Large European mouse seeks employment

[Sarangel]

Found on the Web:

Adults dressed as Mickey Mouse and Donald Duck standing in a Paris job center may sound like a comedy sketch, but it could turn out to be a harsh reality if Euro Disney can't reverse its downward financial spin.

All is far from magical at Disneyland Paris. Euro Disney, the debt-burdened operator of the theme park, announced on Thursday that unless creditors can be persuaded to give the ailing enterprise more breathing space after the end of May, Mickey, Pluto and Goofy could be looking for alternative employment come June.

The group's chief executive, André Lacroix, delivered the bad news that Euro Disney would be unable to meet its financial obligations if it failed to agree a new restructuring strategy with lenders and shareholders.

The group has revealed that it has sufficient liquidity until May 31, but after that the future looked increasingly uncertain. "If up to the end of this time no solution has been found, the group would not be able to fulfill the totality of its financial obligations," Lacroix told a news conference.

The operator, which has debts of €2.43 billion ($2.87 billion), also announced that the Disneyland Paris theme park had increased its losses over the past six months from €82.7 million to €108.9 million, while sales were up 1.6 percent at €473.8 million. While financial charges associated with the groups debt accounted for €53.1 million of the losses, the resorts division epitomized the state of Disneyland Paris by posting a €56.3 million deficit.

Euro Disney has been feverishly negotiating with banks and Walt Disney, the entertainment and media group which has a 39 percent stake in the operating group, "to reach a mutually acceptable resolution to the company's financial situation." In an attempt to keep the park afloat, Walt Disney has deferred payments of royalties until 2005 and waived certain rights to ease the pressure.

Royalty costs and management fees jumped from €8.1 million to €25.5 million in the six month period ending March 31, but Walt Disney is not expecting payment from Euro Disney until the first quarter of the next financial year.

Lacroix told reporters that Euro Disney would continue to concentrate on sales growth and marketing efforts in its core businesses in an attempt to turn the deficit around. "At the same time, we must reach an agreement with our stakeholders to resolve our financial situation."

Disneyland Paris has been plagued by problems since it opened on April 12, 1992 at a cost of 22 billion French francs (€3.3 billion). On the inaugural day, an expected crowd of 500,000 visitors failed to materialize. In fact, barely 50,000 people were admitted. This was blamed on widespread protests throughout France as people feared their culture would be damaged by one of the most powerful and popular symbols of America. During the live opening television broadcast, a major electricity circuit was cut and signposts showing the way to the park's Marne-La-Vallee location were damaged.

The problems continued throughout its first year, with up to 3,000 employees quitting in May 1992 over pay and working conditions. Attendances also remained below expectations with visitors on sunny weekend days totalling between 20,000 and 25,000, much lower than the predicted 60,000 announced before the park opened. Anti-Disney feelings continued to be expressed by stay-away locals. Only three out of 10 visitors at the time were French.

By the end of 1992, Disneyland Paris had attracted around 2 million visitors less than originally projected. At the same time, the European recession was causing a property slump which pushed Euro Disney over the precipice into its first bout of serious financial difficulty. High interest payments on its massive start-up loans further exacerbated the problems, and the cheap dollar rate meant that many tourists found it cheaper to fly to Florida for their holidays and visit the flagship Disney World resort there.

Further blame was placed on overstaffing and over-capacity at the Euro Disney hotels, since visitors could do the park in one day and few found the need to stay on site. Souvenir and food prices were also accused of being prohibitively high, meaning that visitors weren't spending enough money while inside the park. Original estimates had visitors spending around $33 per day at 1992 rates but analysts at the time suggested spending per person was only 12 percent of that.

The resort and theme park limped through the remainder of the 1990s shrouded by persistent rumors that it would have to close due to massive losses. A number of crisis talks were held with the banks and backers towards the end of the decade as the problems increased.

In the end, a financial rescue package was announced including a massive injection of $500 million by a Saudi prince. The Disney Company also agreed to waive its royalty fees for the first time, the group announced a new share issue, and a number of banks offered Euro Disney better loan repayment schedules. Disneyland Paris entered the 21st century in pretty much the same fragile state as it had left the last.

Thursday's announcement suggested that over a decade of bailing out Euro Disney might ultimately fail to secure the future of Disneyland Paris.

This can't have been in Eisner's plan. We can hope that the big investors take note of this & request M. Eisner's resignation sooner rather than later.

Sarangel

 

[Michael623]

I just went to DLP on my honeymoon a couple of weeks ago and the fact that it is unprofitable could have something to do with the fact that the place blows. Or maybe I'm way off base.

 

[rwodonnell]

Never been there, so I can't speak to the quality of the place, but I always thought it was a strategical error to build it in France. Better off in Germany, Switzerland, Great Britain, heck almost anywhere else.

 

[dcentity2000]

No, not Great Britain. Why? One word: rain. OK, maybe two: perpetual rain. Even the ducks are standing under the trees

Anyway, I'd heard somewhere that Walt Disney has given the slap on the wrist to DLP saying that there will be no white knight sent to save: is this true?

I agree, Paris was the wrong place; I would have said Spain - warmer, less rain, more widespread language, less strikes. Yes, it's farther away, but what's an extra hour or 90 minutes in the air?



Rich::

 

[stemikger]

I never agreed with Euro Disney. I knew from the very beginning that Euro Disney could never work. I knew europeans would never get the concept. Disney is such a part of American pop culture that europeans could simply not relate.

Let's keep Disney All American.

