Nipping at Disney profits
The one-time resilient Disney World Co. is feeling the squeeze of the current lending turmoil. Losing a longstanding line of credit for the arm Disney Vacation Club tried to raise cash by selling bundles of time share mortgages. This practice represent about 2% of the operating budget for Disney's parks and resorts.
According to recent filings, times shares rose in Disney's first quart ending Dec 27 ,09 while receivables fell drastically to $17 million. This amount was down from $41 million a year ago. The business of packaging timeshare mortgages and selling them to investors has been very profitable for Disney Vacation Club generating $40 million in profits.
Disney will probably sell less or no timeshare securities during the year 2009. Carring these mortgages instead of being able to cash them will slow the grow of the timeshare market for Disney.
The creditor that Disney has used to help many timeshare customers finance their purchase for units ranging from $30 - $70,000 has expired this year. As mortgage back security market has fizzled, many other timeshare companies have experience the same problems causing hundred of layoffs.
Many analysts believe that the sprawling media & entertainment giant is large enough to self-finance its mortgages avoiding the need for downsizing its Disney Vacation Club workforce.
According to recent filings, times shares rose in Disney's first quart ending Dec 27 ,09 while receivables fell drastically to $17 million. This amount was down from $41 million a year ago. The business of packaging timeshare mortgages and selling them to investors has been very profitable for Disney Vacation Club generating $40 million in profits.
Disney will probably sell less or no timeshare securities during the year 2009. Carring these mortgages instead of being able to cash them will slow the grow of the timeshare market for Disney.
The creditor that Disney has used to help many timeshare customers finance their purchase for units ranging from $30 - $70,000 has expired this year. As mortgage back security market has fizzled, many other timeshare companies have experience the same problems causing hundred of layoffs.
Many analysts believe that the sprawling media & entertainment giant is large enough to self-finance its mortgages avoiding the need for downsizing its Disney Vacation Club workforce.
posted by michael at
12:24 PM
