How much money do these parks like Disney or universal usually have on hand to build new attractions, and how does this effect profits during the construction?

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How much money do these parks like Disney or universal usually have on hand to build new attractions, and how does this effect profits during the construction?

In: Economics
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At any given time (except 2020) Disney usually has about $5 billion cash on hand. Profits might be affected slightly during construction, but presumably they think that building new attractions will bring more people to the park so it’s worth it in the long run.

It takes years to build a major attraction, like Star Wars land or Harry Potter land. The costs are set aside as an investment program, and they are written off against profits. Like most business investments, the company expects to see a return on that investment.

Disney and Comcast (Universal) have what we practically call “unlimited money” They make incredible amounts of money each year and are able to take out massive amounts of debt at fairly low rates in order to fund just about anything they want. Money might as well be a joke to them… but, these things aren’t that expensive so it doesn’t get to that point.

As for building new attractions, these items actually aren’t that expensive for a company of the size of Disney or Comcast. Building an entire theme park is, but just single ride or attraction would be somewhere in the $20M range. Thats what these companies spend like each minute of their existence, its completely trivial. To build an entire new “land” or something, lets say we estimate it at 10X that—even $200M isn’t that significant of a investment for them, especially when they expect the return to be huge.

Capital expenses get amortized over time, so they don’t affect earnings in just a quarter or year. They also can finance the costs to pay it off over time, even if they have the cash on hand.