Disney kept trying to put the genie back in the bottle late last week, insisting that “no deal had been signed, no project has been approved.” But once WSJ.com posted that piece last Thursday night about how The Walt Disney Company and the Shanghai Government were moving forward with their theme park deal,” the cat (or should I say mouse?) was out of the bag.
Of course, JHM readers have known for a while now that this announcement was imminent. Given the story that this website ran back in July which revealed that — after the 2008 Olympics were over and Beijing was still basking in the glow of having successfully pulled off this world-class event — Disney & government officials would then announce this long-in-gestation project.
That was the initial plan. An official announcement in late September. But September — as it turns out — was the month that the credit crunch reached critical mass. Which then didn’t seem to be the brightest time for Disney to be announcing its plans to build a multi-billion dollar complex in a rural section of China. Which is why this announcement was then pushed back until after the first of the year.
Now as for the news that was leaked to the Wall Street Journal late last week … Since we’re still in the early, early phases of the approval process (What was signed last week wasn’t actually a contract but — rather — a project application report. Which is this nonbinding agreement that outlines the many ways that the Shanghai district could benefit should construction of this proposed theme park, hotel & shopping center be allowed to go forward), it doesn’t make sense to get into specifics about Shanghai Disneyland just yet. Other than to say that those familiar with the design work that WDI has already done on SDL suggest that this all-new version of the Magic Kingdom will be the largest ever (in sheer land size, anyway). More importantly, that the park itself will feature several noticable departures from the look & layout that one normally associates with a Disneyland-type theme park.
But beyond that … The real news here are the financial terms that were outlined in this 60+ page document. Which has Mickey taking a 43% equity stake in this $3.59 billion project, while a holding company owned by the local government would get 57%.
In honor of this new project, Shanghai Disney-fies its tallest structure. (Just kidding)
Do those numbers sound familiar? They should. Given that — back in 1999 — The Walt Disney Company cut an almost identical deal with Hong Kong officials. When the Mouse got a 43 % equity stake in that $3.55 billion project, while the local government got 57 %.
Given that Hong Kong Disneyland has continually struggled to meet attendance projections since its September 2005 opening, it had always been assumed that Shanghai officials would use this information to their advantage. Work out far more favorable terms with Disney Company execs, who were downright eager to get a theme park built on the mainland.
But then last September, Wall Street spun in and took the world’s economy along with it. Which the Mouse then used to its advantage, citing the 50,000 new jobs that would be created in the Shanghai district should construction of this new Disneyland Resort be allowed to go forward.
“Disney played their hand incredibly well,” said one official familiar with these negotiations. “Given the current economic climate and the Chinese government’s concerns about employment growth, Disney officials was able to cut a deal very similar to the one they got in Hong Kong. Everyone back in Burbank is very pleased with the preliminary terms.”
Mind you, it’ll be months ’til we know if this project is actually going forward. Shanghai Disneyland’s joint application report now has to make its way through multiple layers of Chinese bureaucracy before final approval is given and formal contracts can then be signed. But once that’s done … The first phase of construction (Which will involve clearing a 1.5 square kilometer area near Pudong International Airport) could begin. And if all goes according to plan, this new Disney theme park could be open for business as early as 2014.
What’s that you say? You want a hint of what Shanghai Disneyland will look like? Well … Though these plans will most likely change in the coming months, Main Street U.S.A., Tomorrowland and Frontierland are the parts of this proposed theme park that will most likely be reimagined. Taking into consideration The Walt Disney Company’s main objective for this mainland China project (i.e. get the country’s 290 million consumers under the age of 14 to really connect with the Disney / Pixar characters), you should expect SDL to have a far toonier take on America’s past & future.
Your thoughts?