Mickey saves the European Disneyland

Disneyland Paris is in trouble again. Located near Paris, the magical park has been losing money every year since the gates swung open. There’s been a wide range of worldwide competition, which has made the Parisian version of Disney’s wonderland suffer. But even compared to its competitors, Disneyland’s debt ratio has been off the charts. Its debt is calculated around 1.75 billion euros. The company needs at least 15 million visitors a year to make profit. It has had difficulties reaching that expectation and last year the number of visitors dropped to 14 million.

Disneyland Paris is indeed the number one tourist destination in Europe when it comes to entertainment. Disneyland’s had a habit of launching a new major attraction in the park every year on its birthday. One of which can cost over 100 millions in euros.
The only perk in the location is that it’s relatively close to Paris, the international tourist destination. Other than that the French haven’t taken in the park and there’s been a few protests in the past. Also the fact that many European economies are all in recession and dealing with high unemployment rate – the people simply don’t have money to splurge on Disney.

The dark economic history reveals that the park was saved from bankruptcy relatively soon after its opening back in the early 90’s. This time around Walt Disney has come to its rescue. The Daddy Disney owns 40% of Disneyland Paris, which explains the adjusted arrangements done in the process of saving the life of the European member of the entertainment family. The Walt Disney Company has announced a bailout plan of 1 billion euros to rescue Disneyland Paris.

Viewing Euro Disneyland’s stock chart reveals a descending trend during the past six years. The highest peak was back in the beginning of year 2008 which accentuates the crash after it, due to the economic recession in 2008 and 2009. The stock value has been ascending a few times but it has never again reached the value of its culmination – almost 14 euros. After that its second highest point was in the beginning of 2011. Now, as Disneyland Paris announced the emergency rescue to be shortly received from Walt Disney, the stock went down to only a little above 3 euros.

Disneyland Paris remains to stay positive for its upcoming 25th birthday in 2017.

References:

http://www.bloomberg.com/news/2014-10-06/euro-disney-shares-drop-on-plan-to-raise-1-25-billion-in-funds.html

http://www.bloomberg.com/news/2014-10-08/disney-1-billion-euro-bailout-proves-paris-parks-too-big-to-fail.html

http://corporate.disneylandparis.com/about-our-company/the-narrative-of-numbers/index.xhtml

http://www.nasdaq.com/symbol/eudsf/interactive-chart#ixzz3FQoMsIE5

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