Global Perspective
CHINA DISNEY ROLLS THE DICE AGAIN
With the opening of Disneyland in Anaheim in 1955, the notion of the modern theme park was born. The combination of the rides, various other attractions, and the Disney characters has remained irresistible. Tokyo Disneyland has also proved to be a success, making modest money for Disney through licensing and major money for its Japanese partners. Three-fourths of the visitors at the Tokyo park are repeat visitors, the best kind.
Then came EuroDisney. Dissatisfi ed with the ownership arrangements at the Tokyo park, the EuroDisney deal was structured very differently. Disney negotiated a much greater ownership stake in the park and adjacent hotel and restaurant facilities. Along with the greater control and potential profi ts came a higher level of risk.
Even before the park’s grand opening ceremony in 1992, protestors decried Disney’s “assault” on the French culture. The location was also a mistake the Mediterranean climate of the alternative Barcelona site seemed much more attractive on chilly winter days in France. Managing both a multicultural workforce and clientele proved daunting. For example, what language was most appropriate for the Pirates of the Caribbean attraction—French or English? Neither attendance nor consumer purchases targets were achieved during the early years: Both were off by about 10 percent. By the summer of 1994, EuroDisney had lost some $900 million. Real consideration was given to closing the park.
Saudi prince provided a crucial cash injection that allowed for a temporary fi nancial restructuring and a general reorganization, including a new French CEO and a new name, Paris Disneyland. The Paris park returned to profi tability, and attendance increased. However, the temporary holiday on royalties, management fees, and leases is now expired, and profi ts are dipping again. Disney’s response was to expand with a second “Disney Studios” theme park and an adjacent retail and offi ce complex at the Paris location. Again in 2005, the Saudi prince injected another $33 million into the park.
