Euro Disney

Euro Disney

From Dream to Nightmare

In what ways did Disney adapt to a French and European context? How effective was this adaptation? Should Disney have adapted more or less?

Typical vacation photo

Most common breakfast

France

USA

France

Euro Disney's financial/ management structure

Most common pose in a Google photo search for “French/American vacation photos”

Most common meal in a Google photo search for “French/American breakfast”

Typical snack

Most common dinner

Financial Viability

In Paris

In Tokyo

In the U.S

USA

France

USA

Typical fashion

• Disney was nervous about the unknown
• Pure licensing agreement
• Received royalties from admissions, etc.

• Disney wanted undiluted control over the revenue stream

• U.S. is 100% ownership

• Disney understood the environment

Recommendations

Most common meal in a Google photo search for “French/American snacks”

Most common meal in a Google photo search for “French/American dinner”

USA

France

Euro Disneyland SCA – Build and own the park

Disney 49% ownship, 51% IPO

Euro Disnelyand SA – management company

3% of total revenue (6% after 5 yrs)

Incentives: up to 50% of net profits.

All expenses paid

EDL Holding – assumed all liability for .5% net profits.

Euro Disneyland SNC –leases facilities to ED SCA.

Managed by subsidiary and assumed full debt liability

License agreement – 5-10% to Walt Disney Company

Structure:

Consolidate ownership and management

Operations:

Lower prices: admission and hotels

Renegotiate labor contracts to allow for seasonal closure

Defer phase two development

Future of Disney

Protect and Further

Disney

• Continued growth domestically
• Continued growth internationally
• Diversification

• Get the right people
• Target the right segment
• Customized culturally

Most common colors in a Google photo search for “French/American fashion show”

Restructure

Disney waives management fees and royalties

Disney cancels receivable and reduces lease.

Disney sells 10% ownership in Euro Disney to Prince Alwaleed Bin Talal Bin Abdulaziz Al Saud.

Disney’s ownership is reduced to 39%

Disney World

Adaptations to the European culture

European heritage

Why an International Amusement Park?

France

USA

Cinderella lives in a French inn

Snow-white’s home in a Bavarian village

Discovery Land

Alice in wonderland, 5000 sq ft hedge

maze

European heritage

European social behavior

New American themes

Human relations management

Most common theme in a Google photo search for “Disney World France/Florida”

European social behavior

• Tokyo’s Success and Enthusiasm
• $573,000,000 in royalty income from Tokyo
• 2 million visitors each year from Europe

Michael Eisner- How Disney's interests can be protected and furthered?

• Aversion to queuing
• Disney's no alcohol policy
• Sit down dinning
• Higher quality in hotels as well as restaurants

Why Paris?

Planning & Development: 4 Criteria

Close to a large population + disposable income

Qualified labor and a local tourist draw

Sufficient land + expansion capabilities

Proper infrastructure (water + electricity)

Better Infrastructure vs. Barcelona

Strong backing from the French government

10 million lived in the greater Paris area

European vs. US vacation time

Paris attracted vast amounts of tourism

New American themes

Effective!

Human relations management

Wild west theme

The US Human recourse management practices

Above average height and below average weight

Pleasant appearance

Conservative grooming

Very modest make-up

Specific colors

Euro Disney S.C.A. Annual Report

Thank you!