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I thought this was interesting, considering the conversations lately about Japan and its financial standing.
Spiderman to the Rescue of Universal Studios Japan
OSAKA (Reuters) Spiderman, who rescued Sony Corp's earnings a year ago with his smash hit movie, now has the fate of Universal Studios' money-losing Japanese theme park firmly in his weblike clutches. Universal Studios Japan (USJ), which opened in March 2001 as the movie giant's first theme park outside the United States, is hoping a new 3D adventure ride featuring the comic book superhero will help it stage a long-awaited earnings turnaround. The park in the western Japan city of Osaka is run by an affiliate of Vivendi Universal's entertainment division, now in the process of merging with US television network NBC, a unit of conglomerate General Electric. It's now spending a third straight year in the red, according to company forecasts. However, positive signs had been emerging since the Jan 23 arrival of the Spiderman ride and the number of visitors was up some 50% from a year ago, a USJ executive told Reuters. The impact is quite obvious on weekdays and we want to keep up this good momentum towards the park's third anniversary on March 31, Yuji Sasaki, a director at the park's operator, USJ Co Ltd, said in an interview. Because of the Spiderman effect, we aim to slash losses this business year, which will open the way for us to turn profitable next year. The 54ha park, with rides and other attractions based on Hollywood blockbusters such as Back to the Future, Terminator and Jurassic Park, made a mighty start by drawing 11 million visitors in its first year. But the number slumped 30% in the second year, hit by a rash of scandals over the use of tainted water, excessive usage of explosives for fireworks, and out-of-date food. The result was a net loss of 9.3 billion yen (US$84.3mil) for the year ended March 2003 against a year-earlier loss of 1.1 billion yen, which reflected special charges for the opening. In a make-or-break bid to turn itself around, USJ moved forward the opening of the Spiderman ride by one year. A previous attempt to secure more visitors, the introduction of discount passport tickets last March, had ended up with mixed results: more repeat visitors who spent less money. Per customer spending had recovered to near 8,000 yen in the latter half of 2003/2004 from somewhere above 6,000 yen in the first half, he said. This, coupled with the Spiderman effect and cost cuts, was likely to give USJ its first annual profit in 2004/05 after slashing its net loss by around 40% in 2003/04, Sasaki said.
However, in some ways the arrival of the US$127mil Spiderman ride was a double-edged sword as it forced USJ to seek emergency loans from the Osaka municipal government, its biggest shareholder, to cover a fund shortage. This will bring the size of its debts linked to the local government to 23 billion yen, on top of 125 billion yen in syndicated bank loans made at the start of its operations. The latest 5 billion yen of loans from the local government and related bodies raised a few eyebrows, as they came at a time when Japan's deflation and weak spending had already forced a series of theme parks to go under. In February 2003, Huis Ten Bosch, modeled on a 17th-century Dutch town and located in the southern island of Kyushu, collapsed with debts of 229 billion yen in Japan's biggest theme park failure. We may see more theme park failures, said Satoru Shinozuka, a researcher at Teikoku Databank. He added that the leisure and resorts segment was one of the most troubled in the third sector, in which both the public and private sectors invested. A recent Teikoku survey showed 20% of 430 third-sector leisure and resort companies suffered negative net worth in 2003 and 41% had their capital eroded by accumulated losses. Still, I don't really think USJ will slide down the ranks. It should keep its status as one of two major forces in the nation's amusement park industry for now, said Shinozuka. In contrast to the general industry gloom, Tokyo's Disney resorts Tokyo Disneyland and the adjacent DisneySea, both run by Oriental Land Co Ltd have sparkled.
Spiderman to the Rescue of Universal Studios Japan
OSAKA (Reuters) Spiderman, who rescued Sony Corp's earnings a year ago with his smash hit movie, now has the fate of Universal Studios' money-losing Japanese theme park firmly in his weblike clutches. Universal Studios Japan (USJ), which opened in March 2001 as the movie giant's first theme park outside the United States, is hoping a new 3D adventure ride featuring the comic book superhero will help it stage a long-awaited earnings turnaround. The park in the western Japan city of Osaka is run by an affiliate of Vivendi Universal's entertainment division, now in the process of merging with US television network NBC, a unit of conglomerate General Electric. It's now spending a third straight year in the red, according to company forecasts. However, positive signs had been emerging since the Jan 23 arrival of the Spiderman ride and the number of visitors was up some 50% from a year ago, a USJ executive told Reuters. The impact is quite obvious on weekdays and we want to keep up this good momentum towards the park's third anniversary on March 31, Yuji Sasaki, a director at the park's operator, USJ Co Ltd, said in an interview. Because of the Spiderman effect, we aim to slash losses this business year, which will open the way for us to turn profitable next year. The 54ha park, with rides and other attractions based on Hollywood blockbusters such as Back to the Future, Terminator and Jurassic Park, made a mighty start by drawing 11 million visitors in its first year. But the number slumped 30% in the second year, hit by a rash of scandals over the use of tainted water, excessive usage of explosives for fireworks, and out-of-date food. The result was a net loss of 9.3 billion yen (US$84.3mil) for the year ended March 2003 against a year-earlier loss of 1.1 billion yen, which reflected special charges for the opening. In a make-or-break bid to turn itself around, USJ moved forward the opening of the Spiderman ride by one year. A previous attempt to secure more visitors, the introduction of discount passport tickets last March, had ended up with mixed results: more repeat visitors who spent less money. Per customer spending had recovered to near 8,000 yen in the latter half of 2003/2004 from somewhere above 6,000 yen in the first half, he said. This, coupled with the Spiderman effect and cost cuts, was likely to give USJ its first annual profit in 2004/05 after slashing its net loss by around 40% in 2003/04, Sasaki said.
However, in some ways the arrival of the US$127mil Spiderman ride was a double-edged sword as it forced USJ to seek emergency loans from the Osaka municipal government, its biggest shareholder, to cover a fund shortage. This will bring the size of its debts linked to the local government to 23 billion yen, on top of 125 billion yen in syndicated bank loans made at the start of its operations. The latest 5 billion yen of loans from the local government and related bodies raised a few eyebrows, as they came at a time when Japan's deflation and weak spending had already forced a series of theme parks to go under. In February 2003, Huis Ten Bosch, modeled on a 17th-century Dutch town and located in the southern island of Kyushu, collapsed with debts of 229 billion yen in Japan's biggest theme park failure. We may see more theme park failures, said Satoru Shinozuka, a researcher at Teikoku Databank. He added that the leisure and resorts segment was one of the most troubled in the third sector, in which both the public and private sectors invested. A recent Teikoku survey showed 20% of 430 third-sector leisure and resort companies suffered negative net worth in 2003 and 41% had their capital eroded by accumulated losses. Still, I don't really think USJ will slide down the ranks. It should keep its status as one of two major forces in the nation's amusement park industry for now, said Shinozuka. In contrast to the general industry gloom, Tokyo's Disney resorts Tokyo Disneyland and the adjacent DisneySea, both run by Oriental Land Co Ltd have sparkled.
