Disney may take control of Disneyland Park About This Page:

[chezp]

It's being reported across the media over here this morning that Disney may be looking to take complete control of Disneyland Paris.

If this happens, it will be interesting to see what happens next. As the article says, although it's Europe's most popular attraction, it's just never made money since day one and sadly, I can see why with the prices they charge for the on-site hotels. That's one reason why we don't go more often.

[Tigger71]

Whatever it takes to make it run more efficiently will ultimately make it better for shareholders AND guests!

I sure hope they can have some issues fixed by next July

[Disneybine]

That would be the best thing that could happen to DLP, IMO. The article is very interesting, albeit not 100% accurate (Disney did add new rides after 2006, just at the Walt Disney Studios Park, not the Disneyland Park itself).

I'll keep my fingers and toes crossed that Disney really goes through with this. Anything to improve DLP!!!

[num1DVCfan]

I hope it works out. One of my undergrad classes in college actually did a study on how much money was lost in DLP after it opened. I hate to see anything with a Disney name on it go down hill.

[Silvercat]

Yeah, I'm a shareholder and would like to see lots more Disney control, too. The CMs there quite often leave a lot to be desired, and the whole place is rather tatty and in need of a good spruce-up/repaint etc. Go Disney - grab back some control please!

[disneyparis]

Although the main park there is my favorite- because of the size and beauty of it- the Paris parks leave a lot to be desired in the way of customer service in the Disney fashion and the resorts are a little ratty and not up to anywhere near the standard of WDW. Disney missed the boat when the park opened because they didn't understand the psyche of the European- especially the French- vacationer and day tripper. The training of the Cast Members is much different and the result has been slipshod service,lack of attention to detail and just plain rudeness. I hope that Disney will take over and correct the problems in a way that will work for everyone.

[Dave Marx]

According to the articles I've seen, average hotel occupancy is 87%, which is quite good considering the situation in Europe, and attendance is very strong - it's Europe's biggest attraction. In 2010 they got permission from the French government to build a third park (50% of the property is still undeveloped), which is not the kind of move one makes when the future looks grim.

What all this really comes down to is debt load. DLP was very expensive to build, and the money was mostly borrowed, and not cheaply. There's currently around €1.7 billion ($2.12 billion) remaining in long-term debt (though €125 million of that is owed to the Walt Disney Company). Meantime, the value of the stock is very low. Current market value of the publicly traded shares (that's the part not already owned by Disney) is about €230 million ($288 million). Essentially, the debt burden and the business relationship with Disney (Disney owns 40% and gets paid or is owed substantial sums for running the show and the use of its valuable copyrights, trademarks, characters, Imagineering, etc.) pretty much guarantee that outsiders won't bid against Disney.

But the numbers work very differently with Disney as sole owner. Even if Disney offered 20% - 50% more than that €230 million, it's a steal. It cost Disney around $800 million (€639 million) to build each of the new cruise ships, and they spent $1.4 billion on the DCA remake. The total cost of DLP, when combining cash outlay and assumed debt, would be a bit more than €2 billion, and the cash portion of the deal is, what, 12-15%? Not much of a down payment!

As a free-standing business, Euro Disney's financial statement shows interest expense on that long-term debt very clearly - it's the reason the business does not show a net profit. As a conglomerate, The Walt Disney Company's financial reports lump all long-term interest expenses together as a single corporate expense. The operating units (Parks and Resorts, Filmed Entertainment, etc.) report operating profits, not net profits. Relieved of the appearance of a debt burden (€75.4 million in interest in 2011) and of the fees paid (or owed) to The Walt Disney Company (€109 million in 2011), DLP will look profitable right from day one. Meantime, the Walt Disney Company's financial strength means the assumed debt will have very little impact on the corporate bottom line - the company paid off something like $1.4 billion in long-term debt in 2011 alone.

Now, a lot of this comes out in the wash - the actual impact of the transaction on the corporate bottom line will be small. But... If DLP no longer looks like a loser, that will probably have a positive impact on investment analysts' opinions and Disney's stock price. The two darkest marks on Parks and Resort's reputation have been DLP and Disney California Adventure. DCA has already been rehabilitated. DLP may not be far behind.

