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THE CHAPEK EFFECT - Disney's HUGE First Quarter 2022 Earnings Results - YouTube
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hey everyone brayden here coming to you
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with a breaking disney news update as
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disney has just released their q1 fiscal
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year 2022 earnings results providing us
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a first look into the financial
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performance of the parks since the
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introduction of the flat fee genie plus
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as well as the pay-per-ride lightning
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lane services here at walt disney world
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as well as out in disneyland today's
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earnings also coincide with a fan and
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media push against the current not so
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popular ceo bob chapeck levying
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criticisms over price hikes and a
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cheapening of the theme park experience
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these are some wild times in the world
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of the walt disney company so let's get
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into it here and see what exactly is
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going on firstly this afternoon disney
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released their first quarter results for
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2022 where the expectations were
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extremely high on the part of
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speculative traders going into it here
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disney stock which has been down
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significantly since november was up a
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good bit today and additionally
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short-term options calls on the stock
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were insane premiums were up as high as
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154
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today that being people betting the
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stock would go up following earnings so
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safe to say there was a lot of hype
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going into these earnings and as it
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turned out the hype was absolutely
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warranted disney beat subscriber
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expectations for disney plus it was
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expected they come in around 8 million
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added subscribers it turned out disney
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gained close to 12 million new
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subscribers this past quarter which of
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course is very bullish disney's basing
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their entire future around disney plus
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and it does seem that there is a good
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amount of interest last quarter things
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were looking a little shaky now here we
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are seeing a lot more people buy disney
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plus which is definitely some good news
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there at the same time over at the parks
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which are just a juggernaut they
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generate amounts of cash that don't even
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make any sense the parks just had their
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best quarter ever in both revenue and
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segment income the parks revenue this
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past quarter just a quarter just three
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months time was 7.2 billion dollars with
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2.6 billion of that being income which
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is just simply insane that is one single
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quarter and then looking at direct to
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consumer with disney plus hulu espn plus
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all that combined the revenues were 4.7
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billion and income was negative in that
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segment where they lost 600 million
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dollars for the quarter as disney
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continues to invest huge sums of money
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into building out content on those
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services i put these numbers like this
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on purpose just to show you how
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important the parks are i wish we'd see
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a lot more of that reinvested in the
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parks because looking at the kind of
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money the parks are making right now
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domestically disney could definitely
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save up a lot of that build a fifth park
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at walt disney world to compete with
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universal who's also working on a new
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park in orlando things like that but
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disney's priorities it seems like it is
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all about disney plus right now so
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beyond the earnings results what i want
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to talk about in this video is what on
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earth is going on with disney what's the
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plan what's bob chap up to here because
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right now the media is reporting on how
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shareholders want to vote him off the
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board of directors now you might look at
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these media reports and you might think
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wow shareholders are going to vote out
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cpec that's like what happened with
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eisner back in the day no it's not when
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the new york post says shareholders they
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don't mean that a ton of people are
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going to show up to a meeting vote
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amount that's not even how it works what
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they mean is there are discontented
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parks fans posting stuff on reddit about
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how they're upset about what disney's
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doing and of course i am a parks fan and
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i totally understand where these guys
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are coming from but the thing is
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redditors in that post they're combined
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let's say hundreds of shares they do not
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influence disney blackrock vanguard
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state street morgan stanley they have
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close to half a billion in shares
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combined they are what influenced disney
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they own disney and i don't mean not to
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say resistance is futile or anything
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like that you guys know i'm not a fan of
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what disney's doing what i mean to say
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is a loud vocal minority of us express
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discontentment with the directions
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things are going with the parks for
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years we've been prophesizing how all
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these short-term decisions being made by
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ceo bob chapeck will culminate in things
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ripping apart at the seams and you know
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what we could end up being right it's
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completely possible but today my faith
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in that was a little shaken because
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disney rolled out this ridiculously
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trying i've equated it to high rate
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robbery this lightning lane paper riding
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it's absolutely outrageous you guys want
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to know we discovered today getting a
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first look at the performance figures
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with the genie service during the
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earnings call get this chapeck disclosed
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that during the holiday period more than
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50
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of guests in the parks purchased genie
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plus lightning lane or both
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more than 50
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and you might be saying oh does he just
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mean christmas this sounds very
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misleading no no they elaborated
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averaging out for the entire quarter the
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slow days the in-between days all of
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that even with those factored in it
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still turns out that more than a third
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of guests on any given day purchased at
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least one of these services
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on top of admission on top of food and
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merchandise which is also ballooning in
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price it is just absolutely outrageous
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and i told you guys previously i heard
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genie was not hitting disney's internal
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projections chapek contradicted that
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directly today he said that they were
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blown away by the response to genie does
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that mean that it actually met their
