The Journal. - Can $60 Billion Boost Disney's Theme Park Magic?

Episode Date: January 28, 2026

Disney’s largest source of revenue is its theme parks and cruises. The people responsible for designing those attractions are the secretive Imagineers. WSJ’s Ben Fritz reports that the company is spending $60 billion to create more Disney magic and it's up to the Imagineers to make it work. Ryan Knutson hosts.  Further Listening: - Disney’s Big AI Dilemma - Disney Gets Into Gambling Sign up for WSJ’s free What’s News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

A few years ago, Disney hit a pivotal moment. For the first time, the company made more money from its theme parks and cruises than from movies and TV. Parks have become the most important part of Disney's business. They account for the majority of the company's profits now. That's our colleague Ben Fritz, who's been covering the company for years. For a long time, that wasn't true. Like most media companies, Disney made the majority of its profits from television. You know, there's cable networks like ESPN and the Disney Channel

were hugely profitable. But, of course, we've all cut the cord now, right? So there's a lot less money coming in from television, and Disney's really leaned into its parks as a result. Disney is leaning hard into parks. In fact, right now, it's investing $60 billion into its parks division, nearly double what it's spent in the prior decade. They're expanding all the parks.

They're nearly doubling the size of the cruise ship line. They're building a new park. And they're really relying on that investment to drive the company's growth. And the people within Disney in charge of spending all this money and delivering Disney's dreams? They are a mysterious group called the Imagineers. Imagineers, a portmanteau of imagination and engineers, are the creative brains that build the happiest.

places on Earth. I'd say that both the opportunity and the pressure couldn't be higher on imagination right now. They spend more money than anybody else in the entertainment industry. Their projects often cost billions of dollars and take years to complete. And hopefully, you know, what they build will be the next space mountain

that people love and that last decades and decades. Welcome to The Journal, our show about money, business, and power. I'm Ryan Knutzen. It's Wednesday, January 28th. Coming up on the show, how Disney is using its imagination to spend $60 billion. This episode is brought to you by Fidelity. You check how well something performs before you buy it. Why should investing be any different? Fidelity gets that performance matters most.

With sound financial advice and quality investment products, they're here to help accelerate your dreams. chat with your advisor or visit fidelity.ca slash performance to learn more. Commissions, fees, and expenses may apply. Read the funds or ETFs prospectus before investing. Funds in ETFs are not guaranteed. Their values change and past performance may not be repeated. Do you remember the first time that you went to Disneyland?

I do. I remember one thing. My father took me when I was four or five. We went to Disney World. The main thing I remember is that we walked by Captain Hook, and the actor playing Captain Hook was standing totally. still, so still that I thought he was a statue.

And then as I was looking at him, Captain Hook jumped out at me. My God. And he scared the crap out of me. And then he hugged me and we have a nice photo and everything. But yeah, that is my first memory of a Disney theme park. Disney's theme park started out as just an idea inside the mind of the company's tireless founder,

Walt Disney in the 1950s. Walt Disney's Disneyland. Here's Walt Disney in the 1950s. interview talking about his dreams for a park that would bring Disney's magic to life. We hope that it will be unlike anything else on this earth. A fair, an amusement park, an exhibition, a city from the Arabian nights, metropolis from the future. In fact, a place of hopes and dreams, facts and fancy, all in one. To make his dream a reality, while Disney needed a group of people with a very special set of skills that didn't really exist back then.

So the Imagineers, they weren't called that originally. They were the group of people who Walt Disney brought together in the 1950s to fulfill his crazy vision for a theme park, which became Disneyland. Nothing like it had ever been built before exactly. So he had to figure out, okay, what kind of people do I need? Engineers, architects, artists, and designers all work together using the tools of imagination to create the Disney-themed experience. He drew a lot of them from his movie studio. There were, you know, people who were designing sets and costumes and so on. And then he had to recruit a lot of engineers, people who knew how to do the physical work.

Who actually knew how to build stuff? Right, because they had to build things, exactly. And weird things, not like buildings that are up to normal code. Yes, absolutely, right. Not erected building. Like, they had to start building mountains with roller coasters. And they built a river eventually with a boat that went through it. They did all sorts of crazy stuff.

In this land, hopes and dreams are all that matter. We hope that through our television shows that you will join us and take part in the building of Disneyland. And that you'll find here a place of knowledge and happiness. The first park, Disneyland, opened in Southern California in 1955. And the rest, as I say, is history. For decades, Imagineers have built some of Disney's most iconic attractions. huge, ambitious, expensive projects that drew in massive crowds. The Haunted Mansion, Pirates of the Caribbean, Space Mountain,

it's a small world, that geodesic dome in the center of Epcot Center. Those were all created from scratch by Imagineers, and they've become iconic parts of world culture. And all of those things were like original ideas. Back then, they weren't making rides and stuff like that based on movies. They were making some, but not a lot. It was just one part of the theme park. And other parts, you know, there was Adventure Land,

