,
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up four percent from the same period one year ago.
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Revenues were up increased twelve percent, helped by six percent
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increase in perk hat spending. Underscore that we'll come back
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to that. Operating costs also fell, but that's a little
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bit of a more complicated puzzle because it's they did
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reduce headcount from corporate staffing, but it's also because a
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lot of maintenance, because they got rid of a bunch
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of parks, right, so they're losing like staff from those
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parts they're getting.
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You know, maintenance is going down from some of that.
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But they didn't. I don't want to just brush over
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the fact that they did reduce headcount corporately, because you know,
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you and I both know people that are that were
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released let go, and to all of them, of course,
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I say congratulations, because it's the best thing that's going
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to ever happen to you in your career. But the
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other side of it is, I know it's scary and
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it's it is one of those things that is is
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we don't mean to make light of it, but it does.
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It does help the numbers, and.
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It does see the numbers right and the consolidation they're doing.
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So overall, it was a good earnings call at least
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shows that Riley is making an effort to rein in
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some of the expenses and costs. However, I'm going to
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point out so there's a lot of interesting stuff here
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that didn't really get covered by main people, mainly for
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US park people.
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That's interesting.
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But the tildr here really, in my opinion, is that
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they're in a really good position to combat the current
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macro uncertainty and they almost I'm not going to say
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they stumbled into it by accident, but it's sort of
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something where what they've found is that people are founding
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a light of a lot of value in their regional
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season passes. And if you think about what we talked
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about before with the concept of people needing to trade
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down depending on their budgets for summer, so in that regard,
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say and he actually there's a quote we can read
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about this, but he uses the one here in SoCal
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and the one in Texas has good examples of where
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people are now using the regional passes and they're taking
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a day trip to a park that's you know, within
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driving distance ish for them. So that way they're getting
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multivistation under the same pass. And if you think about that,
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it kind of dovetails exactly like if you think of
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people that want to take a vacation with the trading
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down and now they could you know, quote unquote trade
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down to taking a day trip to another Six Legs
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park because they already get in because they have a
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regional or if the cost is just upgrading for a regional,
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that's a pretty good value proposition. And so on top
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of that, this was not mentioned in the call, so
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I'm adding this for you all as contexts. But on
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top of this, six Flags has made a lot of
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announcements leading up to the earnings call for bringing back
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live entertainment, like so many announcements, and it's an incredible
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amount of live entertainment they're bringing back. And of course
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they just opened the Phantom Theater over Santim Theater, right,
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I think it's Phantom Theater opening Nightmare, I don't know.
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So they opened that family friendly ride. But then they
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also announced a lot of so they announced Christmas Slate
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returning for several of their parks, Holiday in the Park
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coming back for a few. They also announced The dead
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Man's Show that it's anyway, They're announcing it's live entertainment
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for Halloween, this returning even that was being cut last year.
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They also announced summer activations at a few parks. In particular,
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I wrote a piece for Attractions magazine about the summer
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stuff at King's Dominion, and it is all day and
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it's literally part of the strategy that they talked about
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where they want to provide all day entertainment that transitions.
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So during the day you have parades, and you have
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little performances, and you have shows. And they took their
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circ outdoor stage show and they're putting it inside of
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a theater and remounting it as a full theatrical production.
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So they're upgrading live entertainment at a lot of properties.
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And so that's the context that this comes into, right,
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and then they're saying, oh, looks like these regional passes
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are doing really well. When you can see how this
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fits together where it's encouraging people to upgrade to the
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past and it's making people want to keep the past
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because there's entertainment, there's new things to do, and I
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feel like this is just back to what we have
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been shouting at for years about six Flags, which is
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make it local, make it personal, make it back in
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live entertainment, and then do this regional past encourage people.
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So I actually think they fell into a really good
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position right now because the regional passes is something that
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nobody else can offer, and so it's truly a moat.
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And if then you're able to put the park presidents
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back and make each park individual and make each park
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doing something interesting, then you can actually really widen that moat.
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I don't know that's a tail. D Are we have
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another thing?
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If you're going to do if you're going to do
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a regional if you're gonna do a regional pass and
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you make all your parks the same, there's no point that.
