Disney steps up efforts to bring 'Avengers' to parks

[crazy4wdw]

From CNBC:

Disney steps up efforts to bring 'Avengers' to parks

By Lisa Richwine

ANAHEIM, CALIFORNIA, June 14 (Reuters) - Walt Disney Co's design team has increased its efforts to bring the Marvel superhero team "The Avengers" to the company's theme parks after the film's smashing success, the head of Disney's parks unit said on Thursday.

Speaking as Disney unveiled the final attractions of a $1 billion investment to boost its laggard Disney California Adventure park, Tom Staggs said he intends to bring "The Avengers" characters to the Anaheim resort and other parks outside the United States.

"We were hard at work on attractions using Marvel characters previously, and that work has only intensified given (the film's) great success," Staggs, chairman of Disney's parks and resorts division, told Reuters in an interview at the park's Golden Vine Winery.

"The Avengers" has sold more than $1.3 billion worth of tickets around the world. Executives and Disney's designers, called "imagineers," are still working out how to bring characters like The Hulk, Iron Man and Captain America to the parks. "The setting has to be right, the story has to be right. That takes a fair amount of time," Staggs said.

Disney is contractually restricted from bringing Marvel characters to its parks in Orlando, where they are licensed to Comcast Corp's Universal Studios.

The new 12-acre Cars Land at California Adventure, based on the hit 2006 Pixar movie, and other expansions should help the company lift its profit margins in the parks business to the 20 percent range, Staggs said.

A decade ago, theme parks were the company's most profitable unit, with operating margins of 18 percent. This year, margins slid below 13 percent as the economy sputtered and the company spent to overhaul the California park and expand elsewhere, according to Disney's latest SEC filing.

Staggs said margins at the parks and resort divisions had improved in the past couple years. "As we look at our business going forward, there is no structural reasons we wouldn't see our margins head back to the 20 percent targets," he said.

The parks unit's earnings have been on the upswing over the last year. For the six months that ended in March, operating income rose 26 percent to $775 million, accounting for 18 percent of the company's total.

The parks' importance extends beyond their direct money-making capacity. Rides, shows and strolling characters provide marketing muscle for Disney movies, TV shows and merchandise.

Disney California Adventure has suffered from poor attendance since its 2001 opening adjacent to the larger Disneyland in Anaheim. Just 6 million people visited in 2011, compared with 16 million at Disneyland next door, according to the Themed Entertainment Association trade group.

In remaking California Adventure, Disney added a moving shooting arcade ride based on Pixar's "Toy Story" and a ride based on its "Monsters, Inc." film, along with classic Disney elements including a "Little Mermaid" ride.

For Cars Land, Disney designers traveled along historic Route 66 and brought back ideas including foods such as dill pickle popcorn that is served at the park. The highlight is Radiator Springs Racers, a roller coaster-style ride in which convertibles speed past mountain and desert landscapes reminiscent of the film's setting.

At a lavish opening ceremony this week, stars of Pixar movies and Disney-owned ABC's "Modern Family" hit comedy walked the red carpet on the new Buena Vista Street, an area designed to look like the art deco Hollywood that Walt Disney saw when he arrived in the 1920s.

Staggs said the revamp would raise attendance and increase visitors' time at the resort, but he declined to estimate by how much. "We're thrilled with the creative result and also very confident in what it will do for the business," he said.

Analyst Doug Creutz of Cowen & Co, who rates Disney "neutral," said the uncertain economy remains a challenge for the parks that Disney will have to grapple with to boost attendance by a meaningful number.

 

[lockedoutlogic]

This makes perfect sense...

As they several parks that they are trying to prop up/ increase gate at:

California Adventure

Studios Paris

And the struggling Hong Kong and undoubtedly soon to be struggling shanghai...


That all makes sense

what area did they leave out?

 

[Figment632]

Yup knew it was coming 3rd gate for DL!!!!

 

[markmouse]

How long before the Marvel characters contract expires?

 

[KeroKero]

How long before the Marvel characters contract expires?

Interested in knowing that myself

 

[ASteelersMidget]

How long before the Marvel characters contract expires?

