Goofyernmost
Well-Known Member
As correct as that all probably is, the fact that it was what it was back then, did not prevent DL from becoming hugely successful. That implies that it really was not an issue back then as it shouldn't be now. If Disney, or any company for that matter, can make money by leasing out space to outside vendors and are losing money by trying to create themed stores that do not represent much more then overhead, why would we expect them to do it.Walt Disney always intended the shops at Disneyland (DL) to be entertainment but was severely limited by money when he first opened DL.
Walt Disney went deeply into debt to fund DL. If DL had been a failure, it would have sunk the company and Walt.
Walt Disney Productions (WDP) was a small company until the mid-1950s. At the beginning of that decade, gross annual income was about $6M. After the opening of DL, it jumped to $27M. By the end of the decade, it was up to $70M. That still made WDP a relatively small company with great brand name recognition. As examples, WDP made $3.4M in the 1958-59 fiscal year but lost $1.3M the year after. In Walt's last full fiscal year (1965-66), company profits were up to $12M.
In order to fund DL, the Disney brothers had to sell off much of DL's ownership. For $500K cash and a guaranteed loan for another $4.5M, they sold 34% interest in DL to ABC. Another 13.8% went to Western Printing and Lithographing for $200K. Walt himself purchased 17.5% ownership for $250K. Bank of America funded most of DL with an $11M loan.
At the time, Bank of America was nervous about that loan amount, believing the company would not survive if DL failed. Walt reportedly was about $100K in debt until DL's success, at which point his personal worth quickly recovered. DL was a huge financial risk and it took several years to pay off the original loans.
Eventually, WDP bought back 100% ownership of DL (using more loans to do it), including purchasing Walt's share and buyouts of all the concessionaires in DL. Walt resented having to pay ABC $7.5M to buy back their interest in DL, Walt feeling ABC hadn't done anything to deserve it. Regardless of what Walt felt, they couldn't have pulled off the deal without ABC's backing.
The simple truth is that Walt Disney had to fund DL with sponsorships. As he bought out those sponsorships at DL, he replaced them with concessions he felt were more appropriate to his vision of DL, even if they were not big money makers. He continued to use sponsorships where he thought they were appropriate but placed onerous conditions on them regarding what they could sell and how the stores had to be themed.
Today's The Walt Disney Company (TWDC) has no such excuse. TWDC is richer than most of the corporations it seeks sponsorships from. Today's TWDC is all about maximizing profits, regardless of what it means for the theme parks.
Having a store that sells PoTC merchandise, for example, does nothing to change my enjoyment of the ride and as often as I have been forced to walk through that store, have never found myself either stopping to look at the merchandise or certainly not buying any of it. It is meaningless, other then a minor annoyance to me, to the overall experience I am looking for in the park. I know some like them and spend money in them, but, they are not the attraction and should never be considered one, in my opinion. In fact, the idea that so many rides end in a gift shop has been a source of laughter for many years. In my mind it wasn't laughing with, it was laughing at.