Disney News Mitchellany

In lieu of other national news, there are a couple of Disney news items that caught my attention and that I wanted to share.

First, Disney revealed its corporate media structure plans for post-20th Century Fox acquisition.  What's interesting about the new structure is how it reveals the primary reasons for the acquisition: content and streaming.  This new plan reveals an unprecedented growth in executive titles at the Walt Disney Company.  Disney will place current 21st Century Fox president, chairman, and CEO of Fox Networks Group Peter Rice as Chairman of Walt Disney Television and Co-Chair of Disney Media Networks, reporting directly to Bob Iger.  The new organization under him will include chairmen for Disney Television Studios and ABC Entertainment, FX Networks and FX Productions, National Geographic Partners, Disney Channels Worldwide, and ABC News.  From this we see the content domains, particularly for television that Disney is interested in:  traditional Disney and ABC programming, more adult programming on FX, National Geographic for brand recognition and association, and ABC news programming. From a streaming component, with the acquisition, Disney will have 60% control of Hulu, it's streaming sports platform ESPN+ has passed 1 million subscribers, and more and more information keeps coming out regarding "Disney Play," the likely name of Disney's branded streaming service.  With Disney clearly defining its domains and brands, it becoming clearer how they are going to segment their offerings in light of the acquisition.  Interesting times.  And with Fox ready to close the deal January 1, 2019, we are quickly proceeding to that new world.

Second, Disney has announced that its fourth planned luxury hotel at the Disneyland Resort has been canceled.  This one is interesting because of the local politics at play.  Disney had originally planned and announced an "Eastern Gateway" project which would include a luxury four diamond hotel just west of Disneyland proper in a current parking lot, giant parking garage to capture traffic coming in from the south (a compliment to the exiting parking garage for traffic from the north), relocated security closer to the parking garage, and a pedestrian bridge over Harbor Blvd on the Eastern boundary of Disneyland.  This announcement displeased the many hotels and businesses that had cropped up along the Eastern border, as it would have cut off their quick access to Disneyland.  After raising complaints to a city council that had become more hostile to Disney's expansion, Disney quietly shelved the Eastern Gateway. 

From there, Disney announced plans to renovate Downtown Disney on the west side, shuffling around hotel plans to allow them to build an additional parking garage on the west side, as well as a luxury four diamond hotel now in the remodeled Downtown Disney area.  The luxury hotel was a key component of both plans, as it enabled the company to qualify for a city tax rebate.  Disney went forward with closing several stores and restaurants in Downtown Disney to prepare including an AMC theater, Rainforest Cafe, ESPN Zone, Starbucks, and Earl of Sandwich. 

Disney then ran into two problems:   first, it discovered buried gas pumps that had not been properly disposed of in the proposed site for the new hotel (from the old Richfield service station), and two, the city somehow recognized late in the game that the location of the new hotel had shifted, leading to the city declaring the new hotel was not eligible for the tax rebate.   A combined wrinkle arose with a proposal on the Anaheim city ballot for November that would raise the minimum wage to $18 for business that have accepted a "city subsidy."  Under the argument, the tax rebate would constitute a city subsidy.  This put the construction on hold.  Disney found itself as an interesting position then to proceed without the tax rebate and build a hotel anyway, to guarantee it would not be under the higher minimum wage if passed, or to do whatever was necessary to have the hotel be in compliance, even if it was just a check-in at the old address.  Everyone expected Disney to wait until November to announce its plans either way.

Disney defied convention in two ways.  First it asked the city of Anaheim to drop its theme-park tax incentives, ending any question of whether they would be under the higher minimum wage requirement if it passed.  Second, Disney has now announced that the new hotel has been canceled.  This puts Downtown Disney in a very awkward state.  They were able to rush Earl of Sandwich back open at least temporarily, but there is now a large vacant section Disney is lining with food trucks and a stage.  They still have the Richfield pumps that need to be addressed, requiring demolition of at least part of the theater.N  The one upside is that it has allowed the addition of an elevated pedestrian walkway from the new parking garage under construction to Downtown Disney. 

The current speculation is that the new relationship with Anaheim will likely lead to a re-development of the Eastern Gateway plans after the November elections.  The hotel/new resort complex may be moving to Garden Grove, depending on the election.

All in all, lots of interesting changes for what will likely be soon the largest entertainment company in the world.

Developing.