[Disneybine]

That's all well and good but unless Disney actually makes improvements to the parks, it won't change a darn thing for visitors. From what you describe, Dave (thanks for the detailed analysis, by the way ), it's all about making the figures look good for Disney. The question that remains, however, is if Disney is willing to spend extra money to train the CMs better, for example. I'll keep my fingers crossed that they are...

[Dave Marx]

I wish I could be optimistic about Disney managing to change CM attitude. They're running the show now, they'd still be running the show. Unless something about the current ownership structure has prevented greater investment in CM training (I'm not sure how, considering how much power Disney has in all other things)... Otherwise, it's like the Who sang, "Meet the new boss, same as the old boss."

But I also wonder whether Europeans who have not experienced the U.S. parks perceive customer service to be a problem. I don't have an answer to that one, and that may be what matters more.

[chezp]

Originally Posted by Dave Marx

But I also wonder whether Europeans who have not experienced the U.S. parks perceive customer service to be a problem. I don't have an answer to that one, and that may be what matters more.

It's an interesting question. We speak to a lot of people who've only been to Disneyland Paris and they seem to enjoy it well enough, but they always say to us if they then go to the American parks that those are so much better. However, having said that, I have heard quite a few comments from people who've only been to Disneyland Paris saying that they found the staff "quite grumpy". That does tend to be put down to the fact that they're French by those who say it - as I'm sure you're only too well aware, us Brits do have a love-hate relationship...

[Disneybine]

Of the people I know here in Germany who have been to Disneyland Paris, none have been to the American parks. Most of them see going to DLP as a one time thing, and they usually go when their kids are in elementary school or so.

Since they can't compare DLP to the parks in the U.S., they don't talk about a "lack of magic" or something of that sort. They do, however, notice that CMs aren't always particularly helpful. More than that, though, they comment on the rudeness of fellow park visitors. Unfortunately, there's a lot of cutting in line, smoking (outside of designated areas), even drinking going on and I'm not sure how much Disney can do about that. I'm afraid it really is a cultural problem, as I've noticed similar behavior in amusement parks all over Europe.

[Ashli]

I must have been at DLP during a really great time, because I didn't even one time come across any less than Disney-like CMs when I was there. I was actually concerned I would, and on the look out for it, but was very pleasantly surprised that they were so nice and helpful. (Actually some were more so than the CMs here...there many of them were very excited when they learned we were American, asking if we'd been to WDW, and saying how they wished/couldn't wait to go there sometime themselves.) I also didn't have any issues with people cutting in line....it wasn't remotely as bad as Disneyland in CA, where I've experienced the worst line cutting I've ever seen - all the outdoor queues really cater to that kind of thing. The smoking outside of designated areas was something I noticed at DLP, but I think Disney owned or not, they are going to have a hard time breaking that because the French seem to feel entitled to smoke anywhere, any time, any place, etc etc etc. Overall, I was personally more impressed with DLP than DLCA (both parks) as far as theming and just general "magic" go. Of course, I agree that the resorts aren't quite up to Disney snuff and there could be improvements there greatly.

[nanajoyx2]

DH and I spent one day at Disneyland Paris last July. We thought it was a beautiful park but that was all that we liked about it. It was very crowded and CM's we're no where to be found for assistance. Thunder Mountain broke down after we were in line for over an hour, and no fast passes were offered for later to return when it might be fixed or to ride another attraction. We are returning to Paris next year, but will not return to Disneyland.

[Thomhazel]

I have to confess that disneyland Paris is my least favorite park for that very reason. It is not as clean as the parks in the US the toilets can frankly be awful. the customer service has gone very much downhill since it opened. When it was brand new i remember going with my daughter and she reentered the park with the balloon we had bought the day before which was a bit deflated. They replaced it with a new one. You don't see that now. Also annoying that the ticket booths close early in the afternoon so if you dont have tickets you often can't go after 3pm.