which was all about like traveling to the Wild West. And there wasn't very much based on the Disney movies, for example. And Tomorrowland was all about like a science fiction future. And again, there was nothing from the movies there either. So there was always a big presence for original creations in the theme parks. That's been an important part of imagination. history. In the 1990s, Imagineers also added a new venture to their portfolio, Disney Cruises. But over time, things between the Imagineers and the rest of Disney started to get a little tense,

especially as costs grew. The Imagineers, I think, would be fair to say, had a very healthy ego. They thought they were special, and, you know, they were special. They did this amazing work that nobody else could do, and the stuff they created was vital to. to everything Disney is and how people perceive the company. But on the flip side, a lot of people at Disney felt like they didn't play well with others. Basically, they considered the executives at Disney to be people they had to convince to give them money to do the work that they wanted to do. I can sort of imagine it's like the creatives versus the spreadsheet types. Yeah, totally.

And the creatives had this confidence that if they were just left alone to do their best work, then everybody benefited. And so the imaginators started finding ways to maneuver around the spreadsheet types. I heard about this term called progressive seduction, where they basically knew if they went in and they said, this is our grand idea. It's going to take this many years and this many billions of dollars that the executives who were overseeing the budgets were going to freak out a bit. Right. They're not going to spend that much money and have it take 10 years, like get out of here. Right. Why do we need to do that? Couldn't we do the version that's 50% as good and that would be fine? so they would come in with the 50% as good version and everybody would be on board would be great

they'd start working on it and then they'd be like oh wouldn't it, you know, it would be so cool what if we just added this one feature to it? It would only take a few more months and a few more million dollars and everybody, you know, they're already into it and they'd be like, sure, that seems so cool.

And then once we're doing that, they'd be like, and if we're going to do that, we really should add on this other thing. And then there's one more thing. And look, it's only another, you know, $20 million or whatever and they would keep doing that until eventually they got most or all

of what they wanted. In 2017, Disney unveiled an attraction based on the world of Avatar, the movie by director James Cameron about the Blue Aliens. It was supposed to cost $850 million, but ended up costing $1.2 billion, according to people familiar with the matter.

Another issue? The Imagineers have been known to miss deadlines. Such was the case with a 2019 Star Wars attraction called Galaxy's Edge. The idea was for riders to choose, between five different adventures and the iconic Millennium Falcon, meaning they'd be incentivized

to come back and ride it again and again. But as Galaxy's Edge was being built and the budget was rising and there was pressure to get it done, then they actually cut that way back and now there's currently only one mission on the Millennium Falcon. They ended up scrapping the other four.

What is this story about the Millennium Falcon reflected about these issues with the Imagineers versus the executives and their expectations? I mean, there's constant tension between the Imagineers and the executives over what can we build and how much is it going to cost?

And so sometimes the Imagineers kind of win and the project gets postponed or the budget goes up. Sometimes the executives win, like in this case, and they say, sorry, I know you have ideas for five missions, but you're only going to get to do one. Imagineers have also felt increasingly constrained by Disney's push to harvest more from existing IP

based on movies and TV shows instead of dreaming up their own ideas. So all the biggest stuff that the Imagineers have done in the past 20 years have been based on the movies. There's Cars Land, there's The Frozen Ride, there's a Ratatoui ride. And on the one hand, it's been very successful. On the other hand, a lot of Imagineers have been very frustrated that they're basically not allowed to be as creative as they used to be.

During the 2010s, Rank and File Imagineers often clashed with the head of their division, a man named Bob Chaypec. Chaypec was very frustrated that they were constantly over budget and constantly behind schedule. And he felt that they needed to be whipped into shape a bit. And in the late 2010s, when Chepic was running parks, Imagineering was being very closely scrutinized. Chapik was installing people who were going over all the budgets

and constantly questioning the imaginers about what something was really going to cost, how long it was really going to take. He basically felt that the imaginers had to earn back their credibility. So it was a time of really diminished ambition for imaginary. Things hit an all-time low in 2020, when the pandemic meant that Imagineers couldn't work in person, and the theme parks were closed.

Most Imagineers were furloughed, and eventually more than 400 were laid off. Around this time, the company also unveiled a plan to relocate the Imagineering team from California to Florida in a bid to save money on taxes. That plan was eventually scrapped, though. It was a dark time. The morale in Imagineering was the lowest it's been in a very long time,

and they weren't doing as many cool projects. So I think they really felt like, as one person said to me, it just wasn't fun anymore. And it's hard, if you're an Imagineer, the least you should be able to say is that your job is fun, right? But just a few years later, the Imagineers got a lifeline. When a former CEO returned at the hell,

That's next. In 2022, Disney got a new CEO, who was actually an old returning CEO, Bob Iger. And when Iger took over, he saw a company facing numerous challenges. TV revenue was rapidly declining, and the streaming service Disney Plus wasn't making up the difference. When Bob Iger comes back, he can see that the television business is declining rapidly, and streaming is not close to making up for everything they've lost. the profits from TV. So he needs a new area where the company can really grow in the long term. And parks makes a lot of sense.