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There's no point so I can I can spend more
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money to drive somewhere else to get the exact same
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product I can get in my own home park. What's
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really interesting is, you know, for me, because of my
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my what was my home park growing up with six
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Flags Great America? Now it was Marriott's Great America when
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I was there, and then it was Paramounts Great America,
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and then it was Bally's Great America, and now it's
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six Flags Great America. But what they're doing is they're
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going back and kind of thumbing through the rolodex of
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previous owners, and from an entertainment stand point, they're actually
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bringing back parades and shows from the early seasons in
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the celebration of the fiftieth anniversary. That's right, So I
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think that is really cool. Also, over the summer they
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are have it because because my husband is a former
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entertainer there, he's a former performer at six Leags Great America,
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they've invited all of the previous entertainers to come back
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over the summer over the fifty years that they've been
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open to do a big event for them as well.
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Now I don't know whether that's a public event. I
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think it's mostly a private event. But still the fact
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that they are recognizing the fifty years in this particular
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park of the entertainers, I think that bodes very well
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for bringing back or putting a focus back on live
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entertainment and not just and not just thrill rights.
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I agree and I think the point is that you
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can see that at kind of every property, especially the
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ones who they're bringing back park presidents that really know
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to what you're saying, Like that's again, and we talked
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about this on the the multiple weeks ago, so I
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don't want to rehash it, but that's a big reason
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that we've talked about.
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Part President's help is.
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That they know things like that, and they can from
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a leadership standpoint, they can say, yes, send those invitations
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out to those performers, Yes, that's a great idea, like yes,
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let's let's do more to celebrate the history of this
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individual property right. They can make those decisions, and clearly
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Riley is supportive of that, and I the other things
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to note, just a few other random things when we
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move on. He did talk about quite a lot how
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they're going to rethink their marketing spend, and.
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That one was hard for me.
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They did do a lot of restructuring, so they've replaced
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some marketing people, they've replaced some other people.
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He kind of hinted.
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My take on this is that they hinted on their
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spend not being as effective because it doesn't utilize new channels.
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So I interpreted that to mean they're going to do
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more TikTok like that was that was like my take
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on it.
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I don't know if that's accurate.
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I don't know whatever, but that was my take is
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that like less billboards and more TikTok was my take,
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But maybe maybe not.
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He did and a few other things, I mean, and
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literally everything he said.
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I was like, yes, yes, yes, because he even said
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he gave everyone a heads up. It's like, hey, we're
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going to be spending more on maintenance's next quarters. You're
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going to see maintenance rise up. And the reason is
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because we want to improve our downtime on rides. We
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want to make sure the rides are functioning properly. I'm like, yes,
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that's all that what we want to hear. And even more,
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he snuck this in which a lot of the outlets
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didn't cover, but I cover it just because I was
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comparing numbers. So he actually they raised the capex envelope
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by twenty five million, So in the previous quarter, he
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said the top the higher end of the capex was
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going to be four hundred and fifty million. Capex is
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how much they're going to spend this year, like reinvest
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into their into the parks. So he raised it up
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to four one hundred and fifty million, so twenty five
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million higher. So could that partially be expenses whatever?
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Yes.
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He also said they were looking at going park by
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park to really think about the opening days and they're
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gonna likely reduce some of them for Q two, but
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expand in Q three and four, which just happens to
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be Christmas in Halloween and if you combine that, right,
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and if you combine that with the CAPEX spend, which
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some of that will go there. But basically it's like
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he's committing to spend a little bit more on improving
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the services and they're gonna try and use some of
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the funds more in a more focused way for you know,
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for like marketing and things like that. So I think
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that's all good. He they mentioned the regional passes over
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three times, like I had a little ticker going, and
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they just kept coming back.
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To that the drinking game.
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Yeah, Yes, our Bingo card for this year now has
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regional passes in addition to weather challenges.
