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Report: Disney considering full takeover of Disneyland ParisSubmitted by Nick Sim on Monday, August 27, 2012 09:09
A new report claims that the Walt Disney Company is considering a full buyout of the Disneyland Resort Paris, a move that could radically transform the fortunes of the European attraction.
According to sources that spoke to Time Magazine, discussions have been ongoing for some time within Disney about acquiring the 60 percent of Disneyland Paris' parent company, EuroDisney S.C.A., that it does not already own. This would enable it to invest more heavily in improving the resort's performance and increasing its profits.
Disneyland Paris has long been the "black sheep" in Disney's global theme park empire. Walt Disney World, the Disneyland Resort and the Tokyo Disney Resort have all performed solidly despite difficult macro-economic conditions, and Hong Kong Disneyland has begun to increase attendance after a weak first few years in operations. However, the French resort has been consistently weighed down by its huge debt burden.
In May, Disneyland Paris reported a fall in attendance at its theme parks during the first half of its financial year. The number of visitors to Disneyland Paris and Walt Disney Studios fell by 1.5 percent when compared to the same period a year earlier, to 6.9 million. There was a larger drop in hotel occupancy, which fell by 3.6 percent to 79.8 percent. Overall, this resulted in a net loss of €100.8 million, some €21 million higher than the loss last year.
EuroDisney S.C.A. still has an enormous debt mountain of close to €1.8 billion, and is obliged to meet objectives set by its lenders. If it fails to do this, it will be forced to cut costs or seek further investment from the Walt Disney Company.
Disney has already loaned EuroDisney S.C.A. €150 million, which will be used to install a new dark based on Pixar's Ratatouille at Walt Disney Studios. The resort is planning further investment in the park, which currently suffers from a lack of attractions and restaurants when compared to neighbouring Disneyland Paris.
The company has made no comment on Time's report to date.