KEVIN On September 30th, 2005, Michael Eisner officially left the Walt Disney Company. He formally resigned as a member of the board and as the company’s chief executive. His successor, Bob Iger, had been running the company for the past six months as he transitioned into his new role. Eisner’s departure was not front page news; the climax of the events leading to his resignation had long played out, and all that was left was for him to pack up his things and go home. He refused questions from the press, and he only left behind a one-page career retrospective to be published in the company’s newsletter.
Those close to the executive explained that Eisner was not ready to give up his job at Disney, and that he was most worried about his legacy at the company. The second half of his 21-year tenure, especially the past few years, had certainly clouded what was one of the greatest corporate success stories of all time. How, then, did it come to this? To understand that, we’ll need to go back a bit.
EISNER Et maintenant je declare Euro Disney officiellement ouvert!
(All monitors display the Defunctland title as shown in different episodes of Season2 over ominous music. They then come together to show the title of this title: ‘Finale: Hong Kong Disneyland’) --- KEVIN On November 1st, 1999, the government of Hong Kong announced that a deal had been reached with the Walt Disney Company to bring a Disney resort to the autonomous territory. Hong Kong was relying on the new resort to help the recovery of its struggling economy, and they were certain that a Disney park would increase tourism and create new jobs. The Walt Disney Company was silent on the matter, although a spokesperson had confirmed a few months earlier in March that Disney was considering expanding internationally into Hong Kong. If the plans were to come to fruition, it would be the company’s third international resort after Tokyo and Paris.
At this time, the Walt Disney Company still saw expansion as a viable option. Many in the company, including Eisner, felt that Disney had not properly capitalized off of the immense success of the studio’s recent animated films. However, it wasn’t from a lack of trying. The failure of Euro Disneyland in France and the inability to build Disney’s America in Virginia had turned Eisner away from big-budget expansion projects in the parks. On top of this, Eisner struggled to secure a steady management team. The death of Disney president Frank Wells, the departure of Walt Disney Studios president Jeffrey Katzenberg, and the hiring and subsequent firing of talent agent and Eisner’s personal friend Michael Ovitz had left Eisner as a lone wolf at the top of the company.
All he had to hold onto was the most lucrative executive contract in the business: an extension as chief executive he had signed a few years earlier, guaranteeing his position at the company until 2006. With an annual salary of $750,000 and stock options with a projected value of $771 million, Eisner had significant insurance on his job, as Disney could not afford another high cost severance package after spending hundreds of millions of dollars on the departure of Katzenberg and Ovitz. This would help Eisner greatly as Disney entered the new millennium. After Disney’s acquisition of Capital Cities/ABC was completed in 1996, Disney officially became the largest media company in the world, passing Time-Warner. This also meant that Eisner now had to keep an eye on the company’s film division, television division, and theme park division.
Walt Disney Pictures was, in retrospect, ending its Renaissance era of hit animated films. Tarzan, released in the summer of 1999, would end the second half of Disney’s most financially successful era. Disney’s post-Renaissance would bring films such as Fantasia 2000, Dinosaur, The Emperor’s New Groove, Atlantis: The Lost Empire, Lilo & Stitch, and Treasure Planet within just a few years. Some of these films were well-received by critics and audiences, but all but Lilo & Stitch and Dinosaur were considered box office failures. The films slated for after 2002 would produce similar if not worse results, and the success of Pixar and DreamWorks Animation would demote Walt Disney Animation to third place - an outcome unimaginable, as the company had enjoyed a monopoly over the medium for over six decades.
The company’s new stake in the television business was not going as planned, either. Eisner and Disney were having trouble putting together a successful primetime programming block, and ABC was relying on a newly produced US version of the British game show, Who Wants to Be a Millionaire?, to compete in the ratings. One positive of the merger was Robert Iger, the COO and president of Capital Cities/ABC. The young executive impressed Eisner, although he worried that Iger lacked the necessary creative skills to run a company such as Disney. Iger would become the president of the Walt Disney Company in early 2000; the position had been left vacant since the departure of Ovitz.
Finally, the theme park division was not thriving in the way that many thought it should, and much of the expansion and renovations promised ten years earlier to be part of Eisner’s ‘Disney Decade’ plan had not come to fruition. Eisner had been able to add additional parks in both Orlando and Anaheim, adding Disney’s Animal Kingdom to the Walt Disney World Resort in the spring of 1998 and beginning construction on Disney’s California Adventure to create the Disneyland Resort in January of that year. Also, plans for a second park in the Paris resort were revived and the development of Walt Disney Studios Park began. On top of these, a second park for the successful Tokyo Disneyland Resort was also in development. His most recent attempt at an expansion outside of the existing resorts was Disney Regional Entertainment: three entertainment chains to debut in multiple cities throughout the US. The flagship concept, the virtual reality arcade DisneyQuest, had just opened its Chicago location in the summer of 1999. Now, with rumors of a third international park in Hong Kong circulating, it seemed that Eisner was ready to test expansion again.