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Yeah, I know, I think the I think the other
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thing that if I'm going to read between the law
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when he's talking about we're going to invest in in
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a lot of the upkeep of the parks and and
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the that's where the extra capex money is going to go, right,
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I mean, because it's it's really hard to say we're
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gonna all the new stuff is going to be We're
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going to make sure our rides don't break down. Well,
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that's hard to market. So you got to you gotta
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go in and go, here's what our capex is going
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to be. And then when you recognize, after going park
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to park that when you recognize, you know, our parks
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still aren't as clean as they should be. They're they're
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not as the maintenance is not as strong on the
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attractions as it should be, then you've got to realize, Okay,
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we've already committed x amount of capital spend to improving
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the park as far as adding new fun stuff, but
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this is equally as important. So let's go ahead and
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raise that ceiling just a little bit so that we're
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not taking anything away and nobody can complain and say,
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you know, oh yeah, well you know, we're buying more
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brooms and we don't get a roller coaster in our park.
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But it's it's it's a very smart way to do it.
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And I love the fact that he that he keeps
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going back to we're gonna go park by park and
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look at how each park operates, because when you have
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when you have a the idea of McDonald's doesn't work
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as well as it used to with theme parks. It
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used to be with McDonald's. Part of the reason that
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they were successful is because you knew exactly what you're
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going to get no matter where you were. But with
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a theme park, there are different needs and different desires
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in different with different demographics and different audiences, so you
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cannot paint them all with one brush. You've got to
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make sure that you maintain some local flare and and
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focus at the very least, focus on what the local
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crowds are, you know, either complaining about or praising, and
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make sure that that park continues to do the things
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they're praising and gets rid of the stuff that they're
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complaining about. And that may be different in each and
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every park. So yeah, it's the right mindset.
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It's the right mindset.
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And I think that was evidenced by the King's Dominion
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piece because they talked about how John Riley went there
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to work with the park president to do a feedback
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session from some of their best fans and from their
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passholders and whatnot, and they use that feedback session to
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directly shape the summer programming, which includes some returning stuff
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that was popular, but also some historic things like the
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clown patrol and things like that, and they're adding on
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some new elements. And I think that's a good approach
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where his job is to help with the leadership, so
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he can deploy if he needs to, to help an
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individual park president figure it out or whatever align on
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their vision. But it kind of has to start with
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feedback and generating that feedback into actions.
339
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So I it's all positive, I think.
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And because the corporate and because the corporate office is
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looking at reinforcing the individuality of the parks, there's also
342
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a great way to share best practices with different with
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slightly different outcomes or to solve slightly different problem because
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you've got such a broad spectrum of parks and types
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of parks that are working within your system.
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The only so on consumer sentiment. That's the one thing
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we didn't touch on. They basically just dodged the consumer
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sentiment question. Of course, everybody now everyone's always asked about
349
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consumer sentiment and how is this forward leaning demand and
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all of that, And he basically just said, we're focused
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on what we can control the levers in the business,
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and for us, we're not really able at this point
353
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to attribute performance trends to those kinds of external factors.
354
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So our focus is execution, focusing on what we can change,
355
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what we can do, and we've got our heads in
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the business, and of course we'll monitor external forces and
357
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we'll be agile, and we have other levers in the
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business that we can go after if we need to.
359
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So, you know, you say that that's kind of brushing
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it off to me, that's really addressing the issue. That
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is directly addressing the issue. It's not saying what people
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want to hear. What people want to hear is, you know,
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we will coddle to all of the demands of our guests.
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But what he's saying is we will do the things
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that are in our control. Because if you've been in
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the industry, even for five to ten years, you recognize
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that no matter what you do, there's going to be
368
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people who aren't happy with it. So you have to
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continue to keep your nose to the grindstone, stay true
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to what you set out to do. I mean this is,
371
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you know, every time, every time Disney the few times
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that Disney's had failures, it's because they got off track
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from what their core product was. The alien encounter came up,
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came across my feed not too long ago, and I
375
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loved it, but it was so off brand that, you know,
376
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so you got to go back. You can't control you
377
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can't control guest sentiment. You cannot. What you can control
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is how well are we doing what we set out
379
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to do? And that is much more of a long
380
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term success plan than a short term success plan. Running
381
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around chasing to put out little fires that of guests
382
00:19:05.599 --> 00:19:09.119
flaming up on social media is a short term plan.
