It Makes a Difference Who You Are

Disney long sought to serve a broad swath of consumers. No more.

In July 1993, The Walt Disney Company issued $300 million 100-year “Sleeping Beauty bonds.” Cynics called them “Mickey Mouse bonds.” Or just plain goofy.

They bore a 7.55 percent coupon with a July 15, 2093 maturity, callable in 2023 at $103.02, declining to 100 percent of face value after July 15, 2043. It was the first century-bond, at least in the U.S., since 1954, and beat Coca-Cola’s issuance of 100-year, no-call bonds by a day. The Disney deal was announced as a $150 million issuance, but convexity and duration demand doubled the deal’s size. The debentures yielded less than 100 basis points (one percent) more than the then (off-the-run) 30-year U.S. Treasury bond.

Some pension and insurance companies, which have some very long-term liabilities to match, found the duration attractive. But many agreed with Pimco’s then “Bond King,” Bill Gross, who thought Disney was simply locking in “low yields” for a long time and didn’t find the paper attractive as a buyer.¹

That idea wasn’t crazy. The bond market was barely a decade removed from a 20 percent fed funds rate, and the market’s leaders remembered it well. Still, it turned out to be wrong. Yields on the 30T rose just over a year later to about 8 percent but haven’t seen anything like those levels since.

Owners of the Disney bond today continue happily to clip a 7.55 percent coupon.

The Wall Street Journal‘s headline announcing the issuance: “Disney Amazes Investors With Sale of 100-Year Bonds.”

I was working institutionally at the time on the cavernous Merrill Lynch fixed income trading floor at the World Financial Center in New York City and was involved in the deal. We were Morgan Stanley’s co-manager. My favorite client, a pension manager for over 40 years, sardonically reminded me that someone buying 100-year bonds issued by the world’s leading entertainment business a century before would have purchased the debt of a player-piano company.

It’s easy to miss how much things change over time, even an historically great business like Disney. Not always for the better. That’s the subject of this TBL.

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It Makes a Difference Who You Are

Since 1987, it has become a tradition that a winning player, most often the MVP, is celebrating his dream-come-true victory on the field immediately following the Super Bowl and appears to be asked what he will be doing next. He exclaims, “I’m going to Disney World!” Or Disneyland. He then becomes part of a Disney parade the next day at one of the parks and commercials for The Walt Disney Company are created. Last year’s iteration, featuring Jalen Hurts of the Philadelphia Eagles, is embedded below (previous versions here). Watch it and pay special attention to the music.

When I was a kid, The Wonderful World of Disney aired on NBC on Sunday evenings at 7pm. Its theme was the song in the video above: When You Wish Upon a Star. Its first lines – originally sung by Jiminy Cricket in the Disney classic, Pinocchio – are significant for my purposes today.

When you wish upon a star
Makes no difference who you are
Anything your heart desires
Will come to you
If your heart is in your dream
No request is too extreme
When you wish upon a star
As dreamers do.

They were aspirational, sure, but they were grounded in reality, too (at least within the Disney experience). I visited Disney World with my parents soon after it opened in late 1971. We weren’t rich – like 61 percent of Americans, we were solidly (lower) middle class – and my mom and dad thought the trip was expensive, but it was doable. Just as important, they thought it offered real value.

It made no difference who we were.

Adult admission in 1972 was $3.75 (almost $30 in today’s dollars). There were lines, but the attractions were a blast. The Disney Polynesian Village Resort hotel was about $35 per night (about $275 in today’s dollars); the Disney campground was $11 per night (about $85 in today’s dollars). A simple burger, fries, and drink cost $1.50; at the same time, McDonald’s was advertising two hamburgers, fries, and a Coke with “change back from your dollar.”

A “sit-down” meal was about $3 per person, or a bit more (around $25 a person in today’s dollars). So, the food wasn’t exactly inexpensive, but it was tasty, well-prepared, and affordable. Indeed, everything about Disney World was accessible, if not cheap.

Disney ticket prices rose slowly for a long time, often more slowly than inflation. An employee handbook from the 1950s quotes Walt Disney as saying, “We roll out the red carpet for the Jones family from Joliet just as we would (with a few embellishments) for the Eisenhowers from Palm Springs.”

It didn’t seem too much of a stretch to say Disney World was “the happiest place on earth” (a phrase coined by Walt Disney himself for Disneyland in 1955).

For most of the park’s history, Disney World, like all Disney properties, was priced to welcome people across the income spectrum, embracing its motto, “Everyone is a V.I.P.” In other words, it “makes no difference who you are.”

That’s no longer true.

Today’s middle class is now barely half of all Americans, while the cohort of those with upper incomes has nearly doubled, to almost one-in-five. According to Datos Insights, in 1992 there were 88,000 households worth $20 million or more in 2022 dollars; by 2022, there were 644,000. Perhaps not surprisingly, then, Disney – not uniquely – has come to focus its offerings on the affluent customer. According to Disney’s CFO, as of 2025, “[o]ur consumer tends to be at the higher income deciles.” Disney caters to him as part of its “yield management” strategy (increasing revenue per customer), which is the company’s primary driver of growth.

