Reuters is reporting that EuroDisney may be forced to close

[Mooobooks]

I visited Disneyland Paris and The Walt Disney Studios early last December. It was not my first winter visit.
What's it like in the winter? Like much of Europe in that area, it's frigid and very damp--so even if it's 40 degrees, it feels like 29.
It's either piddling rain or raining heavily much of the time. It's virtually always cloudy.
Sometimes it snows.
It's hard for Americans to imagine what it's like to visit a Disney park when it's freezing and raining, when you're wearing gloves and a scarf and a heavy coat.
It's an entirely different experience, and one I've never gotten used to.
That said, Disneyland Paris is a wonderful park, though some of the attractions are closed seasonally (such as the great walk-through of The Nautilus).
The Walt Disney Studios just plain sucks. It's a lousy cheap park with very few attractions, most of which are crummy. The stunt show is highly overrated, too--you'll see when it opens in Florida. There is a huge hole in the center of the park where the Tower of Terror is supposed to be and is not. A real mess.

 

[stal]

Hi, I live quite near London, in England and have never been to DisneyLand in Paris, but have been to Disney World 4 times now. Why? Because the price of going to DLP for 3 or 4 days is about the same prices as going to Florida for a week. I do want to go to DLP, its just i would rather go to Florida, to have more choice of parks, better weather, longer holiday for around the same price.

 

[manning]

we've been when it 's been -15 (celsius that is I'm sorry but I don4t know what that is in farenheit)

That is +5 farenheit

 

[matty624]

I took 47 children from my school (I'm a headteacher, UK version of Principal) last January. The children had a great time, but it remained at -10C or below, through the days and nights. It was so cold it took most of the morning for some of the rides to be thawed out to run. Suffice to say, we walked on to all the rides and didn't have to to queue for even 30seconds at any time.
That said, I will never again complain about the heat in Orlando in July/August.
Ian

 

[JIMINOCCHIO]

i hope it doesn't close. i want to go back some day.

 

[Another Voice]

This situation is going to become a vast international game of chicken.

The French government and most of the European investors have felt for a decade that The Walt Disney Company didn't put enough money into Euro Disney's debt restructuring plan. Essentially, Disney dropped the EDL problem into their laps and walked away. Things were fairly quiet while the fortunes appeared to the improving for the resort, but now that things are bad once again (or even worse than before depending on who you listen to) this time is going to get nasty.

The basic problem is that Euro Disney is not making enough money to pay for all the loans it took to build the place in the first place and all the loans it's taken out to pay off the loans it took to build the place in the first place. There is a real danger that it will soon not earn enough money even to pay its monthly bills, let alone pay off its credit cards. Under the terms of the last debt restructuring, if EDL misses payment the debtors can accelerate payments. If Euro Disney can't pay them immediately, the creditors can foreclose

Although Disney has already extended about $200 million in credit this year to keep EDL operating, France and European investors have been left holding billions in loans. The Euro Disney stock (owned by a lot of institutions) is politely called a "speculative stock" - meaning frame the certificate and mount it on the wall right next to your Pets.com holdings. The Saudi prince that bailed out the EDL the first time around has sold almost half his stake and is unlikely to put in more money (among his many other problems)*.

Essentially, either Disney and/or the French taxpayer are going to have to buy out all the debt so that EDL can start with a clean balance sheet and send the wolves home with full stomachs. We all know the likelihood that a French government right now is going to drop over a billion euros into the Hellmouth of American Imperialism: The Sole Source of All That Is Wrong In The World.

So that leaves Michael Eisner to square off against the Euromoney.

Disney has its own debt problems at this point and a billion or two hit would all but destroy any shot at putting Disney of strong legs again. Eisner also likes to boost about who he was willing to let EDL close down back in 1994 rather than put in more money. Internally it will be a tug of war between his greed (keeping all the money he can) and his ego (not admitting that Euro Disney is a long, drawn out failure). It's also a question about how far the Europeans will push the threat of foreclosure. Will they want to run the place on their own, or will they loose even more money to those "those greedy uncouth ignorant cowboys"?

Things will be quiet through December and into January. But the tug-of-war will start very soon after that. There are large payments due in March; the first battle will be whether those payments can be postponed. If I make this sound like a soap opera, it's intentional. This entire project from the very outset has been driven more by ego and greed than business sense.

I expect it will end like that as well.



* - You remember this guy. He's the one that showed up in New York and made a deal about handing Mayor Rudy a check for $10 million…and then promptly said that American deserved 9/11. Yea, same guy.

 

[crusader]

I think Disney's disclosure of this issue in their recent earnings report is enough of a public statement of risk and uncertainty. What is it that egos and greed are preventing? I'm sorry, but I fail to see how that becomes the reason this venture is failing.

How many times have we been hearing from the many sounding boards here that throwing more money at a problem is not the solution. So what is it Disney should do in this particular situation?

Exactly what they are. They will need to restructure the debt before March's payment is in default. (and let's face it, it already is.) There is no way a forclosure is imminent. Trump had the same leverage Eurodisney does in terms of the financing morass surrounding this Taj Mahal size investment. It is so entwined with the stability of the banking community, there will be concessions and a probable stay from creditors to improve liquidity. That means Disney has to wait even longer to recoup what looks to be pennies on the dollar here.

I would also anticipate even more substantial internal organizational changes and a solicitation for takeover.

 

[megaelch]

to add something to the arguments mentioned...

i am very sure the french government and the Ille-de-France region + city of Paris would grant financial help if they could, but european ( !!! ) law does not allow to sponsor a bancrupt company locally without helping all all competitors around europe.

we all love to have this park open in the future, but let`s face it .. like mentioned before operational income did not cover operational costs in the last quarter reported, in other words they don't make enough money to cover their running bills, not speaking about new rides or park improvements....or paying off large chunks of old debit ...

and the worst time of the year is still to come ( winter ) so i agree march will be the date to watch ...

in my opinion it is .. Eisner pays or they will go bancrupt and come back from the ashes and a new company name ..

Still wondering why the park was build by EURODISNEY SCA and not Walt Disney Co. itself ??????

hmmm

Stephan

 

[DancingBear]

Originally posted by megaelch


Still wondering why the park was build by EURODISNEY SCA and not Walt Disney Co. itself ??????

hmmm

Stop wondering. Just as with the Japanese parks and the Hong Kong park, the use of separate entities and other investors' money is designed to protect Disney against the downside risks that are being experienced in Disneyland Paris.

 

[sgtdisney]

EuroDisney Stock tanked after it opened and never recovered. After this recent news my Dad finally decided to sell his stock. If I remember correctly he purchased the stock at around 25.00 a share when it opened. It dropped to close to 1.00 a share shortly after and I think when my Dad sold it last week it was around .50 or .60 a share. In fact the brokerage house charged a premium to sell it because it is such a risky stock now. Such a shame for what EuroDisney could have actually been. Nothing against our French friends here on DIS and abroad, but I always wondered if the park would have been more profitable if it had been located in a different country. Maybe it wouldn't have made any difference..

 

[megaelch]

Hey dancingbear.. that was meant to be sarcastic ))

I doubt it would have made a difference to open in another country... paris is one of the biggest tourist destinations around europe.. maybe the project is "oversized" and the new " small Disneylands " in Hong Kong and / or Shanghai are the right way to go in the future ???

Please don`t flame me i like my big fat Disneyland Paris park .. but from the financial view it failed..

Let`s discuss this ... i like this thread giving different views...

Stephan