Euro Disney Earnings Bloodbath

[DLRP NEWS]

Did you ever think it is voluntary?
Oddly suddenly DLP starts to renovate everything and recover little by little with U.S. standards. Why in your opinion overnight we decided to renovate the entire park while the coffers are empty?
And if all this would be for a future redemption? TWDC has already bought the debt and could go little by little redeemed DLP!
These renovations are not in the means of DLP, so when the park will be bankrupt but renovated for TWDC bought a low cost and can immediately invest in attractions rather than in maintenance!

 

[lazyboy97o]

Did you ever think it is voluntary?
Oddly suddenly DLP starts to renovate everything and recover little by little with U.S. standards. Why in your opinion overnight we decided to renovate the entire park while the coffers are empty?
And if all this would be for a future redemption? TWDC has already bought the debt and could go little by little redeemed DLP!
These renovations are not in the means of DLP, so when the park will be bankrupt but renovated for TWDC bought a low cost and can immediately invest in attractions rather than in maintenance!

As of now The Walt Disney Company is still limited to only being a minority shareholder in Euro Disney SCA.

 

[pheneix]

Did you ever think it is voluntary?
Oddly suddenly DLP starts to renovate everything and recover little by little with U.S. standards. Why in your opinion overnight we decided to renovate the entire park while the coffers are empty?
And if all this would be for a future redemption? TWDC has already bought the debt and could go little by little redeemed DLP!
These renovations are not in the means of DLP, so when the park will be bankrupt but renovated for TWDC bought a low cost and can immediately invest in attractions rather than in maintenance!

It won't happen that way. French government will step in and prevent property of this magnitude from falling into American ownership.The French government rather see the resort close and get chopped up into condos than see Disney having full ownership of this resort and its physical property. This is a cold hard fact of life. Disneyland Paris has failed and now all thats left is the end game.

 

[lazyboy97o]

It won't happen that way. French government will step in and prevent property of this magnitude from falling into American ownership.The French government rather see the resort close and get chopped up into condos than see Disney having full ownership of this resort and its physical property. This is a cold hard fact of life. Disneyland Paris has failed and now all thats left is the end game.

Except that they do not have the resources to handle the operation or political support to take control (that is a lot of jobs immediately gone). The political and job climate is Disney's leverage in seeking a different ownership structure.

 

[|Q|]

It won't happen that way. French government will step in and prevent property of this magnitude from falling into American ownership.The French government rather see the resort close and get chopped up into condos than see Disney having full ownership of this resort and its physical property. This is a cold hard fact of life. Disneyland Paris has failed and now all thats left is the end game.

Except that they do not have the resources to handle the operation or political support to take control (that is a lot of jobs immediately gone). The political and job climate is Disney's leverage in seeking a different ownership structure.

I think it's in the best interest of both parties to save the resort. On one side, if Disney really planned to just let the resort die, they wouldn't have acquired the debt (1.3 billion euros is quite a big gamble), on the other side closing the resort would create a lot of new unemployed people in a time where all of Europe is struggling against rising unemployment (it also would likely be a big hit on the development of the Val d'Europe area), and I don't think that Hollande would be willing have this in his legacy.

 

[Ralphlaw]

Almosty sneakily, DLP has been building its own EPCOT city. In one of the most expensive real estate areas of Europe, DLP has been and is building a town for sixty thousand people, and a huge shopping mall. Five billion euros have been sunk into it. Which makes the 1.7 billion debt look like irrelevant pocket change. I think somebody understood that DLP received a huge plot of land through a favourable deal with the French government in the 80s, with excellent infrastructure, right in Europe's most dense and underserved urban area, and figured that you'd be mad to build golf courses and hotels instead of playing real estate developer.

As for the debt, the part owed to TWDC pays rent to TWDC. There is no reason for tWDC to get worked up about it. It is one subsidiary paying another. The major issue then is of clever fiscal construction.
.

I guess this is why I'm not tremendously worried. DLP is "losing" money while building up a huge asset. In America, due to the depreciation laws, few successful companies are seen as losing money. However, if the current cost of investments in land, buildings, and equipment were figured in during the actual years that the investments were made, many "profitable" companies would actually have negative income statements. Many of the richest people I know have very modest incomes, yet they are building up substantial assets that eat up their "incomes". DLP may be doing something similar.

Again, I don't see disaster on the horizon. "Who of you by worrying can add a single hour to your life?" Matthew 6:27.

 

[Bolna]

Seems like German media - well, at least in their English language version - picked up the story about DLP now:

http://www.spiegel.de/international...m-after-suicide-attempt-in-park-a-936440.html

One interesting comment below the article states that it is intentionally that the licensing fees paid by Euro Disney SCA to TWDC eat up the profits in order to avoid having to pay taxes in France. While I don't believe this to be truly the case, especially since there are other shareholders as well and it is not a wholly owned subsidiary, it still made me think....

 

[|Q|]

One interesting comment below the article states that it is intentionally that the licensing fees paid by Euro Disney SCA to TWDC eat up the profits in order to avoid having to pay taxes in France. While I don't believe this to be truly the case, especially since there are other shareholders as well and it is not a wholly owned subsidiary, it still made me think....

Actually, it makes more sense. Since the company is in the red, they don't give dividends (I'm kind of inventing the financial english i'm using, so i'm not really sure i'm writing the correct terms) to shareholders. So actually all the profit to be made is made by WDC.
But I remember to have read somewhere that WDC suspended collecting the royalty fees cause EDC was always in red (but I don't remember the source)

 

[Ralphlaw]

Yeah, if WDC makes a loan, the repayment is only income insofar as interest is being repaid. Meanwhile, a huge asset builds up out of a combination of "loans" while no income is being used to do it. If, for example, they earn $100,000,000, they pay a bunch of taxes, and probably have to shell out some dividends to shareholders. If instead, WDC floats a loan, that's not taxable as income. Makes good corporate sense.