While the movie and streaming businesses were in decline, parks were taking off. Since the pandemic restrictions have eased, people are rushing back to the parks. They're full every day. There's way more demand to get into the parks than there is capacity. At first, Disney responded to all this demand by jacking up ticket prices. It was a way to capitalize on the in-person hype. And it helped regulate crowd sizes at the parks. But it also meant that Disney had to show that those more expensive tickets were worth the price.

Disney is not going to cut prices. And that's not a good loan from growth strategy either. What they wanted to do is make the experience better so people feel like, okay, I spent a lot of money, but I got my money's worth. I spent a lot of money, but I maybe felt like, not that I had the place to myself, but that the lines weren't too long.

I wasn't, you know, waiting for everything and just shoulder to shoulder. Right. And I went on all these. spectacular rides, and a lot of them are new. I've never seen them before, and they're better than anything else I've ever seen. Disney has said its theme parks are within financial reach for middle-class families, and that it offers a range of price offerings for different products, as well as year-round promotions to keep it that way. With a renewed focus on parks,

Eiger wanted him engineers to feel more empowered. He felt like they were a creative company and that the balance had gotten out of whack and there was too much focus on the numbers and not enough focus on creative excellence. And that was true across the company, and it was true in Imagineering. So in 2023, he gave the Imagineers $60 billion to work with over a 10-year period. The money is meant to boost Disney's theme park and cruise offerings. To oversee all this work, Eiger also rehired a beloved Imagineering boss, a man named Bruce Vaughn. Bruce Vaughn is a veteran Imagineer who joined in the 1990s and eventually rose to be the co-president. he was pushed out in 2016 when Bob Chappick was making his changes.

You sat down with an interview with him. What does he like? He is like a really fun person, as you might imagine. He has this crazy office full of, with all these toys and models from the theme parks over the years. He has a little scale model on his table of Shanghai Disneyland, which he helped to build. He has, you know, everybody who works in the parks wears a name tag with their first. name and he has like dozens of name tags on his walls that he's had over the years. And he really speaks with like a lot of genuine excitement about the, about the work that the

Imagineers do. You know, you can tell that this is something that's personally thrilling for him. So how did the Imagineers react to this news once Bruce Vaughn is back and they're getting a giant check? They're thrilled. I mean, I would say that the morale at Imagineering has swung back up in a big way. People are very excited about the opportunities that are in front of them and the fact that they have the full backing of the company and they have a leader who they trust. So one of the big moves that Disney announced recently is that they're building a whole new Disneyland in Abu Dhabi. But what else are they working on? Yeah, they're doing so much, Ryan. I don't think we have time for me to listen to all. They're nearly doubling the size of the cruise ship fleet

from 7 to 13, and the Imagineers also do all the design work on the ships. They're doing expansion work at every one of the company's six global resorts. So Shanghai, Disneyland, Tokyo, Disneyland, Hong Kong, Disneyland, Disneyland, Disneyland, and Paris Disneyland are all getting new lands, new rides, etc. There are new Marvel rides in Anaheim, there's a new Lion King land in Paris, there's an incontal ride in Orlando. Wow. So that sounds like a ton.

That is a ton. That is absolutely more than imaginering has ever been doing at the same time in its history. Disney describes this new era as turbocharging the parks business. For Vaughn, the returning imaginary boss, the situation comes with high stakes. Bruce Vaughn told me, you know, on the one hand, he wants to do creatively excellent work, but he doesn't want to go back to the way it was 15 years ago when everything was over budget and behind schedule. So he's trying to balance doing great work. keeping the Imagineers happy

and having things come in at the price and on the schedule that they're supposed to. Bruce told me this is the most ambitious time in the history of Walt Disney Imagineering. Wow. And the pressure couldn't be higher for him to get it right. And if he fails, then, you know,

it's going to do major damage to the entire Walt Disney company. A Disney spokeswoman said 93% of Imagineering's work in the past four years has come in under budget. Disney's big push into parks is all happening in a moment when its rivals are also making big investments hoping to take some of the company's customers.

Universal, which is their biggest competitor, has by this point been investing a lot in their own theme parks. And in Orlando, Universal actually has three different parks now. And the newest one, which just opened last year, called Epic Universe, is if you ask most theme park fanatics,

probably the best park in Orlando right now. It's one of the best ones in the United States. So Disney can't just rest on its laurels and assume that if families want to go to a great theme park, they're going to go to a Disney one anymore. They could easily go to Universal. For the Imagineers, morale is improving, and they've got more money to work with than ever.

But, as they might say in a Disney movie, be careful when you wish upon a $60 billion star. Managing a creative group that spends huge amounts of money is incredibly difficult. And we can just see that in history The Imagineers have such a hard time doing excellent work and being on schedule and being on budget. And if any one of those things goes wrong, it's a problem. People in Imagineering described it to me as like a three-legged stool where they want to be creatively excellent,

they want to stay on schedule, and they want to be on budget. And if any one of those legs falters, then the stool falls over. And now they have a huge opportunity in front of them, but they need to keep that stool balanced. And it's really, really tough. That's all for today. Wednesday, January 28th. The Journal is a co-production of Spotify and the Wall Street Journal.

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