[Chat] Could Star Wars Purchase help Ease Prices?

[RforFilm]

As much as I love Disney, I have been overwhelmed by a lot of the prices hikes at the parks. I understand that the quality service has to come out of someones pocket. Though something has come to my mind recently.

Now that Disney has purchased Lucasfilm, their incoming profit is gonna skyrocket. Besides owning THX and Industrial Light and Magic, the Star Wars franchise is really gonna bring in more from Disney (not to mention the merchandising cow that Star Wars already is). Assuming that the economics with the company don't change, Disney could possibly net in an additional $1 Billion.

Do you think there's a chance that the new merger can help with the price hikes? I'm hoping that this will help slow down the price increases that have been hitting us hard.

[Slappypunk]

Re: Could Star Wars Purchase help Ease Prices?

I see where you're going with this. I hope it does help ease prices. But then again everything in this world is centered around greed so I doubt it will help. "The rich gets richer while the poor get poorer". inch:

[4th Gen Disney Fan]

Re: Could Star Wars Purchase help Ease Prices?

I have a feeling that this will actually have the opposite effect. Disney paid over $4 Billion for LucasFilm. They will have to make that money up somehow.

If the rumors hold true of additional attractions based on Star Wars, this will increase demand for tickets. We all know that the parks are pretty much at maximum capacity every day. The only lever that Disney has pulled so far to offset all the visitors is price increases. I think this trend will continue.

I would not be surprised to see single day/single park tickets pushing $125 within the next 2 years.

[Usul831]

Re: Could Star Wars Purchase help Ease Prices?

As a publicly traded corporation, it is mandatory by law that Disney seeks to maximize their profits. They won't lower profits in one area of the company just because they sky-rocket in a different sector.

Indeed this acquisition and the new park expansions that will follow both Marvel and Lucasfilm will most likely raise gate prices even higher.

The only thing that will lower prices or at least stall an increase is if attendance drops due to the park being too expensive. It seems, even though many people are being priced out of the park, there is still room to increase the price further and still meet attendance goals.

[StevenW]

Re: Could Star Wars Purchase help Ease Prices?

That $4 Billion does nothing for the parks. Disney is already benefitting from the transaction with more revenue from the merchandising.

There are 2 reasons to increase prices. (1) If Disney decides to create Star Wars rides, they will attract more guests. The increased demand mean they will have to increase prices to moderate the demand. (2) They will also increase prices to pay for the Star Wars addition.

[Mr Wiggins]

Re: Could Star Wars Purchase help Ease Prices?

Do you think there's a chance that the new merger can help with the price hikes? I'm hoping that this will help slow down the price increases that have been hitting us hard.

Price hikes won't stop no matter how much Disney's profits increase. As long as there is high demand for their theme park product, Disney will continue to raise prices and cut spending to maximize profits.

[Poisonedapples]

Re: Could Star Wars Purchase help Ease Prices?

so i cam going to say NO to your question... i do not think that it will help prices..

[wiigirl]

Re: Could Star Wars Purchase help Ease Prices?

Price hikes won't stop no matter how much Disney's profits increase. As long as there is high demand for their theme park product, Disney will continue to raise prices and cut spending to maximize profits.

This...unfortunetly. :shy:

[calsig31]

Re: Could Star Wars Purchase help Ease Prices?

As a publicly traded corporation, it is mandatory by law that Disney seeks to maximize their profits.

Not necessarily true. There are a number of factors in play. I think you are referring to the fiduciary duty of those controlling the corporation to make reasonable decisions with the money invested by the sharehloders. There are quite a few factors that would determine what "reasonable" is, and profits are only one of them.

[BC_DisneyGeek]

Re: Could Star Wars Purchase help Ease Prices?

Prices are determined by supply and demand. Profits from the aquisition are irrelevant.

[Wally]

Re: Could Star Wars Purchase help Ease Prices?

Right. In the same way Supreme Chancellor Palpatine vowed to give up his emergency powers once the the Clone Wars crisis was over.

[Sambo]

Re: Could Star Wars Purchase help Ease Prices?

Not any chance of that ever happening.

Name one time Disney prices were reduced for other than an event promotion.

[flynnibus]

Re: Could Star Wars Purchase help Ease Prices?

As much as I love Disney, I have been overwhelmed by a lot of the prices hikes at the parks. I understand that the quality service has to come out of someones pocket. Though something has come to my mind recently.

Now that Disney has purchased Lucasfilm, their incoming profit is gonna skyrocket. Besides owning THX and Industrial Light and Magic, the Star Wars franchise is really gonna bring in more from Disney (not to mention the merchandising cow that Star Wars already is). Assuming that the economics with the company don't change, Disney could possibly net in an additional $1 Billion.

Do you think there's a chance that the new merger can help with the price hikes? I'm hoping that this will help slow down the price increases that have been hitting us hard.