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expectations i'm still a little suspect
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on that because disney's been tweaking
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the offerings with lightning lane ever
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since it started it's very clear that
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some rides disney thought guests would
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be willing to pay per ride in order to
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skip the line out that ended up not
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being the case but still the fact that
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most guests don't care that this is just
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on its face a terrible new precedent it
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incentivizes disney to make the lines
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that you pay for you pay a hundred
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dollars to get in there make the standby
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lines go slow you're paying for it on
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top of 100 plus admission you're paying
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individually for a faster line it rides
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which often times isn't actually even
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that fast and used to be free this used
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to be the fastpass line not so long ago
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it really just shows that you have this
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schism where you have these parks fans
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that really care about the history of
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this place sort of the ethics what it's
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supposed to be about how things are
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supposed to work and then you have the
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everyday guest that goes in his
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unthinking doesn't care enables jpec
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whatever they want to do and that really
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is just the way that it is and you know
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a lot of people online today have been
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telling me brayden don't be too hard on
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the guests it's extortion lots of people
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are going to end up paying up and i know
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that i prophesied this way back when
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this thing started that people aren't
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going to have a crappy vacation after
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they've already spent so much money to
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get there you know pay for the ticket
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the hotel all that they're going to
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spend this extra little chunk here to
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have what they feel is a good experience
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it totally is the fallacy of sunk costs
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that disney is profiting off of here and
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we are seeing it so as much as a lot of
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parks fans might want to see chapek exit
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i think honestly anyone you put in the
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ceo position is going to continue this
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kind of stuff it's here now it's the way
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the company is and the numbers that
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they're seeing especially with this
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genie service in particular the guest
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adoption reinforces the fact that things
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like this are likely here to stay and
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we're probably going to see more things
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like this in the future it's just going
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to get worse and on another note a
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little bit of a different note this
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quarter it's very fishy we're talking
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about how great this quarter was it's
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totally goofy how disney arrived at
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these amazing results we know disney
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made 2021 a nothing year at the parks
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and likely on purpose they slow played
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everything they loaded the start of the
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new fiscal year which started october
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1st with the new rides the new shows a
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lot of that stuff could have been ready
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earlier but they said oh we're doing it
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for the 50th anniversary we know disney
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doesn't care about the 50th anniversary
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they really didn't do a whole lot for it
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they obviously placed these few new
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attendance draws on that day and around
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that time frame because it's the new
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fiscal year that's when we saw all that
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merchandise come out that the ebayers
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were getting after and that's also when
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we started to see attendance loosen up
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that's when we saw bigger crowds the
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latter part of this last year there were
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not many limitations on the reservation
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system it was very easy to get a
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reservation despite the fact that the
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crowds in the parks were quite
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substantial they also added this new
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revenue stream with genie oh what
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interesting timing for them to introduce
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this just in time for fiscal year 2022.
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i think they timed everything to make
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2021 look bad so that 2022 could look
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absolutely insane that is my personal
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belief the silver lining here is the
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cpec affected that strategy taking a
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look at the stock after hours here it's
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absolutely worked now he has to top this
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genie right now is this new untapped
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revenue stream disney gets to brag about
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for four quarters where they're
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comparing it to last year's quarters
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that didn't have this genie revenue
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stream then come 2023 when jpeg ceo
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contract is up by the way this new
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income stream will now be the
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expectation so they'll somehow have to
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find a way to top it so that means
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they're gonna have to raise prices
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they're gonna have to increase the share
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of guests that are paying for these
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services and while i wanna say good luck
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this is where it's all gonna fall apart
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you know maybe it will but honestly
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that's not how it's gone so far that 50
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number with the genie adoption over the
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holidays is just crazy and i think it's
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indicative of the fact that disney's put
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their foot down on the accelerator and
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they've not reached the point yet where
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they need to start pulling it off disney
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will know when guests are really
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starting to get fed up with stuff and
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right now really just seems to be the
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hardcore parks fans and everyone else is
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absolutely happy swiping those credit
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cards doing whatever they don't care
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they will compromise they will go along
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with a lesser experience at the parks
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which is kind of sad and i do think we
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are going to continue to see things go
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in this direction and it almost becomes
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a self-fulfilling feedback loop right
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where what's going to happen is what
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you're going to see moving forward is
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attendance at the parks international
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guests are going to come back you're
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going to see more and more attendance
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the attendance is going to increase
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throughout this year and even if disney
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doesn't interfere with the standby lines
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you're going to see the standby weights
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go up more guests are going to end up
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paying for the genie so perhaps in 2023
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that seemingly impossible mandate of
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chapex somehow topping this year that'll
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actually be completely possible because
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you're gonna have more guests in the
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parks so you're gonna have a larger
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quantity of people who are going to be
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willing to pay for genie lightning lane
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things like this anything that might
