Chinese government approves Disney park in Shanghai

The Beijing government has approved plans to build a Disney park in Shanghai, representing a major milestone in the more than decade-long effort by the Walt Disney Co. to build a theme park in mainland China.

Disney submitted plans in January that had been developed jointly with the Shanghai municipal government to build a $3.59-billion park to open as early as 2014. It would be the entertainment giant's fourth theme park location outside the U.S., after Paris, Tokyo and Hong Kong.

This framework agreement received formal approval from the central government, Disney said today. The central government's action clears the way for Disney to work out detailed plans to build and operate the park, a final plan that would address infrastructure issues such as subway and road access to the park, as well as finances.

"China is one of the most dynamic, exciting and important countries in the world, and this approval marks a very significant milestone for the Walt Disney Company in mainland China,” said Disney President and Chief Executive Robert A. Iger.

Disney has been in on-again, off-again discussions with the government in China since 1995, when the Shanghai government first contacted the company to propose building a theme park in the city. Talks have ebbed and flowed since then, with discussions resuming in earnest about two years ago, according to people familiar with the matter who asked not to be identified because of the sensitivity of negotiations.

The new park would give Disney access to 300 million people who live within a day's travel of Shanghai, a sprawling, affluent and modern city of about 16 million people. The new Magic Kingdom-styled theme park would have amenities similar to other Disney destinations around the world, while nodding to its Shanghai region.

-- Dawn C. Chmielewski

Universal delays huge potential Spielberg theme parks payout

In a move that spares Universal Orlando theme parks a potential financial jam next year, Steven Spielberg has agreed to delay by seven years his option to demand a payout worth hundreds of millions of dollars under a longstanding consulting agreement.

The amended deal will make it much easier for the theme park company to renegotiate a heavy debt load that comes due next April and could ultimately net the director even more money than he would otherwise have received.

As part of the agreement signed in 1987 with Universal Orlando, a joint venture of General Electric Co.'s NBC Universal and private equity firm Blackstone Group, Spielberg receives 2% of ticket sales and a portion of concessions at the company's two Florida theme parks. In addition, he gets a portion of revenue from Universal Studios Japan in Osaka, but not from Universal Studios Hollywood.

Last year, Spielberg made about $34 million from the Orlando and Osaka parks for his work consulting on attractions based on movies he has directed and produced, such as "Jaws," "Back to the Future," and "Jurassic Park," according to a regulatory filing by Universal Orlando.

He also had the right starting in June 2010 to forgo his quarterly payments in exchange for a lump sum based on the future value of his deal.

That would likely have been a financial hardship for Universal Orlando, which has $1 billion in debt due next April that it is trying to restructure. In its last annual report, the company acknowledged that such efforts "could be adversely impacted" by the looming possibility of a huge payment to Spielberg, which it was not certain it could afford.

A public filing of the amendments to Spielberg's deal does not explain what the director is receiving in exchange for agreeing to delay his potential payout, and a Universal spokeswoman declined to comment. However, it appears to be connected to a point that guarantees him a percentage of revenue from Universal theme parks currently in the works in Singapore, Dubai and two undisclosed locations.

In addition, the delay could prove more lucrative for Spielberg, already one of the richest individuals in Hollywood, as attendance at Universal Orlando is expected to get a boost beginning next spring when a lavish new attraction based on Harry Potter opens.

The deal amendment also spells out that Spielberg's obligations will transfer to any new owners, a potentially important point as NBC Universal may be taken over by cable operator Comcast Corp. in a deal under discussion with the media conglomerate's owner, General Electric Co.

Spielberg declined to comment through a spokesman.

--Ben Fritz and Claudia Eller

Photo: Steven Spielberg at the National Board of Review Awards in 2007. Credit: Evan Agostoni, Getty Images.

Disney names new president of Disneyland Resort

George Kalogridis, a 38-year Disney veteran who got his start as a busboy at the Contemporary Resort at Walt Disney World in Orlando, Fla., has been named president of the Disneyland Resort in Anaheim.

As president, Kalogridis will oversee a workforce of 20,000 employees -- whom Disney refers to as "cast members" -- and the 506-acre resort, which encompasses Disneyland and Disney's California Adventure theme parks, three hotels and the Downtown Disney shopping district.

The 55-year-old executive most recently served as chief operating officer for Disneyland Resort Paris. Prior to that, he was senior vice president of resort operations for Disneyland in Anaheim, where he played a significant role in the opening of California Adventure and Downtown Disney.

"I am thrilled to be returning to Disneyland, particularly during this time of significant expansion," Kalogridis said in a statement, referring to the $1-billion expansion of California Adventure.

Kalogridis succeeds Ed Grier, who is retiring from the company. He will report to Al Weiss, president of worldwide operations for Walt Disney Parks and Resorts.

-- Dawn C. Chmielewski

Photo: George Kalogridis. Credit: Disneyland Resort Paris

Recession smacks Disney profits; movie division results off 97%

 

The Walt Disney Co. reported a decline in second-quarter profits, as the recession dragged down the company's theme park, movie and television businesses.

The company reported a 46% drop in net income to $613 million, on revenue of $8 billion. Diluted earnings per share for the quarter were 33 cents a share, including restructuring and impairment charges which had a 10 cent per share impact on earnings.

"This was a difficult second quarter due to the weak economy and other factors," Disney President and Chief Executive Robert A. Iger said in a statement.

Disney's theme parks are feeling the brunt of the slow economy and people's reluctance to take vacations because of job insecurity. Operating income was off 50% to $171 million, from $339 million a year earlier. The drop reflected reduced guest spending at Walt Disney World in Orlando, Fla., and the Disneyland Resort in Anaheim, reflecting the discounting in hotel rates and ticket promotions needed to keep visitors coming to the parks.

The movie studio's operating income fell 97% to $13 million because of weak box office sales for "Confessions of a Shopaholic" and "Jonas Brothers: The 3D Concert Experience." DVD sales were also lower.

Disney's television business, particularly its ABC network, was also down. The network reported a 4% drop in operating income to $1.3 billion. Operating income for the broadcast business was down 38% to $162 million for the quarter, because of  the weak economy eroding ad sales at the same time that production cost rose.

By contrast, Disney's cable networks -- ESPN, ABC Family and Disney Channel -- reported a gain of 5%.

--Dawn C. Chmielewski

Photo: Disney Chief Executive Robert Iger. Credit: Fred Prouser / Reuters

Universal Studios to open "Transformers" attraction

The only question is what took them so long ...

The battling robots of "Transformers"  will return -- as a 3D ride at Universal Studios Hollywood and Singapore.  Universal Parks & Resorts said it would create a ride that blends special effects and robotics in a ride that debuts in 2011 in Asia and, shortly thereafter, in Los Angeles.  The movie's director, Michael Bay, and its executive producer, Steven Spielberg, will collaborate on the attraction, based on the 2007 summer blockbuster.

-- Dawn Chmielewski

Renderings courtesy of Universal Parks & Resorts.