383
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A long term plan is to continue to build an
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infrastructure that will allow you to deliver top quality product
385
00:19:16.400 --> 00:19:18.799
so that there's nothing for people to complain about. Now,
386
00:19:18.799 --> 00:19:21.680
they'll still find things to complain about, but the things
387
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that the things that are outside of your control, you know,
388
00:19:25.319 --> 00:19:28.240
there's no use wasting time and money to try to
389
00:19:28.279 --> 00:19:30.599
fix those. You might as well stick to your core
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product and do the product well. Don't misunderstand me. I'm
391
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not saying don't listen to them, be aware of them,
392
00:19:36.680 --> 00:19:39.319
be aware of what they're saying, but put it through
393
00:19:39.319 --> 00:19:43.359
that filter of is this something we can control? Is
394
00:19:43.400 --> 00:19:46.799
this something that you know, like we talked about last
395
00:19:46.799 --> 00:19:50.240
week and I mentioned again this morning, safety and parking lots.
396
00:19:50.960 --> 00:19:54.799
You know, one of our listeners said theme parks are
397
00:19:54.799 --> 00:19:57.240
not going to be able to stop team takeover team takeovers,
398
00:19:57.279 --> 00:20:00.480
and they're absolutely right. But what they CA can do
399
00:20:00.759 --> 00:20:03.160
is they can elevate security in their parking lots. They
400
00:20:03.200 --> 00:20:04.880
can make it more difficult for people to get into
401
00:20:04.920 --> 00:20:07.200
the parking lot who aren't parked there to go see
402
00:20:07.240 --> 00:20:09.599
the to go and experience the park. You know, those
403
00:20:09.599 --> 00:20:12.279
are the things they can control. But can they address
404
00:20:12.799 --> 00:20:16.839
the concerns that people have because some teen is some
405
00:20:16.920 --> 00:20:18.839
group of teens is going to organize something that takes
406
00:20:18.839 --> 00:20:21.039
place in their parking lot. They have no control over that.
407
00:20:21.319 --> 00:20:25.920
So it's it's focusing on what they can control as
408
00:20:26.039 --> 00:20:29.720
an organization and how they can continue to focus and
409
00:20:30.400 --> 00:20:33.640
improve their business by looking at it from a by
410
00:20:33.640 --> 00:20:35.119
looking at it as a business.
411
00:20:38.279 --> 00:20:40.160
Well, I have nothing to add, so let's move on,
412
00:20:40.920 --> 00:20:44.279
all right? That was more than another Yes, yeah, we
413
00:20:44.279 --> 00:20:45.720
got to move on. But I think that that's a
414
00:20:45.920 --> 00:20:49.680
that's a great framing for leaders. And I do see
415
00:20:49.880 --> 00:20:52.680
your point about that, and it's something I often tell
416
00:20:52.680 --> 00:20:54.920
my team is similar things, so we can only control
417
00:20:54.960 --> 00:20:57.799
we can control.
418
00:20:57.920 --> 00:21:01.799
And anyway at Disney.
419
00:21:02.000 --> 00:21:05.680
Meanwhile, at Disney, yes, this one's a more complicated to me,
420
00:21:06.119 --> 00:21:08.039
and I feel like I have I don't know if
421
00:21:08.079 --> 00:21:08.880
I really want to go.
422
00:21:08.960 --> 00:21:09.880
I have something knows of me.
423
00:21:09.839 --> 00:21:10.920
I like, I don't think we really need to go
424
00:21:10.960 --> 00:21:14.039
throw this, but maybe just get to what I thought
425
00:21:14.039 --> 00:21:16.759
was the most interesting part and then if people want
426
00:21:16.759 --> 00:21:19.319
to so anyway, it was a good range call.
427
00:21:19.440 --> 00:21:20.759
They beat on the top and the bottom.
428
00:21:20.799 --> 00:21:25.559
Revenue was up seven percent adjusted EBITDA was huge. The
429
00:21:25.599 --> 00:21:29.720
stock popped seven percent on the day. That's all great.
