Tuesday, March 17, 2009

Will the Disney decision to put Hong Kong Disneyland expansion on hold have an effect on the Shanghaî Disneyland project ?

I knew about it since one week, but I was waiting for a more "official" confirmation, and here it is: Disney is putting Hong Kong Disneyland expansion on hold. Why? Well, according to the Reuters article - and confirmed by the company today - it's because they failed "to find an agreement with the city's government on a cash infusion".

More worrying, Disney said "it would fire about 30 Hong Kong-based employees dubbed "Imagineers" that had helped conceptualize and plan the expansion". "Some jobs might also go at Disney's home-turf of Burbank, California, as a result of the work stoppage" a source familiar with the situation told Reuters. The anonymous Reuters source added "Disney had already been funding creative efforts -- designing and envisioning the look of rides -- but decided to pull financing when it became clear that a deal with the government on expanding Disneyland was not imminent". Disney also said in a statement: "The uncertainty of the outcome requires us to immediately suspend all creative and design work on the project".

It's obviously a very hard move in direction of the Hong Kong city government - who expressed "grave concern" about Disney decision . You see, these negociations between Disney and the HK government didn't began some weeks ago. In fact, Disney is trying to have a new financial deal with them since years, i would say at least two or three years. And, considering how tough can be negociations - specially financial negociations - with Chinese officials, i think that Disney has probably reached the "that's enough" point.

Business negociations with Chinese can be incredibly difficult and the outcome of this arm wrestling is really uncertain, which is of course a very bad news for everybody: the HKDL fans, the Imagineers who worked on the expansion projects, and of course Disney and the HK government as the park desperately need this expansion to be more successful.

Now, we have to remember that Hong Kong is part of China AND that Disney has a much more important deal waiting for the Shanghaî Disneyland park. Although Hong Kong have a special status inside China, it is still under control of Beijing Central government.....who must give his final agreement to the Shanghaî project.

What Beijing central government will think of Disney's HKDL decision and what effect it will have on their approval of the Disney Shanghaî project, that's all the question. In two words the chess game is still going on and we just have to pray that both projects won't be stormed by this power struggle.

In the meantime, you can have a look to the Reuters article HERE and to the Business Week article HERE.

Photo: copyright Disney


Anonymous said...

HKGovt = troublesome
poor HKDL...

Anonymous said...

Forget Shanghai, fix HK first. Enough half parks already.

BTW negociations=negotiations

Marco Antonio Garcia said...

I agree, there is no point in building another theme park in China if the first one is a failure, they should first expand the HK project, make it profitable and have good relations with the local government before thinking about a new resort. It will be better if Disney invest this money in their existing resorts, the HK one being the top priority, but also DLP needs a capital increase, Disneyland Parc in Paris needs new atracttions. The Walt Disney CO. risks being in real problem by having many unsuccessful, highly indebted parks!