Eisner addresses Euro Disney move

Walt Disney Co. chief exec Michael Eisner said the company might renegotiate certain portions of its agreement with its 49%-owned Euro Disney SCA, the theme park/resort complex outside Paris.

At present, the agreement calls for certain revenues and operating profits to return to Disney, increasing over time as revenues advance.

Some critics have described the terms as overly generous to Disney — an element that’s received attention lately with the recent drop in Euro Disney’s stock.

Fees intact

A company spokesman in Burbank said Eisner’s statements, contained in an interview with the Financial Times of London, were meant to communicate the company’s “commitment to do everything to make the park work.” He said the existing management fees and royalties would remain intact, but if the company decides to alter the agreement it would make an announcement to that effect.

Disney’s investment of $ 132 million was supposed to have produced annualized cash returns of $ 650 million to $ 750 million by 1997.

Euro Disney has said previously it did not expect to turn a profit in its first year of operation. The company completed its first year in which the park was in operation Sept. 30. Results will be released in late November.

Attendance at the park, which opened in April, has been fairly close to projections, but early disappointment has fueled a perception that Euro Disney is not doing well. Early on, there was a shortage of visitors from France. The park decided to close one of six hotels for the winter months and it has cut prices. Those factors–reported extensively in the press–has hurt the Euro Disney stock.

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