On November 2nd, 1999, the day after the news broke that a deal had been reached between Hong Kong and Disney, representatives from both parties officially announced that a Hong Kong Disney resort would be constructed. The treatment Disney received in France after the announcement of Euro Disneyland was quite different than the reaction they received in Hong Kong. While Disney had the support of a few French contractors and a few government officials, it seemed that the overwhelming majority of citizens aggressively rejected the prospect of Disney coming to their country. Hong Kong had the exact opposite reaction. They hailed Disney’s arrival, treating them as an economic savior of sorts, lauding Disney and proclaiming that the theme park would rescue them from their prolonged recession. A few in the media were skeptical, using the same talking points that Disney had to fight against any time they attempted to build a new park outside of Orlando or Tokyo. This could easily be compiled into a Greatest Hits by the Opposition album.
(A mock commercial for the said album is shown.)
Now That’s What I Call a Good Reason to Reject a Disney Theme Park (Vol. HK). Here are a few:
(Not My Taxes) The government will spend taxpayer money to subsidize and incentivize Disney to come to the area. In the case of Hong Kong, estimates said that this could be around $2.6 billion, a commitment that Hong Kong officials used to lure Disney away from a park in mainland China.
(Less Money, Less Jobs) The employment benefits that the park will bring after the construction will be low-wage part-time jobs. While discussed during the time of the Hong Kong Disney announcement, the consensus was that, given Hong Kong’s struggling economy, that any jobs would be a good thing.
(No Return) Finally, that the positive economic impact promised by Disney is overstated, and that the subsidies given to the park will offset any financial benefit to come from it.
(Others listed but not read off include: Fireworks [Bang Bang] This Sacred Ground Les Américains, Bête Comme Ses Pieds Mother Nature Cries Heavy Traffic The Tourist Shuffle Heavy Traffic [Club Remix] Estates 2 Nice Get Down ft. Property Value Heavy Traffic [Live Acoustic])
The small opposition did bring up these points, but overall Hong Kong seemed welcoming of Disney, expecting them to bring 1.2 million additional tourists and spark an annual GDP growth of almost 0.5%.
The site for the park was to be located on Penny’s Bay, a northeast section of Hong Kong’s largest island, Lantau Island. After rumors of the new Disney resort began to circulate, local archaeologists went to the island to search for and remove any artifacts before Disney’s arrival.
Disney’s new Hong Kong resort was set to open in 2005, so development began immediately. This resulted in Disney’s California Adventure, Walt Disney Studios Paris, Tokyo DisneySea, and Disney’s Hong Kong resort being constructed at the same time. Eisner and other executives were wary of spending too much on three of the four new parks. DisneySea’s development and construction was conducted by the Oriental Land Company, the independent Japanese company that pays Disney royalties and contracts its Imagineers. Finances were rarely an issue in Tokyo, unlike in the United States, France, and now Hong Kong.
In 2000, Disney began clearing the land in order to build the park. The dredging upset local fishermen and environmental groups; they petitioned the government of Hong Kong to stop the development, claiming that Disney was in violation of their agreement, as the dredging had been killing many of the fish in the bay. Hong Kong shrugged off the accusations toward Disney, telling those concerned that the amount of fish being killed was generally in line with what they expected. The same year, Eisner commented on the troubling amount of air pollution in Hong Kong, which the government quickly assured him they were fixing. This would be the beginning of what could only be described as an awkward relationship between Disney and Hong Kong.
On February 8th, 2001, Disney’s California Adventure opened to mostly negative reviews. Visitors disliked the budget park, citing the lack of attractions and the terrifyingly poor quality of the existing ones. Executives were worried that the small park’s main issue would be its limited capacity, but as it turned out, this wouldn’t be an issue at all: attendance was poor out of the gate. This, combined with the potential of an economic recession, sent Disney into a panic over the future of California Adventure and the three other parks currently in construction.
Despite these concerns, it appeared as though Eisner was planning for even more international expansion. In the summer of 2001, an article released by the Beijing Evening News reported that Disney was planning to build a park in the capital city in time for the 2008 Olympics. This infuriated Hong Kong officials. If another Disney park were to open in China, it would destroy Hong Kong Disney’s chances at attracting mainland tourists and becoming a premier vacation destination. After the outrage made its way to Eisner, he announced that Disney would not open another park in China for at least eight years, that the company was 100% focused on Hong Kong, and that in the event that Disney did build a park in mainland China, it would most likely be in Shanghai and not Beijing - a clarification that seemed to prove Disney’s desire for a new park.
Later that year, the terrorist attacks of September 11th triggered an economic downturn, and the tourism industry saw the worst of it, with many across the United States and the world afraid to travel. On top of this, rumors circulated that Disney’s theme parks could be a target for terrorists. This did not bode well for the struggling parks division and the company as a whole. Each division of the company seemed to be in major trouble. This brought more budget cuts at the parks and more projects in development being canceled. Hong Kong Disney was too far into development to be stopped, but the Walt Disney Company’s financial struggles removed any possibility of a budget increase for the park.
