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Disney in Asia, Again?

Raymond H. Lopez, Ph.D.

Contact Person:
Raymond H. Lopez, Ph.D.
Pace University
Lubin School of Business
1 Martine Avenue, 5th Floor
White Plains, NY 10606
Tel: (914)422-4165
Fax: (914)422-4184
E-mail: rlopez@pace.edu

December 2001
Disney in Asia, Again?

“We could be getting close to the time for a major Disney attraction in the world’s most populous nation.” [i]

“I am completely confident that Chinese people love Mickey no less than they love a Big Mac.” [ii]

Early in 1999, Michael Eisner, CEO of The Walt Disney Company, voiced his opinions concerning potential markets for his firm’s entertainment products and services. A major thrust for the new millenium would be development in Asia.

The firm had now achieved a certain level of experience with owning and/or managing assets and operations outside the United States. They had two competing models that would be utilized to analyze and ascertain the financial and operating structure of their next foray into the global business arena.

Their first experience was Tokyo Disneyland. Modeled after Disneyland in California and located six miles from downtown Tokyo, the park opened in 1983 and was literally a cultural and financial success from day one. However, not all of the potential financial benefits accrued to Disney shareholders, since the facility was entirely owned by The Oriental Land Company. Disney generated a large and growing stream of fee income, but did not participate as an owner. The architect of Disney’s strategy was Ron Miller, CEO, son-in-law of Walt Disney, and leader of a very conservative management team.

By the time a development decision for Western Europe rolled around in 1987, Michael Eisner was Disney’s CEO. The new management team was convinced of the benefits of ownership. In negotiating with the

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