Price believes in Walt Disney’s policy of reinvestment

Price believes in Walt’s policy of reinvestment


Walt Disney knew how to create the magic, but Harrison “Buzz” Price knew where
to put it.

Price, a well-renowned theme-park strategist who got his start with the famous
visionary, was the key man behind site selection and feasibility planning for
The Walt Disney Co. — including its theme-park complexes in the Orlando area
and in California. He founded international consulting firm Economics Research
Associates and, working hand-in-hand with Walt Disney, Price gave his input.
And Walt listened.

But with the recent news of takeover bids and fighting board members, what
would Walt Disney say now?

“Well, he used to say a lot of things,” Price said. “But, right now, he would
say: ‘Our purpose is to entertain, not educate,’ and he would say: ‘Keep the
people coming.’ ”

Price now bristles at the possibility that, with Disney in play as a possible
takeover target, a buyer would keep Disney’s moviemaking and broadcasting
businesses that include ABC and ESPN and sell off its theme parks.

Among Disney’s holdings are four Orlando-area theme parks employing 55,000
people and Disney Cruise Line, which operates two ships from Port Canaveral and
employs about 3,000 people.

In recent months, Roy E. Disney — Walt’s nephew — and Stanley Gold left the
Disney board, and Michael Eisner, the company’s chairman and chief executive
officer, is under fire. Cable-television giant Comcast Corp. is waiting in the
wings to possibly acquire Disney, mainly because of its interest in the media
content. Disney’s board rejected Comcast’s initial offer as being too small.

In response to speculation Comcast might add to its $54 billion offer to Disney
shareholders, then turn around and divest the theme parks, Price expressed

“I have a hard time with the thought that a new company could sell off the
theme parks,” Price said. “I do know that the parks are a thing intact. The
Orlando attraction complex is the best thing around. Whoever messes around with
it can’t screw it up. It’s to be hoped that whoever does it will maintain it
and will revert to — and enhance — the great spirit of the creators, Roy and
Walt.” He was referring to Roy O. Disney, who was Walt’s older brother and Roy
E. Disney’s father.

Theme parks require a good amount of capital but are a good source of cash
flow, experts said.

Reinvestment into the parks is critical to keep the theme parks fresh and
compelling to customers, Price said.

That is a concept that is not unfamiliar to the theme-park strategist.

“Walt invented the prevailing philosophy of massive reinvestment,” Price said.
“On average, the parks reinvest half of their operating profit. That’s the way
to keep the people coming. Walt invented that concept, and it’s still prevalent
today. He did it because he used to say: ‘I dread the day when nobody shows
up.’ ”

Price said he feels it is important to look at the history — and longevity —
of another well-known group of theme parks to understand the situation with the
Disney parks.

“The best role model you can look at on the continuity of reality is the Six
Flags corporation,” he said. “I’ve watched it for four decades, from the time
it was bought by the Penn Central Railroad to Bally’s to Time Warner to Premier
Parks. I say, ‘Onward and upward.’ Overall, the parks have always marched along
to a nice positive drumbeat.”

Price said his life in amusement-business strategic planning has been nothing
short of remarkable.

“After all, I did Walt’s strategic planning, and founded Economics Research
Associates, and we do all kinds of work for people in the attraction business,”
he said.

“Walt had the idea for a great park and wanted to know where to put it,” Price
recalled. “He had a design, and had an idea how many people would come to
Anaheim and then, after that, he worked like crazy. Walt hired me in 1953 to do
the site location for Disneyland, and it was constructed in 1955. Then Walt
said to me one day, ‘Where do we go back East?’ And we found Orlando.”

Despite all the planning and the estimating and the impact reports done ahead
of time on Walt Disney World, Price said there were a lot of variables that got
by the both of them.

“We did a dozen and a half studies on the park back East,” he said. “How big a
deal it was gong to be. Well, guess what? We underestimated.”

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