Ben Gilbert: uncertainty

Transcript context

…Not looking good for the core of the Disney flywheel here. And then Eisner and Wells turn their attention to the parks. And this is where some light bulbs start to go off. One of the first things they do that ends up, I think, really setting up all the following success that Eisner and Wells and Katzenberg have is they raise the ticket prices at Disneyland and Disney World. Ticket prices at the Disney parks have basically been flat since Walt died. Like, the spirit around the company and the ethos of management is like, well, Walt wanted this to be accessible to everybody and he set these prices, so, we shouldn't change them. Never mind that inflation was rampant during the 1970s. So parking at Disney World and Disneyland when Eisner and Wells come in to run the company is still only a buck. So they start raising ticket and parking prices at the parks, not enormously, but— They had so much headroom here. I mean, you can criticize them all you want today for raising prices, but they had, I don't know, 5 to 10x of you can raise the price and it wouldn't impact demand for a second back then. So, I mean, you can raise the price of parking from $1 to $5 and nobody will care. But when you do that in an operational business like parks, all of that incremental profit falls right to the bottom line. This is pure, incremenetal cash flow into The Walt Disney Company. Because they're not changing the operations at all, they're just making more money. So Eisner and Wells turn around, and they take all these quick profits from the parks and they start investing them into building the live-action studios and running the Paramount playbook.…

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