Our family is a bit crazy about Disney. We make at least a yearly pilgrimage to Disney World and we’ve also spent time at Disneyland in California and even trekked to Disneyland Paris. That trip to Disneyland Paris was bittersweet for us.
We were really happy to visit a new Disney park. There were a bunch of new rides and attractions to see. Alice’s Curious Labyrinth comes to mind as something the kids absolutely loved.
But, there was so much wrong. Tons of rides out of order, bathrooms shut down, restaurants out of food. It was so un-Disney. We expected some of that, having done research before heading to the parks. I hate to say it was worse than we thought.
A big part of it has to do with the ownership structure.
It’s the only Disney park I’m aware of that Disney doesn’t own 100% of.
ETA: Thanks to Mark and Benjamin for supplying more detail on ownership structures of other parks in the comments below.
It was a public/private partnership of sorts. The big problem is while Disney wanted to put money into the parks to fix them up, the other shareholders didn’t. It’s hard to blame Disney for being reticent to put money into something without any additional return. They did put some cash in a few years ago, but there’s significant news on the “fix Disneyland Paris” front. We have a small investment in Disney stock, mostly as a way to teach our kids about investing. Because of that, I track their stock for news of changes. It appears Disney is moving to acquire all the shares in Euro Disney. Quoting from Rueters:
Disney said on Friday it was offering 2 euros a share for any remaining shares in Euro Disney after buying a 9 percent stake from Alwaleed’s Kingdom Holdings via a share swap, increasing its holding in the European company to 85.7 percent from 76.7 percent.
If it gets to at least 95 percent it will buy out and delist the shares from the Euronext Paris stock exchange, it added.
The offer represents a 67 percent premium to the closing price of Euro Disney shares on Thursday. Minority shareholders have long complained about the way the company was run and Disney could face resistance to the offer despite the premium.
Walt Disney reiterated it would support a recapitalization of up to 1.5 billion euros ($1.6 billion), which would help to cut Euro Disney’s debt and improve its financial position.
The Final Two Pennies
The biggest thing Euro Disney needs is cash. The economy and Paris terrorist attacks created a serious drag on park attendance. Combine that with years of under-investment and, voila, you have crappy Disney.
I’m betting that even if they don’t get to 95% of the shares, they’ll still plow money in. They own enough of Euro Disney now that a large investment is mostly beneficial to them. And, Disney trades on reputation. Suffice it to say that Disneyland Paris isn’t helping much on that front right now.
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