15 years on, Euro Disney’s coffers ring hollow

Riding over a wave of Gallic outrage at the American cultural "invasion," the park opened its gates on April 12, 1992 and some 175 million visitors have since passed through them.

But it has also lost hundreds of millions of euros and small investors who paid 11 euros a share when Euro Disney went on the stock market in 1989 now have stock worth about 0.09 euros each.

The American groups, the banks who have helped finance giant restructuring have joined the little shareholders in deciding that there is no magic script for making money from the park.

"We have as many visitors every year as the Eiffel Tower and the Louvre put together," said Bertrand Schneiter, a delegate of an interministerial panel in the Euro Disney project.

The management says it is Europe's top tourist destination, highlighting the 12.8 million visitors, far outstripping the rival Parc Asterix theme park devoted to the diminutive Gallic cartoon hero and situated just north of Paris.

The socialist government in France in the late 1980s was generous with funds and help, dipping deeply into its pockets to cough up 650 million euros (873 million dollars).

"It was a stroke of genius," said an official associated with the project during its inception. "Disney negotiated to get a suburban commuter line extended to the park and managed to get a TGV high speed train link as well."

Private investment was 10 times higher than the French state's but despite the massive inflow of cash, Euro Disney was in the red for the first three years. In 1993 alone it lost more than 800 million euros.

Profits started to arrive in 1995 but a 2002 decision to open a second park dedicated to Walt Disney films — whose stars include Mickey Mouse, Sleeping Beauty and Bambi — plunged it into the red again.

The park lost more than 70 million euros in 2006, its fifth consecutive year of losses.

Disney employs about 12,000 people and generates at least 40,000 jobs in the region, according to government figures. But labour relations in the Magic Kingdom have been rocky. Union complaints of poor work conditions and strikes have been regular and some local residents mockingly say they live in "Disney-town".

The park has gone through six bosses and last year a Swiss-registered company, Center-Tainment, even launched the idea of a hostile takeover offer.

Luckily none of the bad publicity has deterred the visitors who come from across Europe. Walt Disney Co. now holds 39.8 percent stake and renowned Saudi investor Prince Alwaleed bin Talal owns 10 percent.

Euro Disney has been forced to restructure its finances twice since being launched and was facing insolvency as recently as February 2005.

Meanwhile two plans to salvage the company's fiscal woes have just managed to reduce its debt to 1.9 billion euros.

"Everyone wanted a share in the pie," one informed source told AFP. "Banks, the state — which wanted to attract investors — Walt Disney, which gets the royalties … but the biggest losers were the petty shareholders."

Euro Disney's financial director Ignace Lahoud admitted as much at the annual general meeting in February when he said: "There is a long way to go before we notch up profits."

Meanwhile, plans are afoot for another mega-project to set up a giant tourist complex near Euro Disney by 2010 which if it sees the light of day, will be the biggest project in the area since the theme park.


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