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Commercial Awareness 2023/24 Thread
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<blockquote data-quote="justkeepswimming" data-source="post: 149708" data-attributes="member: 25536"><p><strong>Disney Announces $60 Billion Investment in Theme Parks Over the Next Decade</strong></p><p><strong></strong></p><p><strong>News Briefing (from FT)</strong></p><p>After Disney's recent announcement of plans to invest $60 billion in theme parks over the next 10 years, shares fell by 3%. </p><p></p><p>But I think this is a good decision.</p><p></p><p>Pros:</p><p><strong>1) Strong Performance of Theme Parks</strong>: Disney theme parks have been a significant revenue driver, accounting for one-third of the total group revenue last year. With people eager to resume outdoor activities following COVID-19, I expect the revenue generated from theme parks to continue rising.</p><p></p><p><strong>2) Shift in Travel Preferences</strong>: Recent challenges in the airline/airport industry, along with frequent climate-related disasters, have made domestic travel and staycations more appealing. This trend could benefit Disney's theme parks, as a domestic holiday option for those living in countries with Disney parks.</p><p></p><p><strong>3) Financial Boost for Disney+:</strong> Disney+ has been facing financial challenges, with declining ad revenues and a shrinking subscriber base. The investment in theme parks may help Disney maintain profitability. I believe the Parks to be a very strong weapon that competitors like Netflix don’t have</p><p></p><p>Cons:</p><p><strong>1) Financial Concerns</strong>: Disney already has a substantial debt of around $44 billion. While the company claims to have a strong balance sheet, investors are concerned about how this investment will be funded. Rumoured asset sales may help lower leverage ratios, but the financial burden remains a point of concern</p><p></p><p><strong>2) Economic Uncertainty:</strong> Investors are cautious in the current economic climate. While central banks’ monetary policies appear to be working at lowering inflation, there is no indication of a reversal in interest rate hikes. Borrowing costs are rising, and shareholders are eager for dividends, adding pressure on Disney's financial decisions</p><p></p><p>I believe the theme parks are Disney's unique strength that sets it apart from pure streaming platforms like Netflix. If anyone has been to Disneyland you will know it is near-impossible to not spend money. I am keen to see how Netflix will respond, will they perhaps follow suit and build a park of its own? (unlikely, although I have several ideas for them if they want to ask me).</p><p></p><p><strong>Impact on Law firms:</strong></p><p><strong>1) Corporate: </strong>Building more rides and expanding theme parks involves drafting and negotiating contracts, which would require the expertise of corporate law departments</p><p><strong>2) Banking & Finance: </strong>Securing funding for the project would involve banking and finance experts who would assess Disney's current financial position and recommend the best financing options</p><p><strong>3) IP: </strong>Given Disney's extensive portfolio of intellectual property, safeguarding these assets or entering into partnerships would require strong protection of intellectual property rights. </p><p><strong>4) Dispute Resolution/Arbitration: </strong>Managing potential shareholder disputes, should they arise, would necessitate legal expertise in dispute resolution.</p><p><strong>5) Tax:</strong> Structuring the deal to minimise tax implications would also be a critical aspect of the investment strategy. </p><p></p><p>In summary, Disney's ambitious investment in theme parks carries both opportunities and challenges, and it will likely require extensive legal and financial expertise to navigate successfully.</p><p></p><p>Feel free to comment your thoughts! <img src="data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///yH5BAEAAAAALAAAAAABAAEAAAIBRAA7" class="smilie smilie--sprite smilie--sprite1" alt=":)" title="Smile :)" loading="lazy" data-shortname=":)" /></p></blockquote><p></p>
[QUOTE="justkeepswimming, post: 149708, member: 25536"] [B]Disney Announces $60 Billion Investment in Theme Parks Over the Next Decade News Briefing (from FT)[/B] After Disney's recent announcement of plans to invest $60 billion in theme parks over the next 10 years, shares fell by 3%. But I think this is a good decision. Pros: [B]1) Strong Performance of Theme Parks[/B]: Disney theme parks have been a significant revenue driver, accounting for one-third of the total group revenue last year. With people eager to resume outdoor activities following COVID-19, I expect the revenue generated from theme parks to continue rising. [B]2) Shift in Travel Preferences[/B]: Recent challenges in the airline/airport industry, along with frequent climate-related disasters, have made domestic travel and staycations more appealing. This trend could benefit Disney's theme parks, as a domestic holiday option for those living in countries with Disney parks. [B]3) Financial Boost for Disney+:[/B] Disney+ has been facing financial challenges, with declining ad revenues and a shrinking subscriber base. The investment in theme parks may help Disney maintain profitability. I believe the Parks to be a very strong weapon that competitors like Netflix don’t have Cons: [B]1) Financial Concerns[/B]: Disney already has a substantial debt of around $44 billion. While the company claims to have a strong balance sheet, investors are concerned about how this investment will be funded. Rumoured asset sales may help lower leverage ratios, but the financial burden remains a point of concern [B]2) Economic Uncertainty:[/B] Investors are cautious in the current economic climate. While central banks’ monetary policies appear to be working at lowering inflation, there is no indication of a reversal in interest rate hikes. Borrowing costs are rising, and shareholders are eager for dividends, adding pressure on Disney's financial decisions I believe the theme parks are Disney's unique strength that sets it apart from pure streaming platforms like Netflix. If anyone has been to Disneyland you will know it is near-impossible to not spend money. I am keen to see how Netflix will respond, will they perhaps follow suit and build a park of its own? (unlikely, although I have several ideas for them if they want to ask me). [B]Impact on Law firms: 1) Corporate: [/B]Building more rides and expanding theme parks involves drafting and negotiating contracts, which would require the expertise of corporate law departments [B]2) Banking & Finance: [/B]Securing funding for the project would involve banking and finance experts who would assess Disney's current financial position and recommend the best financing options [B]3) IP: [/B]Given Disney's extensive portfolio of intellectual property, safeguarding these assets or entering into partnerships would require strong protection of intellectual property rights. [B]4) Dispute Resolution/Arbitration: [/B]Managing potential shareholder disputes, should they arise, would necessitate legal expertise in dispute resolution. [B]5) Tax:[/B] Structuring the deal to minimise tax implications would also be a critical aspect of the investment strategy. In summary, Disney's ambitious investment in theme parks carries both opportunities and challenges, and it will likely require extensive legal and financial expertise to navigate successfully. Feel free to comment your thoughts! :) [/QUOTE]
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