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Financial Status of Euro Disney SCA, France

This research analyzes the financial status of Euro Disney SCA, France. This analysis focuses on (1) initial financing arrangements, (2) problems besetting the venture, (3) potential solutions to these problems, (4) the role of the Walt Disney Company in Euro Disney, and (5) European/American investment roles in the venture.

Euro Disney is a US$3.7 billion theme park located outside of Paris (Reina, 1992, pp. 31-32). The entertainment enterprise was patterned after the Walt Disney Company's successful theme parks in the United States. The Walt Disney Company assumed a 49 percent ownership stake in Euro Disney, while the remaining 51 percent of the ownership is held publicly through common stock (Toy and Dwyer, 1994, p. 52).

The Walt Disney Company paid US$160 million into Euro Disney SCA for its 49 percent equity share of the venture (Toy and Dwyer, 1994, p. 52). The public stock offering raised US$167 million. A consortium of 60 banks lent Euro Disney US$3.4 billion to complete the theme park.

One of the major problems for Euro Disney was the assumption by The Walt Disney Company and other investors that American popular culture could simply be transported lock, stock, and barrel to France with non diminution of public interest and support (Toy, March 1992, p. 32). From the very beginning, the French public threw cold water on this presumption (Toy, August 1992, p. 38).

A second major problem from the very beginning of the Euro Disney venture was an assumption that the major task was the construction of the facilities on time and within budget, and that the Disney reputation would take care of marketing (Creating, 1992, p. 91). The construction goals were attained. The marketing and profitability goals remain out of reach (Swort, 1994, p. 1751).

Low attendance levels that were well below the projected breakeven point have characterized the operation of Euro Disney since the theme...

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Financial Status of Euro Disney SCA, France. (1969, December 31). In LotsofEssays.com. Retrieved 16:09, March 28, 2024, from https://www.lotsofessays.com/viewpaper/1692463.html