Admission is now $119 per day. A burger, fries, and drink combo costs around $25. For table service, guests should expect to pay at least $35 for an entrée, with appetizers costing at least $15. The cost of a typical room at Disney’s Polynesian Village Resort now averages about $900 per night. Overall, over the past decade, concession prices have increased at about twice the rate of inflation.

That’s bad enough, but the class differences in the available options are now striking. Signature dining at places at Epcot like Takumi-Tei and Monsieur Paul will cost guests at least $200 per adult. As The New York Times recently reported, the 1,863-square-foot King Kamehameha suite at the Polynesian, which offers a huge bi-level great room, views of Cinderella Castle and a soaking tub, can go for $3,000 a night. The sleek GEO-82 Bar and Lounge in Epcot offers a package that includes a tower of small bites, champagne or cocktails, and a table with views of the park’s fireworks show for $179 a person (entry to the park not included but required). A wine-paired prix fixe meal at the Michelin-starred Victoria & Albert’s at Disney’s Grand Floridian hotel starts at over $1,200 for two.

“Disney Parks Around The World – A Private Jet Adventure” spans 24 days, 6 countries, all 12 Disney theme parks worldwide, and other destinations all for the low, low starting price of $115,000.

And so on.

Nobody should be surprised, then, that according to a recent survey, nearly half of parents who have taken their children (under the age of 18) to a Disney park, one-third of visitors with annual incomes above $100,000, and about a quarter of all visitors, go into debt to do so. Those numbers are far higher than comparable data from just five years ago.

The information age has driven this company shift in emphasis. The rise of the internet, the algorithm, the smartphone, and now artificial intelligence are giving businesses the information easily to target the fast-growing masses of high-net-worth Americans.

Accordingly, in 2025, continuing a longer-term trend, Disney visitors declined while spending per visitor increased sharply, which translated to increased revenues and profits.

In 2012, the My Disney Experience app gave guests an easy way to check which rides were open, wait times, show times, restaurant bookings, parade routes, and more. Insidiously, Disney gained a treasure trove of information on exactly where guests went, what they purchased, and how much they spent on site. Disney mines that data to maximize profit. “Premiumization” for the win.

The middle-class customer paid the price, often literally, creating a “premium fault line.” Spending is bifurcated among income levels, with lower and middle-income customers spending less while affluent customers spend more than before – a consistent theme throughout the travel industry.

“Who they are” now matters. A lot.

In 2021, Disney eliminated its free FastPass system, upsetting many less well-to-do customers, and started offering ride reservations for $15 each at Disney World. Over the next three years, the line-skipping options multiplied in number and in price. As The Wall Street Journal reported in early 2025, “Five years ago, the skip-the-line feature FastPass was free. Now visitors choose from three different tiers of Lightning Lane passes for the privilege – the most expensive reaching $449 a person a day.” Disney also began offering perks for those staying in its (increasingly expensive) properties – one of them being the ability to make ride reservations before those staying elsewhere. Disney made $724 million from skip-the-often-very-very-long-line products from late 2021 to June 2024.

The costs and consequences are obvious. A survey commissioned by the Journal found that 74 percent of respondents believe that experiences like visits to Disney resorts have become financially out of reach. Understandably, voices inside Disney are concerned that middle class customers are being priced out of the experience.

One of the big economic puzzles in recent years has been the persistence of serious consumer negativity even though times have been pretty darn good (and infinitely better than the lives of those in the past). Nearly everyone has a job, median household incomes are historically high, and we are finally spending more than we did before the pandemic. Yet, all but the most affluent are seemingly unhappy with the economy or their place in it.

I suspect the primary reason is that we compare ourselves and our situations not to some objective measure, past or present, but to other people, most often those we see as peers, or to our past selves.

Compared with the past, a Disney trip is significantly more expensive, to be sure, but perhaps more important, it feels even more expensive still, because at every turn one is being invited to add-on, level up, and spend more, and somebody else is always getting a more exclusive experience. Thanks to social media, we can all now see the experiences that divide us. Go to Instagram and search for #Club33, the invitation-only dining clubs hidden within Disney properties, and feel the disappointment.

Based on what we are willing to spend, which is based upon when we have and earn, we see different ads, stand in different lines, eat different food, stay in different hotels, and watch the parade from different locations. The market is highly segmented and we are, too.

“Who we are” makes a big difference.

