The Disneyland Paris amusement park, located in Marne-la-Vallée, about 30 kilometers east of Paris, opened on April 12, 1992, almost twenty-five years ago: over the years it has been visited by 320 million people and is estimated to have created 56 thousand jobs in France. Almost 8 billion euros have been invested over time in the park or facilities that were built around it, namely The Walt Disney Studios Park, a second smaller amusement park, a golf course, convention centers and a series of hotels with 8,500 rooms in total. An article from The Economist explains that the economic situation of the park is not very simple, for some time already: the park has a lot of debts and Disney is trying to buy back the company that controls the park almost entirely, for reasons not entirely clear.
Disneyland Paris is the second amusement park built by Disney outside the United States, after Tokyo in 1983. When construction began in the late Eighties, the project was highly criticized by the French trade unions and a piece of public opinion: it was said to be” an americanate “and not respecting French culture, to the point that it was called a”cultural Chernobyl". For the opening of the park there were 500 thousand visitors but only 25 thousand showed up. Then things got better, especially after the park's name changed from Euro Disney to Disneyland Paris in 1994.
The situation worsened with the global economic crisis that began in 2008. The company that manages the park reported losses of more than 212 million euros. The value of the shares plummeted by 50 per cent – each around four euros-while debts rose to 1.9 billion euros. It is since 2008 that the company that owns the park is in a loss and the number of visitors continues to decrease: in 2016 were 13 million, about one or two million in less than those who visited the park ten years ago, and the people who continue to do so spend less, although they have opened new restaurants. The park crisis of recent years is thought to be due, in addition to the economic crisis, to fear of terrorist attacks.
In 1989, the company Euro Disney was listed on the stock exchange at the behest of the then French President François Mitterrand. The share price of Euro Disney has always fallen since 1992, when it was equal to 221 euros per single share, to date, which is about equal to 2 euros. Disney has repeatedly contributed capital increases to prevent the company from going bankrupt: in 1989 the American company owned 49 percent of Disney Euros, now about 86 percent after recently buying 9 percent from Saudi Prince Alwaleed bin Talal's Kingdom Holding, which was the largest of minority shareholders, and another percentage from smaller shareholders. Disney's intention is to control more and more Disney euros and to recapitalize the company up to 1.5 billion euros to repay part of its debt and strengthen its position on the market.
A Euro Disney executive who spoke to The Economist asking to remain anonymous said that perhaps smaller shareholders will not be happy to sell their shares, given the low price.
The Economist also spoke to Anne-Sophie D'andlau, the vice-president of the French activist investment fund CIAM, which has held 1.4 percent of Euro Disney shares since 2015. The directors of CIAM believe that the value of their shares in Euro Disney is underestimated, decided not to sell them and asked an investigating judge to investigate whether the value of the shares was correctly assessed by Disney.
The reason why according to CIAM the value of the shares is underestimated is that Euro Disney owns the preemptive rights to build on 22 square kilometers of commercial land around the park until 2035; these rights also provide a particularly advantageous purchase price, 1.69 euros per square meter. An expert hired by CIAM estimated the value of these Disney euro rights at 1.9 billion euros, that is, a much greater value than that of the company on the market. CIAM is also critical of Disney for another reason: he thinks that the big American company has charged Euro Disney an excess of royalties to use the Disney brand over the years and that this is one of the causes of the low profits of the Disneyland Paris Company. According to CIAM, Disney is expected to repay Disney Euros with almost a billion euros. Euro Disney spokesman Francois Banon told The Economist that CIAM's allegations are "false and unfounded", that his estimates "greatly exaggerate the value of commercial land rights" and that royalties amount to 6 percent or less of the amusement park's profits.