430
00:21:29.880 --> 00:21:31.920
I'm sure all of us have already heard that the
431
00:21:32.000 --> 00:21:34.640
thing was most interesting to me, and I have a
432
00:21:34.680 --> 00:21:39.519
little I have like a I don't once I have
433
00:21:39.559 --> 00:21:42.119
pop this, but I just have an interesting, weird theory
434
00:21:42.119 --> 00:21:44.880
about this. But what was interesting to me most is
435
00:21:44.880 --> 00:21:47.000
that he kept coming back to the idea of Disney
436
00:21:47.039 --> 00:21:49.559
Plus like over and over and over. He kept coming
437
00:21:49.599 --> 00:21:51.839
back to it, and he kind of described it as
438
00:21:51.880 --> 00:21:54.680
being the center of the fan experience. He literally even
439
00:21:54.680 --> 00:21:57.440
described it as a hub and spoke model, which is
440
00:21:57.480 --> 00:22:02.759
like sound familiar, right, but like, yes, he literally described it. Yes,
441
00:22:03.079 --> 00:22:04.799
that's what I was thinking when he was saying it.
442
00:22:04.839 --> 00:22:08.359
He literally was like a hub and spoke, except that
443
00:22:08.480 --> 00:22:10.799
Disney Plus is at the center, you know, and then
444
00:22:10.839 --> 00:22:13.440
you have like the spokes are like you know, sports
445
00:22:13.480 --> 00:22:15.799
and ESPN and you know it kind of that's uff,
446
00:22:15.799 --> 00:22:18.960
but Disney Plus is at the center, and that it
447
00:22:18.960 --> 00:22:23.240
becomes the hub for the interactive fan experience. You know.
448
00:22:23.279 --> 00:22:26.119
That is like all the Disney fans would would use
449
00:22:26.279 --> 00:22:28.359
Disney Plus as like the hub like an inner, you
450
00:22:28.359 --> 00:22:32.039
know whatever. And I'm like, that is really interesting to me.
451
00:22:33.000 --> 00:22:36.960
It seems like a big reframing of what it had
452
00:22:37.000 --> 00:22:39.799
been before or I don't know, it's just a really
453
00:22:39.799 --> 00:22:44.839
interesting and he said quote this is from tomorrow. He said,
454
00:22:45.480 --> 00:22:47.519
all the opportunities that we have to drive value of
455
00:22:47.559 --> 00:22:50.119
this company, reducing turn, Disney Plus might be the single
456
00:22:50.440 --> 00:22:53.519
most significant opportunity that we have. And so it's probably
457
00:22:53.519 --> 00:22:56.680
not surprising on pushing the entire organization to prioritize that goal.
458
00:22:57.599 --> 00:22:59.839
What I mean when when I heard that, when he
459
00:22:59.880 --> 00:23:02.319
was like, Disney Plus is our best opportunity, I kind
460
00:23:02.319 --> 00:23:06.839
of was a what moment for me. Anyway we can
461
00:23:06.839 --> 00:23:09.000
get into he said, A lot of stuff, a lot
462
00:23:09.000 --> 00:23:11.400
of They talked about short form content deputing that on
463
00:23:11.400 --> 00:23:15.119
Disney Plus. They talked about their new strategy pillars. So
464
00:23:15.160 --> 00:23:19.640
they have three new strategy pillars, invest in iping creativity,
465
00:23:20.279 --> 00:23:23.519
reaching more consumers in more seamless engaging ways around the world,
466
00:23:23.799 --> 00:23:26.359
and using advanced technologies to power storytelling.
