July 29, 2024
Universal's Revenue Dropped, how much of a problem is it?
NBCUniversal Theme Parks division saw a 10.6% drop in revenue in the second quarter, and they’re attributing the drop to post-pandemic equalization; should we be concerned?
NBCUniversal Theme Parks division saw a 10.6% revenue drop in the second quarter, and they’re attributing the drop to post-pandemic equalization; should we be concerned? Also, Universal Studios’ Halloween Horror Nights announced the all-original haunted house, Universal Monsters: Eternal Bloodlines, and Union members at the Disneyland Resort voted to authorize a strike against the resort.
SOURCES
- Comcast sees almost 11% revenue decline in Q2
- Universal announced all-female haunt for both coasts
- Disneyland's cast members vote for strike - so what's next?
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Okay, from our studios in Los Angeles and Tampa, back
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to our home studios. This is Green Tag Theme Park
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and thirty. I'm Philip and I'm joined as always from
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my co host Scott Swinston and Scott Swinson created development
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for another week. We break down what we feel are
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the top theme park stories and kind of discuss bring
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up some important questions around them and discuss why they
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might matter to you. And of course I think we
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talk about earnings a lot because because money is important,
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because money is important, because money is important.
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Job not a hobby, kids.
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Well, you know, hopefully it is.
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Okay, it should be a job, not a hobby.
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Kids. If you're not getting paid, then maybe well maybe
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don't go on strike. We'll get to that. But so
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Comcast earnings came out. It made some splashes because they
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saw an eleven percent revenue decline in Q two and
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never people talk about declines, you know, everybody talks about it.
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Okay, we are talking about Comcasts here, right.
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Yes, So yeah, So Comcast saw a eleven percent revenue
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decline in Q two. It said that its NBCUniversal Theme
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Parks division saw a ten point six drop in revenue
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with the decline being attributed to Orlando's lack of new
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attractions as well as sorry, as well as decreased attendance
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at its parks in California and Florida after the post
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pandemic surge. The company is optimistic about the future with
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the opening of several new attractions, including Epic Universe, Fast
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and the Furious roller Coaster, Universal Hollywood, and Donkey Kong
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Country in Osaka. They've also added a ticket discount to
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potential o sensibly to boost attendance in Orlando. In a statement,
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Comcast president Mike Cavanaugh said, going back to twenty twenty
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two and twenty twenty three, parks were clearly the early
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beneficiaries of substantial rebounds in tourism and travel after the pandemic,
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resulting in a surge in demand that contributed to us
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reaching record results in both those years. More recently, other
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travel options, including cruises and international tourism, given the strength
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of the dollar, have experienced their own surgeon demand, which
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cause visitation rates at our parks to normalize. He also
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talked about investments and blah blah blah. So to me,
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I think for listeners of our show, this is one
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of This is a story that is not a story
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because I think we have talked. We have said almost
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exactly what Mike said for years about the normalization. We
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also have talked about like a year and a half
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ago or whatever, we start talking about how this exactly
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this quarter is when everyone, Iyapa, all these people have
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predicted that is when we're going to see the slow down,
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like right now, this summer period before we go into holidays,
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so before the holiday bump is a slowdown period, and
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here it is. And we've said it's important to have
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new investment for the past year and a half. We
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have said new investment to launch as soon as you
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get the slow down. And I think Universal planned it
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perfectly for the most part. You know where they're really
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pushing horror nights this year, and they're pushing horror nites
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because of this slow down and because they're trying to
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bring in a strong quarter night a song horror night's quarter,
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and then that will lead into twenty twenty five with
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the new openings, and that should boost their twenty twenty
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five numbers. So I think they're right on track, and
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I think he said it perfectly, and I'm sure Wall Street,
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you know, everyone's always going to panic because everyone always panics,
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and not the news. I don't know what's going on,
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but I think otherwise it's it's pretty much according to plan.
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Am I missing something that's got no?
