Mickey to the rescue of Disneyland Paris
Mickey is not Picsou. After much thought, Disney has decided to sign a very large check of €1bn bailout just to keep its head above water and to hold the gates open.
Become in twenty-two years Europe’s leading tourist destination, yet the park behind an abysmal debt, the result of complicated arrangements and managerial wanderings. Another plan for recapitalization and financial restructuring was announced on October 6.
Can it be both a commercial success and financial failure? Yes, it can. Since 1992, Euro Disney, the operator of both the amusement park and seven hotels in Disneyland Paris, managed to build the first tourist destination in Europe – 15 million annual visitors – with accumulated losses.
What is the purpose of the bailout?
The first objective is to strengthen the financial strength of EuroDisney and allow it to continue to invest in the park new attractions to attract visitors. Since opening in 1992, Disneyland has never made any money. Of the twenty-two years of activity, only nine have been beneficial. At the end of last year, in September, the group had a deficit of 1.8 billion euros.
Still, Disneyland remains the number one tourist destination in Europe. For specialists, the problem of Disneyland is its business model related to its debt and its upfront investments. The company can not make a lot of money because the maximum capacity of the park is limited, and prices can not increase indefinitely.