467
00:23:26.680 --> 00:23:29.759
Okay, well those are their three pillars that If those
468
00:23:29.799 --> 00:23:32.799
are their three new pillars, then yes, Disney Plus does
469
00:23:33.400 --> 00:23:36.799
get some additional traction. I think you also have to
470
00:23:36.799 --> 00:23:41.039
recognize that. And here's so here's here's my theory, just
471
00:23:41.039 --> 00:23:46.160
based on what you've explained here, Disney Plus is not
472
00:23:46.319 --> 00:23:50.920
completely but more passive income than the parks are. Yeah,
473
00:23:51.039 --> 00:23:53.160
you basically put it out there, and whether you have
474
00:23:53.960 --> 00:23:58.799
one viewer or a gazillion viewers, you you have the
475
00:23:58.799 --> 00:24:03.799
same infrastructure, you have the same investment basically, and so
476
00:24:04.119 --> 00:24:08.839
by making Disney Plus more popular, they can take a
477
00:24:09.640 --> 00:24:14.079
flatline investment in essence and you know, make it so
478
00:24:14.160 --> 00:24:16.400
that it generates far more revenue. Now, you have to
479
00:24:16.400 --> 00:24:18.200
invest in the marketing of that obviously, and you have
480
00:24:18.240 --> 00:24:20.960
to continue to buy product and make certain that you
481
00:24:20.960 --> 00:24:23.759
have the right eyps, but one of the pillars is
482
00:24:23.839 --> 00:24:28.359
investment in new ips. So look you there, right. I
483
00:24:28.680 --> 00:24:30.240
do think this is a little bit of a flip
484
00:24:30.240 --> 00:24:33.000
flop from where they were going, because they were saying
485
00:24:33.039 --> 00:24:37.440
that the parks where the epicenter and the core. But
486
00:24:38.839 --> 00:24:42.359
it's I can certainly see why when they look at
487
00:24:42.400 --> 00:24:44.200
the money and they go, we have to work how
488
00:24:44.319 --> 00:24:46.440
hard to make X amount of dollars in the park,
489
00:24:46.480 --> 00:24:47.960
and we have to work how hard to make X
490
00:24:48.000 --> 00:24:50.480
amount of dollars on Disney. Plus we just have to
491
00:24:50.480 --> 00:24:51.519
get more people tuning in.
492
00:24:52.000 --> 00:24:52.599
I think.
493
00:24:56.079 --> 00:24:58.880
I don't disagree with that read so we're in more
494
00:24:58.960 --> 00:25:00.519
like my crazy hypothe his land.
495
00:25:00.559 --> 00:25:02.119
Now. I don't disagree with what you're saying.
496
00:25:02.880 --> 00:25:07.359
I have a crazy alternative hypothesis, which is that if
497
00:25:07.400 --> 00:25:09.920
you look at I pulled up some numbers and basically,
498
00:25:10.000 --> 00:25:12.759
if we're looking at a ten year kind of average,
499
00:25:13.039 --> 00:25:16.160
Disney is roughly flat to modestly down over the last decade,
500
00:25:16.160 --> 00:25:19.559
like the rolling decade, right, so it's kind of underperformed
501
00:25:19.559 --> 00:25:23.359
the S and P five hundred and and this is
502
00:25:23.400 --> 00:25:26.720
Disney as a full company, right, just right. And also
503
00:25:26.839 --> 00:25:29.480
so that's point one. Point two is that they kept
504
00:25:29.640 --> 00:25:31.720
this was the first earnings call. They changed the format.
505
00:25:31.960 --> 00:25:35.960
So now he like releases a big letter that's kind
506
00:25:35.960 --> 00:25:37.680
of like this is what I'm thinking in all this
507
00:25:37.759 --> 00:25:40.279
kind of like a big essay tomorrow does and then
508
00:25:40.400 --> 00:25:42.000
they kind of do an earning call which is mostly
509
00:25:42.039 --> 00:25:45.200
Q and A, but they're basically trying to talk about
510
00:25:45.240 --> 00:25:47.920
the company as a whole instead of like each individual segment.