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So what's interesting is there is one other factor which
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I want to talk about in just a second. But
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I think the interesting thing is instead of a slowdown,
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I would like to think of this as a normalization. Yeah,
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because you know, when you have artificially inflated numbers and
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then you go back to where you should have been
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during those artificially inflated number periods, you kind of go, oh,
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wait a minute, I mean, think of it. Think of
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it like think of it like an ocean when the
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when the waves are coming in, they pull out, and
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after the waves hit then it ebbs back out, It
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ebbs and flows. So you can't compare the peak of
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the wave to the troth, you know, you can't. You
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can't say that, oh, we've had such loss. No, you
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have to find that normalization. And I think, as you've said, Philip,
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we are incredibly intelligent and we agree with so many
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other well okay, have gathered our information from so many
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other really credible sources that this is going to be
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the time where normalization happens, where we're not going to
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have you know, you're going to have that huge rush
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when everybody can go back post COVID, and then that's
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going to take some time and people and I know
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there are listeners out there who are going to say, Scott,
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COVID was forever ago. It's not. It's still here. But
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that's a whole other sort. But the the COVID shutdown
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was forever ago. But in the grand scheme of things,
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it's not forever ago. It's we're still seeing that. It
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was such a massive change that we're still seeing normalization
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from it, and it's happening right about now. The other
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factor that I wanted to throw in for Universal, especially
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here in Florida, is you have to take into consideration
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those people who are saying, you know what, we're not
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going to go to Florida to visit Universal this year
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because next year Epic Universe will be open. So there
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is that that sort of hesitation for tourism that happens
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whenever there's a huge announcement for a new a new
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park or an attraction. And the way Epic is, you know,
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handling the new the new park. The way Universal is
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handling the new park is their way, as we've discussed
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in previous shows, their way to adjust that that huge
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rush and that huge sense of disappointment guests will have
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if they try to get there and can't get a ticket.
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They're trying to mitigate that upfront. And I will say
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I was just at CityWalk this past week and for
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the first time got to see the model of the
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park and h and got to talk with some of
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my friends who are working in various capacities in the
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opening of said park. And it was really funny because
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maybe at the model going and there's a back road,
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there's a service road here, and there's a point out
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at a point here where that goes out there, and
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but you know, it's it's clear that they're doing Universe
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is doing everything they can to let people know that
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epic is coming, which is a double edged sort. It's
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great to have that that buzz prior to but it
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also will slow down your visitation while guests are waiting
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for the new thing to open. So I think that's
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a factor as well. And I think that's going to
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be a big factor simply because this is going to
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be Epic Universe is going to be such a gigantic park.
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It's going to be a major it's going to be
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a game changer in Orlando, and it may actually and
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will well, we'll put a pin in this for the moment,
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but we'll probably come back to it in the future.
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It may actually finally tip the tip the scales away
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from Disney for Orlando and into the world of Universal.
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But that's that's a topic for another show. But you know,
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I agree with you, Philip, it's kind of a non
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story simply because this is the trend that everybody's been
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saying was going to happen. I mean, all the industry
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experts were saying is going to happen, that we were
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going to hit this normalization phase where everybody would feel like,
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oh my gosh, what happened to everything? And you're right,
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new things need to come. I think Universal has done
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it right. I hope that Epic opens on time. I
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know that there have been some some challenges, and I'm
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not this is not insider information. These have been posted.
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There have been some challenges in getting everything completed for
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its projected opening day, But yeah, I think it's all
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just part of the game. I think it's all just
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part of the business and I think everything's going to
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be fine.
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Well the I agree with all that, and I especially
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the double edged sword thing, which I'm sure we will
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come back to, because it will be a h that
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would be something like to be determined how much of
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a double edged sword it is and what the expectation
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and managing all that. That's But it, like you said,
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it is, it's essential, just like everyone has said, and
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even in this statement, it's essential for them to hype
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up Epic to get people to plan for it so
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they can, you know, adjust after normalizing. But it is.
