Disney Sets $1.25 Billion Bailout Plan for Disneyland Paris

Disney Sets $1.25 Billion Bailout Plan
Pierre Suu/Getty Images

Disney has unveiled a $1.25 billion bailout plan for Disneyland Paris as the park struggles with an attendance slump and a high debt ratio.

Disney confirmed late Sunday that it has set a €1 billion recapitalization plan for the park that has had a rocky performance history since it opened in 1992.

“This recapitalization plan would improve Euro Disney Group’s financial position and enable it to continue investing in the guest experience,” Disney said in a statement. “With this effort, we are demonstrating the Walt Disney Co.’s continued confidence in Disneyland Paris, which remains the number-one tourist destination in Europe.”

The plan calls for Disney to deliver a $526 million cash infusion and convert $750 million in debt to equity. Disney will also defer payment from Disneyland Paris of certain loans until 2024. The recapitalization plan will hack its debt ratio down to six times annual cash flow, compared to 15 times cash flow at present.

SEE ALSO: Significant ‘Star Wars’ Presence Planned for Disney Theme Parks

At present Disney owns 40% of Disneyland Paris. Saudi Prince Alwaleed owns 10% while the remainder is publicly held and traded on the Paris Euronext exchange.

Attendance at the park reached about 14.1 million-14.2 million visitors during the September 2013-September 2014 fiscal period, down 700,000-800,000 from the year-ago frame. Its room occupancy rate is projected to drop from 79.3% in the 2013 period to 75%-76%.

There have been persistent rumors that Disney intends to eventually buy up all the equity in Disneyland Paris and take it private.

Disneyland Paris just saw a management shuffle in August as Phillippe Gas, who headed the park for six years, was tapped to oversee the launch of the Shanghai Disney Resort. Tom Wolber, a Disney parks vet who helped launch the Paris park in 1992, was elevated to prexy of Euro Disney.

“The ongoing economic challenges in Europe and our debt burden have significantly decreased operating revenues and liquidity,” said Wolber in a statement. “This proposal to recapitalize the Euro Disney Group is essential to improve our financial health and enable us to continue making investments in the Resort that enhance the guest experience.”

The bailout effort for Disneyland Paris comes as Tom Staggs, chairman of Walt Disney Parks and Resorts, has emerged as a front-runner to be named Disney chief operating officer under CEO Robert Iger next year.  The launch of the Shanghai park and the stabilization of Disneyland Paris are seen as key tests for Staggs on the path to possibly taking the CEO reins from Iger, who last week extended his contract as Mouse House chairman-CEO to 2018.

(Pictured: Robert Iger and Tom Staggs at the opening of Disneyland Paris’ “Ratatouille” attraction in June)

 

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  1. should have been built in london

  2. Zante says:

    I was in Paris Disney last month. Being an avid Disneyphile, I was excited to be going there. It was a sad disappointment. The park was nearly empty, and it was a pale image of the Magic Kingdom at WDW. Frontierland had three attractions, Phantom Manor (Haunted Mansion), Big Thunder Mountain, and a riverboat ride. Half of the restaurants were closed, and the one we chose (Mr. Toad’s Hall) had the worst food. We got fish and chips, and the fish was overcooked and dry. There was hardly enough to keep us occupied for the 8 hours we were there, but since we had taken a bus from Paris, we were stuck. The Disney Village was a total joke. I should have known by how poorly their website was put together. The Disney Corporation needs to take a strong hand in this incarnation of the theme park. As far as it being the #1 attraction, all I can say is that Versailles and the Eiffel Tower were packed, and Paris Disney was nearly empty.

  3. malibujd44 says:

    I don’t get how the number one tourist detestation in Europe (I really can’t believe that) can be losing money when they charge a damn fortune for EVERYTHING!!!! It sure is not the first or 20th or 100th place on my list I want to see when I go to Europe. I do agree that it was built in the absolute wrong place. Germany, Switzerland, Lichtenstein would have been cool and Italy would have been the best place where people are more friendly and love to be kids…the French … the French…are so…so…so
    and to French. They seem to care less about anything.

  4. Darren says:

    Good. Maybe if Disney would lower its price of admission, More people could afford to go. I hope we can dash Disney dream, Just as they dash ours of any hope of going because of the price.

  5. Callum says:

    I visited in 2011 and 2013 and literally nothing had changed over those two years. No mention of Wreck-It Ralph, Brave or any new Disney products. DLP’s biggest problem imo is that it needs to refresh itself and keep itself current, whilst also getting rid of A LOT of dated attractions.

  6. Bob C. says:

    My Italian friends predicted this as far back as 1995, because the French are “too sophisticated” for animated mice and princesses. Italians LOVE Disney and the park should have opened near one of their big cities (Rome, Florence, Milan, Venice) and there would be no need for bailouts for Euro Disneyland. I wasn’t sure back then but now I must agree 100%.

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