Based on the Federal Reserve’s Financial Accounts and Survey of Consumer Finance, Mark Zandi, Chief Economist of Moody’s Analytics, found it unsurprising (report here) most Americans feel like the economy isn’t working for them. Those in the bottom 80 percent of the income distribution – those making less than approximately $175,000 a year – have merely kept pace with inflation since the pandemic in terms of spending. The 20 percent of households that make more have done much better, and those in the top 3.3 percent of the distribution have done much, much, much better.

The data also show that the U.S. economy is being largely powered by the well-to-do. The top 10 percent of earners now account for roughly half of all consumer spending. So long as the well-off keep spending, the economy should avoid recession, but if they turn more cautious, for whatever reason, the economy has a big problem.

Federal Reserve Chair Jerome Powell described this divide in plain terms in December.

“If you listen to the earnings reports for consumer-facing companies that deal with low- and moderate-income people, they’ll all say that we’re seeing people tightening their belts, changing products they buy, buying less. And it’s clearly a thing. It’s also clearly a thing that asset values – housing values and securities values – are high, and they tend to be owned by people at the higher end. Most of the consumption does happen by people who have more means. The top third accounts for way more than a third of the consumption.”

Some call this state of affairs a “K-shaped” economy. The higher end of the “K” refers to higher income (increasingly older) Americans whose income and wealth keep rising as the lower end, referring to lower income (increasingly younger) American households struggling with weaker income gains and steep prices. In other words, the really wealthy (the top 10 percent driving 50 percent of spending, for example) are doing quite well. Their credit-card spending and travel budgets have surged together with stock and home-equity gains (some are celebrating the new 100 percent tax write-off by buying private jets). For everyone else, the economy is meh. Or just plain lousy.

Such talk has become ubiquitous. The divide explains some economic puzzles: Strong stock markets and corporate profits coexist with sluggish hiring and mounting financial strain for lower-income and middle-class Americans. This divide should be difficult to sustain as businesses target premium goods to the wealthy while cutting costs for struggling middle and lower-income Americans.

Disney, like much of American business, has shifted its emphasis to the upper part and away from the lower part of the “K.” To where it makes a big difference who you are.

That isn’t how Walt Disney ran things. He understood synergy long before it became a buzzword for businesspeople trying to sound smart.

At its heart are timeless stories and unforgettable characters we know by name, soaked into iconic worlds, story lines, and soundtracks transmitted onto billions of screens around the world, creating immense brand affinity and franchise development via sequels and spinoffs. These stories fuel multiple revenue streams by creating franchises that drive trips to the movies, theme park visits, merchandise purchases, comic books, streaming subscriptions, Broadway shows, and generate licensing revenue, with each element reinforcing the others in a self-sustaining feedback loop, building momentum, recurring revenue, and long-term value.

It came to be known as the “flywheel” and Mr. Disney originally outlined it on a napkin in 1957 (see above). Todd Zenger of Harvard Business Review calls the flywheel “a corporate theory of sustained growth.”

That entire structure is now at risk. Fewer park customers means less flywheel. Disney, like corporate America generally, thinks the affluent will make up the slack. I’m unsure, and also worry about the political stability of a country increasingly focused on its most affluent citizens.

Disney stock seriously underperformed in 2025, returning 3.3 percent, while the S&P 500 returned 17.9 percent, including dividends. I fear the market is onto something.

Disney is going to find out how much difference “who you are” can make. And if it sticks.

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Totally Worth It

Marchetti’s Constant is the idea that throughout human history, from cave dwellers to ancient Greeks to 21st century New Yorkers, people tend to commute for about an hour a day – 30 minutes out, 30 minutes home. Thus, faster travel leads to longer distances, not less time (see here and here).

In Italy, the unlucky number is 17, not 13, because XVII is an anagram of vixi, Latin for “I have lived” (note the past tense).

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Benediction

This TBL’s benediction is Calon Lân (Welsh for “A Pure Heart”), a Welsh hymn often described as “a second national anthem.”

I don't ask for a luxurious life
the world's gold or its fine pearls,
I ask for a happy heart,
an honest heart, a pure heart.

A pure heart full of goodness
Is fairer than the pretty lily,
None but a pure heart can sing,
Sing in the day and sing in the night.

If I wished for worldly wealth,
It would swiftly go to seed;
The riches of a virtuous, pure heart
Will bear eternal profit.

(Chorus)
Evening and morning, my wish
Rising to heaven on the wing of song
For God, for the sake of my Savior,
To give me a pure heart.

We live on “a hurtling planet,” the poet Rod Jellema informed us, “swung from a thread of light and saved by nothing but grace.” To those of us prone to wander, to those who are broken, to those who flee and fight in fear – which is every last lost one of us – there is a faith that offers hope and love. May we offer grace first and live the Truth before speaking it. And may grace have the last word, too. Now and forever. Amen.

As always, thanks for reading.

Issue 192 (January 22, 2026)

1. Why in the world didn’t the U.S. government issue lots of 100-year, 50-year, and 30-year paper when rates approached one-percent? It issued mostly short-term paper instead.