511
00:25:48.480 --> 00:25:50.519
So he's making a shift more to like talking about51200:25:50.519 --> 00:25:54.079
the whole. That's point B and then point C is51300:25:54.200 --> 00:25:56.759
just some numbers here for you guys. For contexts AI51400:25:56.880 --> 00:25:59.680
related socks have produced seventy six percent of the S51500:25:59.759 --> 00:26:02.480
and P five hundred's returns since jat chiep D launched51600:26:02.519 --> 00:26:05.400
in twenty twenty two, So seventy six percent of their51700:26:05.440 --> 00:26:08.200
returns are from AI basically a seven percent of earning51800:26:08.200 --> 00:26:10.200
growth and ninety percent of capital spenditure growth.51900:26:10.640 --> 00:26:11.000
And so.52000:26:12.799 --> 00:26:16.480
I think he's reframing this as a way to make52100:26:16.519 --> 00:26:19.960
it seem like they have a bigger AI plan than52200:26:19.960 --> 00:26:23.920
they do. We've heard for a lot of like Elon52300:26:24.039 --> 00:26:26.240
and everybody, everybody has been chasing this idea for a52400:26:26.279 --> 00:26:29.000
long time about like the one app, like the master app,52500:26:29.720 --> 00:26:33.359
and of course, now a lot of companies are AI52600:26:33.519 --> 00:26:35.960
washing where they're just kind of like, we're using AI52700:26:36.079 --> 00:26:38.359
and efficiencies because I feel like it's become a thing52800:26:38.359 --> 00:26:41.880
where if you don't mention AI, it's actually a liability52900:26:42.119 --> 00:26:43.880
because it's driving all.53000:26:43.759 --> 00:26:44.440
The returns right now.53100:26:44.480 --> 00:26:46.559
It's like propping up our entire economy, and so it's53200:26:46.599 --> 00:26:48.200
like if you don't mention it, that might be allowed.53300:26:48.359 --> 00:26:49.839
So I kind of feel like part of this is53400:26:49.880 --> 00:26:51.720
maybe they're reframing it as a.53500:26:51.640 --> 00:26:52.200
Way to.53600:26:54.039 --> 00:26:57.119
Give a nod to that, like, look, we also can53700:26:57.200 --> 00:26:59.720
use technology and AI, and we're going to be able53800:26:59.759 --> 00:27:02.440
to insert efficiencies, you know. And he did have a53900:27:02.440 --> 00:27:05.039
whole AI section actually at a whole A section where54000:27:05.039 --> 00:27:07.160
he talked about how they're using AI and all this54100:27:07.200 --> 00:27:09.279
stuff and how they're still keeping humans at the center,54200:27:09.319 --> 00:27:11.799
but they're using it for labor deployment and for better54300:27:11.839 --> 00:27:13.119
ad targeting and all this stuff.54400:27:13.160 --> 00:27:14.799
That's really logical. It makes a lot of sense.54500:27:14.839 --> 00:27:17.359
But I sort of feel like the re orientation is54600:27:17.400 --> 00:27:20.559
more trying to sell a vision of like a master app,54700:27:20.960 --> 00:27:25.079
like if Disney Plus, because right now, Disney Plus, in54800:27:25.119 --> 00:27:28.279
my mind, is not that competitive if you compare it54900:27:28.319 --> 00:27:31.200
to Netflix, but what if it wasn't Netflix. What if55000:27:31.200 --> 00:27:35.480
Disney Plus was instead an app that was like one55100:27:35.519 --> 00:27:39.240
app to rule them all, that controlled a person's whole55200:27:39.359 --> 00:27:43.160
experience in the parks and also streaming, and was also55300:27:43.240 --> 00:27:45.640
TikTok and was also all this nonsense. Well then it's55400:27:45.680 --> 00:27:48.759
worth a lot more. So I sort of feel like55500:27:48.799 --> 00:27:51.839
that maybe is going on. It's a that's my crazy.55600:27:53.079 --> 00:27:55.400
Conspiracy theory. So what do you say?55700:27:55.559 --> 00:27:57.400
Was that crazy? Though? I mean, it's it's one of55800:27:57.440 --> 00:28:04.319
those things that technologically could happen. The biggest risk something55900:28:04.359 --> 00:28:13.759
like this happened has is will people abandon TikTok to56000:28:13.799 --> 00:28:17.160
move to the one app, the Disney one app, or56100:28:17.599 --> 00:28:19.119
