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Thread: Disney plans China park — Shanghai proposal gains momentum

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[quote=MARRIE,356446]A Shanghai government spokesman declined to comment. Approvals by China’s central government could take up to a year.

The agreement signed Thursday in Shanghai represents a framework to be considered by China’s State Council, the central government’s highest administrative body. If it authorises the project, a formal contract would need to be negotiated and approved by other central government bodies, such as China’s Commerce Ministry.

The proposal provides for Burbank, California-based Disney to take a 43 per cent equity stake in Shanghai Disneyland while a joint-venture holding company owned by Shanghai would hold 57 per cent, according to the person familiar with the terms.

The park’s first phase, encompassing about 1.5 square kilometres, would include a theme park, a hotel and shopping outlets and cost up to 24.48 billion yuan, (RM13 billion), that person said. A site near Shanghai’s Pudong International Airport has been designated for the project.

For Disney, the project represents something of a compromise. In its current iteration, the proposal lacks any Chinese broadcast element. When discussions began in 1999, the company had declined Shanghai’s invitations to invest believing it needed its own television channels.

In the US, Disney owns broadcast network ABC and cable-networks.

Media exposure is a crucial part of its strategy to lure millions of Chinese mainlanders to the park and extend its brands to the world’s largest population.

Disney believes broadcast exposure would quickly build awareness among Chinese consumers to Disney franchises and could help entice them to the Shanghai park.

The lack of a Chinese Disney channel has hurt Hong Kong Disneyland, which has struggled since it first opened in 2005 with sub-par attendance and complaints that it is too small. In its first year, it fell 400,000 people short of its target 5.6 million audience. The number of visitors fell to just over four million in its second year.

The joint application was signed Thursday in Shanghai by Nick Franklin, executive vice president for new business development at Walt Disney Parks and Resorts, and a Shanghai district governor, Li Yiping, the person said.

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