Many Wall Street analysts have been using Disney vacation sales as a key indicator for the current economic recession. The thinking behind it is, if Americans can afford a nice family vacation to Disney Land or Disney World, the economy must not be so bad after all.
Forget about all the inflation fears and sell offs occurring in the markets. If a couple of privileged kids get the chance to punch a life-size Mickey in the nuts, we’re all in good shape.
Of course, the Disney brand has other sources of revenue besides amusement parks, including movie (Enchanted, No Country For Old Men) and television (ABC, ESPN) brands. According to a report in today’s New York Times:
ABC Studios, which produces shows like Ã¢â‚¬Å“GreyÃ¢â‚¬â„¢s Anatomy,Ã¢â‚¬Â fueled the rise in profit because it recorded lower production costs.
I think we all know where those lower production costs came from – the writer’s strike. And that’s obviously not a good thing. Just because the studio ‘saved tons of money‘ airing reruns, doesn’t mean it helped their business grow at all.
By that logic, failing to negotiate a multi-billion-dollar merger deal was good for the company because it saved money on all the paper it would have had to buy to sign the contracts. That’s being ‘eco-friendly’ too.
Disney World itself seems to be hitting some recession problems as well. Recent statistics show that 40% of the animatronic dolls in the ‘It’s A Small World‘ ride, will be seeing disastrous foreclosures on their tiny properties. The ‘Thailand doll’ is also looking very malnourished due to unforeseen rice cost increases.
New York Times: No Signs of a Slowdown in Traffic at Disney’s Parks, May 7, 2008