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feasibly speed up the lines and since
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disney will see increased demand they're
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going to be able to raise prices on
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everything they're already doing that
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with food and merchandise we know it's
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inevitable they're going to do that with
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tickets they're going to do that again
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with annual passes i'm sure and i think
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we'll also start to see that happen with
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genie with lightning lane as attendance
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kicks up and disney sees more and more
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demand for these skip the line features
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and then think about this the profits
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from that where are they going disney
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plus where disney makes more and more
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content jpeg keeps mentioning how
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they're influencing the zeitgeist in the
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world they want to have a new title out
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on disney plus every week and then
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disney is going to tie in all those new
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properties they're going to put that
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stuff in the parks more people are going
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to go to the parks attendance is going
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to keep going and going and going so
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even as you have some discontented fans
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like us disney's going to find more and
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more people they're going to find new
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suckers who are going to be perfectly
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willing very excited to go to the parks
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and they are going to slowly discover
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all the things we already have and it's
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just going to be this thing where it
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just keeps going and going and going and
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every year they're gonna be able to say
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hey we've made more money than last year
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so maybe this master plan this thing
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that disney's been betting on maybe it's
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gonna pan out for them we'll just have
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to see it's kind of scary to think about
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it's kind of sad it's the way the world
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at a certain point you just gotta say
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you know what disney's going to do what
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they're going to do and the days of walt
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all that stuff we are far past that we
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are far past the days where you know
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walt went and founded wed enterprises
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you know disney proper the company only
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came in at the last second to fund the
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construction of the park all that
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research all that development work that
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was walt and it was his brother who
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eventually got walt disney productions
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to put money into this project something
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like that i don't think would happen
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today so as much as chapek talks about
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how disney's so focused on innovation
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and things like this i don't know if
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we'll ever see something truly
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innovative come out of a machine like
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this chap refer to the company as a
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synergy machine during the call i mean
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this thing is literally the death star
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the walt disney company is the death
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star so this idea people have that
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you're going to see some new innovative
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incredible thing that we never have
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thought of before it's going to come out
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of this company i just don't think
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that's how that works and it's so funny
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how bob chapeck and these types they
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sort of act like stuff like disney plus
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is so innovative and it's like you guys
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bought the company bam tech who already
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had that technology
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netflix has existed this over-the-top uh
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direct-to-consumer content the streaming
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method it has existed for many many
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years the streaming model you guys are
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getting into it late in the game now
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everybody's getting into it so i guess
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all these companies are so innovative
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coming up with this idea for doing
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streaming services it's all sort of
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ridiculous and now they're talking about
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the metaverse and things like this what
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all this will materialize in we don't
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know yet but really the message i want
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to get across is it's about greed you
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know the sort of altruistic stuff uh
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that walt and a lot of his friends from
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the studios did when it came to the
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parks that sort of created that culture
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around the parks that we really
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appreciate it's been on its way out for
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a long time and i think the fact that
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you have a ceo like cpec now who has
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just totally done away with the public
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relations fan service aspect of the
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company and is really showing you what
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the company is actually about how they
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actually think it's actually kind of
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refreshing i really appreciate the fact
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that jpec is so candid it's really
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opening people's eyes to how the company
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actually is because for so long i would
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talk about some of these things and
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people just wouldn't believe me because
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bob iger the previous ceo he was so so
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good at appealing to the fans saying the
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things that they wanted to hear even if
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behind the scenes it was really all
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going down exactly like this a lot of
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the same discussions a lot of the same
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thought processes i think was just much
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better masked in the era of eiger where
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now cpec is just so frank about how it's
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just about optimizing the business model
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bleeding money out of the consumers just
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taking as much as they can it is highway
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robbery that is absolutely the right
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expression and that is what is going on
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with the walt disney company so quite a
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stellar quarter for disney my
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congratulations to the leadership to ceo
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bob chapeck to cfo christine mccarthy it
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looks like it's all come together here
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quite nicely and i think chances are
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good that will continue to see this
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trend going into the future i am quite
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bullish on the short and medium term of
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the walt disney company even if it's
[805]
something personally from the consumer
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aspect i am just not as much of a fan of
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as we see a lot of the tradition a lot
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of the core elements of the parks be
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eroded here in the pursuit of the dollar
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bill let me know what you guys think
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about everything we talked about here
[818]
the state of the walt disney company my
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analysis everything going on here it is
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quite a crazy time as i said at the top
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for the walt disney company be sure to
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subscribe if you haven't already and
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i'll keep you up to date on everything
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going on here i hope you all are doing
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well live from the mickey mouse magic
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studio this is braden thank you so much
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for watching have a magical day
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[Music]
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you
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