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But how much of a doublish short it is we
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will not know until they get closer to opening.
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But I but I think that's part of the reason
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that they that they've they've made it so that EPIC
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is only available as a multi park ticket. Yeah, of course,
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so they don't lose their so they don't lose their
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attendance at the other parks.
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Yep it's being it's it's helping to for now to
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tamper that or temper that edge, and then they can
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always add in the tickets if the numbers are not
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where they need to be. But yeah, no, it's a
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good strategy. I honestly, I am, like, you know, there's
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something wrong here. The takeaway I would, I would say
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for our listeners right now, for you guys, especially anyone
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at smaller attractions. I want to get Scott's take on
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this too. But to me, the takeaway is like, you're
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going to have people in your team, your leadership team
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probably are gonna have people that are going to see
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some of these normalizing numbers and start panicking. And I
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think it could be your job to bring up what
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we are saying and to kind of, you know, point
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to what this quote is from Universal, kind of point
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to the strategy and be like, this is normal. Everything
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is going to cording to plan and stop freaking out.
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We planned for that. Hopefully you plan for this. Hopefully
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you budget corrected and put some of that money, and
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now you're budget correcting for this year and you're expectation
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correcting and you have something new for next year. Hopefully
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you've you've all done all that and you can explain
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that to the team, because I know even at Gantum
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people are panicking, you know, and they're the people that
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don't pay attention to the wider industry. They're the people
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that watch the numbers and watch the sales and watch
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this and that, and they're panicking, right, And even the
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mainstream media people are panicking. I mean, like you know,
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whenever people read the headlines, they start panicking. And I
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think it can be our It can be helpful for
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us to go in and say, there's no need to panic.
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This is going all according to plan, and we will
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have something ready for next year after things normalize and
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we need to adjust our budgets.
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Well, mainstream media, they just things so people panic. I mean,
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that's we forget, you know, we often forget that mainstream
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media their job is not to report. Their job is
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to get viewers. You know, they're trying to They're trying
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to do the same thing that the parks are trying
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to do. So take mainstream media with a grain of salt.
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Number one. Number two, you're absolutely right, Philip. I agree
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with you one hundred percent, and that is that, you know,
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the biggest takeaway is to try to assuage those people
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who are thinking very short term, who are thinking, oh
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my gosh, we're not meeting our numbers from this month
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last year. Keep reminding them when you play the long game.
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You don't look year to year. You look, you know,
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decade to decade. Things kind of even out and and
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you know, we said it, We've said it forever. The
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pandemic was something that has unprecedentedly thrown a wrench in
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the way we do things, and it's going to take
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a long, long time to completely get away from that.
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I think, you know, we'll we'll just see what happens
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as we're coming you know, as we are in an
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election year. I think we're coming to a point where
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we're going to see if there's some political changes that
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are going to impact us. I think we're going to see,
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who knows, there could be another there could be not
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good that there isn't, but there could be another pandemic
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on the on the horizon. So just we just have
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to look at it. We have to play the long game.
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But the long game does not just mean plan for
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far out in the future. It's also make sure that
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you're making your recommendations based far enough back in the
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past so that you recognize, yeah, we're we're evening out here.
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You know, it's it's.
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Okay, Yeah, it's okay, it's okay, it's okay on this
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vein it. I think the next story ties exactly into it,
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and I want to just I'll explain the story first
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and then I'll explain the tie in. So Universal announce an
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all female haunt for both coasts. This is our most
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recent Halloween Hornit's Haunted House announcement, which is called Universal
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Monsters Eternal Bloodlines, and it's headed by an all female
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ensemble of classic Universal monsters that Brider Frankensteindrag close daughter
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she Wolf of London and a Mamma Fied Egyptian princess.
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And the story goes, it'll introduce guests to an all new,
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terrifying storyline as they find themselves in the center of
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the ultimate battle between two unexpected alliances of classic female
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Universal monsters. Fans will encounter I can't say these names.
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