Interested in knowing that myself

From what we've seen it can be renewed at infinite-um meaning it may never run out as long as US pays the dues.

Basically keep on dreaming for Marvel in Orlando.

 

[tjkraz]

Yup knew it was coming 3rd gate for DL!!!!

Building a 3rd gate at Disneyland is FAR from a done deal.

 

[johnGorski]

Humm, just a thought as the Billion plus was all ready commited before Disney bought Marvel, if some of the execs wished they got that billion back to play with and converted DCA into a Marvel exclusive park.


This could be intresting on how they tend to add Marvel to DL.

 

[Cheshire Figment]

From everything I read and heard locally (in Orlando) when the deal went through the contract includes:

Universal has an exclusive contract in perpetuity (that legal term means forever) for the Marvel characters in any Theme Park in the United States which is East of the Mississippi River. So nobody else, including Disney, can use these characters in any US Park East of the Mississippi unless Universal stops using the characters.

For example, this is why the monorail decorated as The Avengers is only on the MK loop and will never be on the Epcot loop. The MK loop does not go into any Park, while the Epcot loop circles part of Future World and is therefore within Epcot on the way to the Epcot station.

 

[The Wise One]

Well that sucks that we don't get anything at WDW.

 

[tjkraz]

Humm, just a thought as the Billion plus was all ready commited before Disney bought Marvel, if some of the execs wished they got that billion back to play with and converted DCA into a Marvel exclusive park.

Hard to tell. I suspect it would have been far more costly to make DCA a complete Marvel park. Most of the money was spent on new additions: Toy Story Mania, Ariel, World of Color, Cars Land. That could have been re-directed to Marvel-themed investments.

But other areas of the park only received modest enhancements or were entirely untouched. Bug's Land, Soarin, Grizzly River Run, Muppets, Tower of Terror and many other areas/attractions didn't see any noteworthy changes. Any sort of Marvel overlay would have been costly. (Although it is sort of fun to dream--how about Soarin as some sort of Iron Man flight simulator? )

Or they could have gone the halfway route and built a small Marvel land where Cars Land stands today.

Personally I think a smallish Marvel park on the old strawberry fields plot is a great idea. But Disney first needs to spend a lot of money to address its parking and transportation issues. Hard to get too excited about even the possibility of a 3rd park until there is movement on either of those issues.

 

[dairylives]

Well that sucks that we don't get anything at WDW.

Never say never. While it is very unlikely, Disney may have something up its sleeves in regards to the legal terms. If they really want it, I'm sure they will find a way to get it, eventually.

 

[eliza61]

This makes perfect sense...

As they several parks that they are trying to prop up/ increase gate at:

California Adventure

Studios Paris

And the struggling Hong Kong and undoubtedly soon to be struggling shanghai...


That all makes sense

what area did they leave out?

the only problem with that is many things that are popular here don't translate well into the other disney parks.

 

[Andy713]

I wonder if Disney is considering using/developing some of the lesser known marvel properties? It's an option I suppose to take a little know character or team and create a "buzz" if you will. Guardians of the Galaxy, Alpha Flight, Kazar, and perhaps a few others. I know some have appeared in Avengers and the x-titles, but I'm not sure how far they can stretch the "family" clause. I'm a comic fan (geek), but unless done seamlessly and with true Disney quality, I'd rather not see them at all.

 

[pilferk]

How long before the Marvel characters contract expires?

Interested in knowing that myself

In perpetuity, so long as Universal meets certain tenets (maintenance, marketing, and merchandising).

http://www.sec.gov/Archives/edgar/data/1262449/000119312510008732/dex1057.htm

Now, Uni only has rights to specific characters and their "families" (ie: rogues gallery and all associated groups/memberships of those groups)..not the whole Marvel-verse. But they've got the current heavy hitters covered.

The contract is pretty much ironclad, there is no real "renewal" process, and (despite, I'm sure, Disney's best legal minds) no apparent "out" clause. Remember, Marvel signed this deal when they were coming out of bankruptcy. The terms definitely are very kind to Universal.

Disney would basically have to buy Universal out of the contract to get rights to those characters in Orlando. And they have zero leverage, right now, in the process. Which means Universal would ask for truckloads of money (think billion+)....which Disney would be, quite frankly, stupid to pay them.