 

[renknt]

Originally posted by dcentity2000

Anyway, I'd heard somewhere that Walt Disney has given the slap on the wrist to DLP saying that there will be no white knight sent to save: is this true?


Rich::

Walt Passed away on 15 Dec 1966

Euro Disneyland Opened 12 April 1992


I don’t think that Walt ever said any thing about DLP, if he is talking to you I am concerned for you, maybe you have been studying way too hard


Or may be you meant to say M.E. and just confused him with Walt in which case I think you have been at the scrumpy and studying too hard.

The above was meant in good fun please don’t be offended

Mike

 

[wilki32]

I agree with dcentity2000, not Great Britain way too cold and too wet, but stemikger what do you mean that europeans would never get the concept? Why can't we relate to this, I have grown up with Disney and at the age of 33 finally went to WDW with my family. We are going for the fourth time at the end of this year, now if we don't get the concept why are we going on a plane for 9 hours.

Lets face it, why doesn't DLP work

1. Weather, its cold and its too wet, leaving no guarantee of good weather.
2. Cost, it's too expensive, can get to florida for almost the same price.
3. Not enough alternatives, ie Seaworld, IoA, US etc
4. I know I'll get slammed but, from the experiences of others and myself, it's in France a country not renowned for its friendliness. Now I know that statement is sweeping but the park has not got the same 'feel' to it.

I agree with Rich that Spain would have been a much more suitable location and almost certainly more successful.

And finally, stemikger, keep Disney All American!!! Something I would fight against! You can keep your rounders (baseball), egg throwing (American football) and netball but you can't take Disney away. In fact aren't Walt Disneys family originally from France?

Anthony

 

[Planogirl]

I think that Spain would have been perfect. Europeans flock down there to begin with and the weather is nice.

As for Europeans not getting the concept, I don't agree with that. Only the French have trouble with such things.

 

[dcentity2000]

Originally posted by renknt
Walt Passed away on 15 Dec 1966

Euro Disneyland Opened 12 April 1992

I don’t think that Walt ever said any thing about DLP, if he is talking to you I am concerned for you, maybe you have been studying way too hard

Or may be you meant to say M.E. and just confused him with Walt in which case I think you have been at the scrumpy and studying too hard.

The above was meant in good fun please don’t be offended

Mike

heh heh! None taken!



Rich::

 

[ShadowWind]

While it's true Walt Disney wasn't alive then, he was adamantly against building a park in other countries to compete with those in America when he was alive. This was stated several times in various accounts of his life.

I have never been to DLP and probably will never get to go, whether or not they pull it out or not. I am fascinated by the updated attractions they have there, such as Phantom Manor from what I've read and seen. It seems to be the most original of the Magic Kingdom's. It would be a terrible shame if that were to end.

 

[paulh]

It was origanaly planed to go to spain the same place that the one in salou was built by universal when disney were planing the park the french government came up with more money to locate it outside paris.IMHO should have gone to spain as nicer weather no french and more friendler people.When it first oppenrd we were going to go but as we could go to WDW for 2 weeks for the price of going DLP for a week there was no contest and has never been any
Paulh

 

[flyinglizard]

Very interesting thread...

Did anyone else notice there are no comments from anyone in France?

 

[Planogirl]

I don't remember ever seeing anyone from France post on these boards. Not a surprise I guess.

 

[rwodonnell]

They do have the internet in France, right?

(Just kidding people...)

 

[dcentity2000]

Language barrier I guess?



Rich::

 

[richard3330]

Originally posted by stemikger
I never agreed with Euro Disney. I knew from the very beginning that Euro Disney could never work. I knew europeans would never get the concept. Disney is such a part of American pop culture that europeans could simply not relate.

Let's keep Disney All American.

Excuse me but a huge majority of WDW visitors are from the U.K. 'Europeans would never get the concept' - I don't think so. Disneyland Paris may be having a few 'troubles' but it still remains as one of Europe's most popular tourist attractions and I think it is very unfair and unjustified to say that European's can simply not relate to the Disney concept. JMO.

Richard.

 

[richard3330]

Originally posted by Michael623
I just went to DLP on my honeymoon a couple of weeks ago and the fact that it is unprofitable could have something to do with the fact that the place blows. Or maybe I'm way off base.

Disneyland Park at DLRP happens to be, in many peoples opinions, including my own, the finest example of a 'Magic Kingdom' on Earth. The attractions, being newer and more up-to-date offer a different experience to those in WDW, DC or Tokyo - for example Space Mountain, Pirates, Phantom Manor and BTMRR are much better than their counterparts. The whole Disneyland Park is basically a perfected version of the WDW Magic Kingdom.

The Disney Studios in Paris is a totally different story - cheaply built and lacking quality.

I don't mean to be negative against the comments posted, I just feel that they are unjustified.

Richard.

 

[Michael623]

Woah nelly, Much better? I was there last month and there was no single attraction that was much better than WDW or DL. Phantom manner is good just different than HM. Same with POTC, in fact I still think the DL version is the best. BTMRR is better I agree but much better? It is all opinion but to say much better is a bold statement. Combine that with fact that I didn't see a single smiling cast member and the weather was crappy and the Newport Bay was a dump filled with rude CMs... need I go on because I will?

 

[Scottish_Maleficent]

Bonjour!
Only been to DLP once, back in 1995. This was my first experience of a Disney theme park, and IMHO did not compare to WDW in Florida - mainly because of the rudeness of the CM's - who were mainly French and it didn't really have any atmosphere. It was very expensive too - I agree with Richard though, that the rides are newer and maybe even better, but I don't think I'd ever be tempted to go back.

Cath