| It looks like the Walt Disney Company (DIS) and the Hong Kong government has finally reached an agreement to their undersized and under-developed Hong Kong version of the Magic Kingdom. Although the joint venture, Hong Kong Disneyland declined to comment on the ongoing discussions, Reuters reported on an announcement is expected until early next week. At first glance, what he looks like a major breakthrough for Disney, which in March announced that it dismissed, 30 files were Hong Kong-based "Imagineer," because the discussions with the Hong Kong government, which currently owns 57% of the Parks, has been no progress.|
But it seems as if Disney ended that with all the words. "According to press reports, Disney will pay for the entire expansion will cost as much as 800 million U.S. Dollar. The Government will continue its debt to equity to prevent their share not diluted below the 50% mark. The Hong Kong Government, quite rightly, was reluctant to pony up more money in the money-losing park was too small to allow first time visitors, let alone come back. Although Hong Kong, more than 80% of the first $ 2.9 billion cost of the project, the government has only a 57% stake in the joint venture with Disney, the other 43%.
But it seems to me that the 30% expansion comes too little, too late. The clock is ticking as Disney is planning a monstrous park in Shanghai in 2014, which dwarf the lean version of the Hong Kong Magic Kingdom, the smallest of all Disney theme parks worldwide. But as Allan Zeman, chairman of the profitable state Ocean Park in Hong Kong said to me on the phone today, "Disney has no other choice" but to the additional money because the park will never turn a profit at its present size. Hong Kong Disneyland officials declined to comment on.
Perhaps manager in Burbank still live in Never Never Land. Or maybe they just can not afford that the Hong Kong project was poorly conceived from the outset. From this end, it feels like Disney throws good money after bad. Mainland visitors for more than a third of the tickets sold in Hong Kong Disneyland, Disneyland and Shanghai is to cannibalize that most businesses, when the Magic Kingdom comes to the Middle Kingdom. Shanghai is expected that the urban sprawl in more than 800 hectares, while a Hong Kong park will be extended only to about 150 hectares. And do not forget Universal Studios is opening its own theme park in Singapore as part of the Casino Complex by early next year.
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