is there a way for the Disney one app to56200:28:19.119 --> 00:28:22.759
integrate with TikTok, you know, at which again creates a56300:28:22.759 --> 00:28:28.000
whole other layer of challenges and problems and usually legal issues.56400:28:29.119 --> 00:28:32.640
So I know, I think I think that's a very interesting, well,56500:28:32.640 --> 00:28:35.200
I think, very interesting take. And whether the thing is.56600:28:35.799 --> 00:28:37.440
A point on it, I think that because they didn't56700:28:37.480 --> 00:28:40.480
he did mention that the short form content. Basically, what56800:28:40.480 --> 00:28:43.880
they're trying to do is build in short form content56900:28:43.960 --> 00:28:47.000
into the Disney Plus app. So I think there I57000:28:47.000 --> 00:28:50.359
think their take would be, they want to instead of57100:28:50.400 --> 00:28:52.960
you posting stuff or I don't know how the user generated,57200:28:52.960 --> 00:28:53.480
instead of you.57300:28:53.440 --> 00:28:57.759
Posting stuff on TikTok, you post stuff on Disney Plus. Yes, yeah, right,57400:28:57.799 --> 00:29:00.000
And my point is, I'm not sure how many peop57500:29:00.000 --> 00:29:00.960
we're going to embrace.57600:29:00.759 --> 00:29:02.559
That ran again exactly.57700:29:02.559 --> 00:29:05.640
We don't we turn, we turn, you know. We we57800:29:05.960 --> 00:29:09.519
like to think that we accept new things quickly, but57900:29:09.759 --> 00:29:12.319
the things we accept quickly we also abandoned quickly. The58000:29:12.359 --> 00:29:15.880
things that we become comfortable with and have become part58100:29:15.960 --> 00:29:18.160
of our lives. We don't let go of that easy.58200:29:18.799 --> 00:29:24.039
There's already AI pushback in certain in certain areas. So58300:29:25.359 --> 00:29:27.240
you know, I'm not saying that AI is going anywhere.58400:29:27.240 --> 00:29:30.599
It's not. I I think that to your point, Philip,58500:29:30.640 --> 00:29:33.000
I think this, it's it is very very possible that58600:29:33.039 --> 00:29:36.200
he is, because it is such a you know, business58700:29:36.200 --> 00:29:39.640
buzzword right now or business buzz concept, that he is58800:29:40.440 --> 00:29:43.480
coming to the forefront and saying, hey, we do AI too,58900:29:43.799 --> 00:29:47.119
That is very possible as well. Yeah, that is very59000:29:47.119 --> 00:29:54.039
possible as well. I I think yeah, I think honestly,59100:29:55.519 --> 00:29:58.000
what we're saying here is not necessarily in disagreement. I59200:29:58.000 --> 00:30:00.599
think we're probably looking at different phases of potentially the59300:30:00.599 --> 00:30:04.000
same plan. But the first thing you got to do59400:30:04.079 --> 00:30:05.640
is if you are going to get that one app,59500:30:05.839 --> 00:30:10.119
you've got to get everybody to abandon what they're comfortable59600:30:10.160 --> 00:30:16.599
with and retraining your retraining your audience or retraining your participants,59700:30:17.559 --> 00:30:21.000
your creators is I think a much bigger problem than59800:30:21.039 --> 00:30:23.079
just creating a platform for it, Because a platform for it,59900:30:23.200 --> 00:30:25.839
they could do that right now. You know, it's funny60000:30:25.880 --> 00:30:27.960
that we're talking about AI. I think what we're probably60100:30:28.000 --> 00:30:29.880
going to do is because we're out of time for60200:30:29.920 --> 00:30:33.480
this show. But as we move into as we move60300:30:33.480 --> 00:30:37.240
into our unhinged show, thanks to all of our Patreon folk,60400:30:39.039 --> 00:30:40.960
well we're gonna we're gonna dive a little bit deeper60500:30:40.960 --> 00:30:43.720
into AI. But for this show, we're out of time.60600:30:44.119 --> 00:30:47.680
So on behalf of Philip Bernandez with UH with Gantam60700:30:47.759 --> 00:30:51.480
Lighting and Controls and Scott Swinson with Scott Swinzon Creative Development.60800:30:51.480 --> 00:30:53.279
This is Green Tag Theme Park and thirty and guess60900:30:53.279 --> 00:30:54.559
what we'll see you next week
