Disney Offers to Increase Share of Hong Kong Disneyland Expansion Cost

Disney Offers to Increase Share of
Courtesy of Hong Kong Disneyland

Walt Disney is expected to increase its share of the cost of expanding Hong Kong Disneyland and to end up owning a larger stake in the theme park.

In documents submitted this week to Hong Kong’s legislature (Legco), Disney has agreed to an equal split of the $1.41 billion (HK$10.9 billion) expansion and upgrade of the park, though it currently owns only 47% of the facility. The proposal reduces the burden for the Hong Kong government by some $45.2 million (HK$350 million).

Disney will also waive variable management fees for two financial years. In return, the government’s ownership stake will fall from 53% to 52%, while Disney’s will increase from 47% to 48%.

The moves come after disquiet on the part of lawmakers that the park is getting deeper in the red and that the city is getting a bad deal. Legco is expected to discuss the proposals in a session on Saturday.

Disney will continue to earn fixed management fees, and it rejected calls by the government to adjust the formula by which they are calculated. In its October-to-September financial year, Hong Kong Disneyland lost $22.1 million (HK$171 million).

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