The BLOGFlume—The Almighty Dollar
Earnings reports from Disney and Cedar Fair, and a crazy labor story from the UK.
Written by Russell Meyer
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In an early release today, the Walt Disney Company reported net profit for the 1st quarter of 2005 rose an astonishing 30% from last year. Total revenues for the company reached $7.83 billion, an 8.9% increase, primarily boosted by the DVD release of Pixar’s The Incredibles. The movie, which is the biggest selling DVD release of 2005, has sold about 23 million copies since it hit store shelves on March 15, 2005. However, the film division was also boosted by the impressive performance of Vin Diesel’s The Pacifier, which grossed over $100 million. The movie grossed more than 2004 big budget releases The Alamo and Home on the Range combined, which partially explains the segment’s stellar profits over last year. One of the segments that did not increase from 2004 was Disney television. ABC Family, ESPN, and Disney’s other cable TV interests fell slightly with a loss of 1% in profit, which was explained by a revenue deferral from ESPN. However, ABC made a giant leap by increasing operational profit by 93%. Revenue at the theme parks also increased with a revenue surge of 26% totaling $2.1 billion, with this performance preceding all of the hoopla surrounding Disneyland’s 50th Anniversary. I guess I should have bought some Disney stock at the end of last year, because the sky’s the limit for the company as revenues are almost assured to soar over the summer months. With some major movie releases coming later in the fall, Disney could return to being one of the hottest stocks to own. Robert Iger could not have taken over at a better time, but will be expected to maintain Disney prosperity over the long term. So far there have not been any signs that he will not be able to accomplish Disney’s goals.
Cedar Fair Earnings In
Cedar Fair LLC announced its earnings for the first quarter of 2005. Like Six Flags, Cedar Fair’s first quarter results are somewhat insignificant because most of the company’s parks are not yet operating. However, the first quarter did demonstrate the effect of Castaway Bay. Cedar Fair’s newest park, an indoor water park in Sandusky, Ohio, contributed nearly $25 million of revenue, and offset a net loss of $2 million from the company’s only other operational property, Knott’s Berry Farm. Knott’s loss of nearly 100,000 guest visits was attributed to weather in Southern California, a common “excuse” for Cedar Fair. One would think that the opening of a very well reviewed, and seemingly popular roller coaster- Silver Bullet- would increase guest visits, and in turn, revenue. However, the opposite has seemingly occurred. Could the weather really cause the loss of 100,000 guests over three months, or are other parks in Southern California drawing people away from Knott’s? If Disney, Universal, and Six Flags are drawing guests away from Knott’s Berry Farm, than Cedar Fair could be in some serious trouble over the rest of 2005, as the Disney parks will be getting a surge of guests, and Universal Studios Hollywood is still performing strong. Knott’s does not have any new attractions on the horizon, unless work is going on in the defunct Kingdom of the Dinosaurs space to launch a new attraction before the end of the year. The other Cedar Fair parks could also be in trouble as Cedar Point and Geauga Lake are having trouble competing with Paramount’s Kings Island. Also, despite the addition of Hydra, Dorney Park may not see a surge in visits because of the massive additions going on a few hours away at Six Flags Great Adventure. A few years ago, Cedar Fair was poised to become one of the most successful regional theme park companies in the country, but faster than Top Thrill Dragster gets up and down its 420-foot tower, Cedar Fair the company has seen it’s promise fall below that of Six Flags.
Labor Laws Gone Too Far?
While this story isn’t exactly related to theme parks, I caught word about it on the radio this afternoon, and just had to read it for myself. Blackpool Resort, a popular holiday destination for Europeans and home to Blackpool Pleasure Beach, has been forced by the town council to limit its famous donkeys to a 48-hour work week. Earlier in the day, the British Parliament declared that English workers could not exceed 48 hours of work in one week, and the Blackpool council felt it necessary to apply the new labor law to donkeys. That’s right, donkeys are being extended the same rights as British citizens. The donkeys are very popular as tens of thousands of children are given rides throughout the year at 2 pounds per ride. The donkeys will continue to give rides from 10 am to 7 pm with a one-hour lunch break, and Fridays off. Before we know it though, the donkeys will want 15-minute smoke-breaks and accrued vacation days. Let’s be nice to the animals, but when they are covered under labor laws, it might be taking things a bit too far.
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