You are assuming Lucasfilm made that much money before.. and it didn't. Estimates are anywhere from about $200mil to as high as $800 mil. The higher end is more inline with normal revenue to cost ratios in buyouts. 3-4 times revenue is a common ball park price.

Second, the films or consumer products division doing well... isn't really going to affect the profit/loss pressures in the completely different parks&resort division.

Basically... this should have nothing to do with prices at DL. The only saving grace would be licensing costs paid to Lucasfilm for existing attractions.. but even those will continue to exist to a degree depending on the amount of independence Lucasfilm will be ran as.

---------- Post added 11-06-2012 at 06:19 PM ----------

As a publicly traded corporation, it is mandatory by law that Disney seeks to maximize their profits. They won't lower profits in one area of the company just because they sky-rocket in a different sector.

Untrue - their requirement is to act in the interest of the shareholders. That doesn't always mean 'maximize profits'. Maximizing profits so you go out of business in 10months would not be seen as sound fiduciary duty. Such blanket claims confuse the situation and are not sound.

[Jayce]

Re: Could Star Wars Purchase help Ease Prices?

Right. In the same way Supreme Chancellor Palpatine vowed to give up his emergency powers once the the Clone Wars crisis was over.

Exactly

Welcome to capitalism.

[biggsworth]

Re: Could Star Wars Purchase help Ease Prices?

I would say no. The only thing that will effect the prices is if we stop spending.

[Giant Panda]

Re: Could Star Wars Purchase help Ease Prices?

Untrue - their requirement is to act in the interest of the shareholders. That doesn't always mean 'maximize profits'. Maximizing profits so you go out of business in 10months would not be seen as sound fiduciary duty. Such blanket claims confuse the situation and are not sound.

How can "maximizing profits" cause a company to go out of business? Even if it were possible, the act of going out of business would minimize profits, wouldn't it? Yes I am arguing semantics ....

in any event, the LucasFilm aquisition will not have anything to do with ticket prices.

[flynnibus]

Re: Could Star Wars Purchase help Ease Prices?

How can "maximizing profits" cause a company to go out of business? Even if it were possible, the act of going out of business would minimize profits, wouldn't it? Yes I am arguing semantics .....

Simple... Destroy your market. Alternately another example... Sell out too cheap. Selling your assets for less than they would perform over a period of time. Example 3, operate in a way very cheap so margins are high, but in an unresponsible way that were to create great liability. imagine cutting corners in a way that could lead to a massive lawsuit or public flop that would kill your market presence. Common thread... Maximizing profits 'now' in a way that actually hurts the company long term. Even tho that may maximize profits, it is not sound fiduciary duty.

[Giant Panda]

Re: Could Star Wars Purchase help Ease Prices?

Simple... Destroy your market. Alternately another example... Sell out too cheap. Selling your assets for less than they would perform over a period of time. Example 3, operate in a way very cheap so margins are high, but in an unresponsible way that were to create great liability. imagine cutting corners in a way that could lead to a massive lawsuit or public flop that would kill your market presence. Common thread... Maximizing profits 'now' in a way that actually hurts the company long term. Even tho that may maximize profits, it is not sound fiduciary duty.

Why are you assuming that the alleged mandate to maximize profits has a temporal quality? Deliberately running an otherwise healthy company into the ground obviously results in an ultimate minimization of profits. Or are you postulating in your examples that the company leaders are acting in ignorance? It would seem to me that the willfullness of the act would serve to define the actions as malfeasance or innocent incompetence.

[JohnZ46]

Re: Could Star Wars Purchase help Ease Prices?

If the words "We're making too much money! Cut Prices!" come out of Bob Iger's mouth, it probably means he's having a stroke.

[BradleyC]

Re: Could Star Wars Purchase help Ease Prices?

As much as I love Disney, I have been overwhelmed by a lot of the prices hikes at the parks. I understand that the quality service has to come out of someones pocket. Though something has come to my mind recently.

Now that Disney has purchased Lucasfilm, their incoming profit is gonna skyrocket. Besides owning THX and Industrial Light and Magic, the Star Wars franchise is really gonna bring in more from Disney (not to mention the merchandising cow that Star Wars already is). Assuming that the economics with the company don't change, Disney could possibly net in an additional $1 Billion.

Do you think there's a chance that the new merger can help with the price hikes? I'm hoping that this will help slow down the price increases that have been hitting us hard.

Just so you know, THX has not been part of Lucas Films since 2001, so it was not included in the purchase.

Additionally, I don't think it will help relieve ticket prices as the ticket price increase was really a way to pay for cars land and future expansion. Im pretty sure Star Wars will pay for itself from merchandising and movies, Disney will be more interested in recovering that large chunk of change first before they think of reducing ticket prices unfortunatly.