Disney is getting a steady stream of income from Universal (licensing and merchandising). There is zero overhead, zero development costs, and zero material costs associated with that revenue stream....and zero risk. They just collect the checks.

It's hard to justify huge outlays of cash to your stockholders given the above scenario.

Is it possible? Sure.

Is it likely, any time in the near future? No.

If other characters rise to popularity (though comic fans tend to know when they're being bamboozled, and force fed something), they'd be fair game (provided they weren't members of the X-verse, Spidey realm, or Avengers pantheon). For example, if Ghost Rider had actually worked out...Disney could use him in Orlando. We haven't seen anything, for now, that would indicate there's anything like that in the pipeline at marvel, and typically it takes years to get a character into the mainstream pop culture conscious.

 

[Andy713]

If the Avengers aren't destined to find residence at WDW, that's ok. I love the Marvel Universe but Disney has an amazing library from which to draw from. Would I like to see Thor in action, or an Iron Man thrill ride? Yes! But Disney can do these things with what they have in house and do them well.

One thing I would love to see is a comic "shop" specifically designed to promote and sell Marvel merchandise. If they're going to sell it at the World, then give it it's own location and identity. I'm looking at you DTD...

 

[ASteelersMidget]

If the Avengers aren't destined to find residence at WDW, that's ok. I love the Marvel Universe but Disney has an amazing library from which to draw from. Would I like to see Thor in action, or an Iron Man thrill ride? Yes! But Disney can do these things with what they have in house and do them well.

One thing I would love to see is a comic "shop" specifically designed to promote and sell Marvel merchandise. If they're going to sell it at the World, then give it it's own location and identity. I'm looking at you DTD...

Here's the issue. Name 10 characters that the GP will know and that Universal isn't using.

I'll be waiting

 

[DCTooTall]

Here's the issue. Name 10 characters that the GP will know and that Universal isn't using.

I'll be waiting

Since DTD is basically just a glorified outdoor mall at this point, I don't believe a simple Marvel retail shop would be a blatent violation of the Universal contract. They couldn't do anything "attraction-esque" there, including Meet and Greets... but they could slap a couple Marvel characters on the outside of the building and sell a bunch of Marvel crap inside with high mark-ups.


The 2 issues would really be 1. Would the sales be worth the dedicate space.... and the inevitable questions they would get about the Marvel attractions at Universal or the lack of Marvel stuff onsite beyond Merch? and 2. Is there anything in the Universal Contract that would prohibit or complicate a Marvel branded retail establishment that close to the Universal Resort. (Considering the contract does include requirements on retail space dedicated to selling Marvel branded merch, there could be something to help protect Universal's sales to justify the retail space requirements)

 

[pilferk]

The 2 issues would really be 1. Would the sales be worth the dedicate space.... and the inevitable questions they would get about the Marvel attractions at Universal or the lack of Marvel stuff onsite beyond Merch? and 2. Is there anything in the Universal Contract that would prohibit or complicate a Marvel branded retail establishment that close to the Universal Resort. (Considering the contract does include requirements on retail space dedicated to selling Marvel branded merch, there could be something to help protect Universal's sales to justify the retail space requirements)

I think they could get away with a Marvel retail outlet at DTD, given the contract tenets we've seen. Marvel had talked about opening retail outlets around the country, including in NYC, so they seemed to think they had the right to do that (though it ultimately fell through, not for contractual reasons).

That being said: Your point about brand confusion (I hear enough people confusing Universal Studios and DHS) is a good one. I'm not sure Disney wants to go through that mess.

Which doesn't preclude them from just using a section of an existing store (like World of Disney) to sell Marvel Merch in a bit more conspicuous way.

 

[Andy713]

I'm not sure brand confusion would be a problem in Disney's eyes. DTD has Lego and it's not too far away from Legoland. I do think the issue would be money. Would it perform well enough to justify it's creation? Other than movies (John Carter), Disney is pretty good at marketing and creating demand for it's goods. Perhaps a dedicated section of Once Upon A Toy to sort of test the idea to see if it warrants it's own store front. If it makes the $$$, I believed they'd at least consider it.