In 2002, the rumors of a park in Shanghai resurfaced, with Disney refusing to comment. Hong Kong officials and residents were once again outraged. By now, they were expecting half of Hong Kong Disney’s visitors to be from mainland China, and the region had already poured $2 billion of public funds into constructing the park and improving surrounding infrastructure in preparation for its opening. Analysts estimated that it would take thirteen years after opening for Hong Kong Disney to offset construction costs, and if a park in Shanghai opened during that time, there would be little to no chance of a return on the investment. The park was to begin construction the next year, and Hong Kong continued to beg Disney to not commit to a park in mainland China.
Before the construction of the park began, workers still dredging the water surrounding the Hong Kong Disney site encountered something peculiar in the bay: dozens of bombs buried in the ocean floor were now exposed. Local bomb experts were accused of underestimating the amount of shells and explosives left over from World War II. The bomb experts assured Disney and the workers that bombs that old won’t go off…although they did mention that sometimes they do. Crews continued dredging, a bit more carefully than before.
At the same time as this, an outbreak of the Severe Acute Respiratory Syndrome virus, known as SARS, took the lives of nearly 800 people, with the majority of reported cases coming from southern China. The disease eventually spread to Hong Kong in February of 2003, terrifying public health officials. Travel was discouraged as containment efforts intensified, with Hong Kong at the center of the epidemic, which did not bode well for the Disney park under construction. Thankfully for the health of the people of the affected regions, and also beneficial for the new Disney park, Hong Kong was removed from the World Health Organization’s affected areas in June 2003, and the outbreak was classified as contained in July. This greatly impacted Hong Kong’s economic recovery, and officials were banking on the Disney park to restore tourism to the region more than ever. --- On November 20th, 2003, Roy E. Disney - nephew of Walt Disney, son of Roy O. Disney, chairman of Walt Disney Animation, and vice chairman of the Walt Disney Company’s board of directors - resigned from his position. Stanley Gold, another Disney board member and an ally of Roy, resigned from his position as well. These two had one goal with their resignation: to take down Michael Eisner. In a letter addressed to Eisner and sent to the press, Roy explained his issues with the executive. He pointed to Eisner’s conduct with the ousting of board member Andrea Van de Kamp, who was vocal about her displeasure with the direction of the company. Roy accused Eisner of stacking the board in his favor and ousting anyone that didn’t agree with his ideas. In the letter, he outlines seven main reasons for his resignation, and why Eisner should be removed from his position.
Eisner and Bob Iger’s inability to develop successful programming for ABC.
Eisner’s micromanagement of those around him.
The loss of quality in the parks. Roy mentions the theme parks built on the cheap, specifically citing Disney’s California Adventure, Walt Disney Studios Paris, and the upcoming Hong Kong Disneyland.
The decrease in value of the Disney brand as a result of money-grubbing and lack of creative direction. Roy claimed that the public perception was that Disney was always trying to make a quick buck.
The discouragement of creativity and art produced in the past few years.
Eisner’s inability to build and maintain relationships with Disney’s creative partners, emphasizing Pixar, which at the time was unhappy with the Disney partnership for a multitude of reasons. Months after this, Pixar would announce an end to their distribution partnership with Disney, turning many more against Eisner and Disney’s management team.
Eisner’s refusal to discuss succession.
In the letter, Roy also specifically referenced the death of Frank Wells and Eisner’s inability to run the company without his partner, a common belief among employees that infuriated Eisner. This was the start of Roy and Gold’s ‘Save Disney’ campaign, an expensive and elaborate effort to oust Eisner and his management team through appealing to shareholders, and if it came to it, legal action. Roy used the legacy of his father and his uncle Walt to his advantage, urging shareholders to preserve the magic of the company. He specifically appealed to Cast Members and the smaller shareholders that invested in the company - not just to make a profit, but to be a part of the magic that it creates.
Eisner and management brushed off Roy’s efforts as a political stunt, and many within the company believed Roy’s issues were personal, and that by taking them public, he was only making matters worse for Disney. They also pointed out that many of the moves Roy and Gold cited as failures of management were decisions that they approved as board members. Roy admitted that he had given management the benefit of the doubt too many times, but that his campaign was to prevent the company from continuing its string of failures.
Meanwhile in Hong Kong, the alleged budget park was still being constructed, now being used as an example of mismanagement in the company years before its opening. The question sparked by Roy’s allegations is: How do you build a budget Disney theme park? The parks are known for their spare-no-expense immersion and attention to detail. This results in attractions costing tens of millions of dollars to build, and potentially billions for an entire park. How can you build a well-themed immersive environment cheaply?
As Eisner proved, it was actually pretty simple; it all comes down to choosing the right theme. If you want to build a faraway land with detailed dark rides that take you on adventures beyond one person’s wildest dreams, then it’s next to impossible to do it on the cheap. The key is to pick a theme that is easy and low-cost to deliver to its full extent. For instance, choosing a county fair, a pier amusement park, or a carnival as a themed land in the parks is a great way to operate multiple ride without having to build immersive theming. Any poor craftsmanship or lack of effort fits that theme perfectly. Another example is theming a section of the park - or the entire thing - to Hollywood. This saves a lot of money when it comes to set-dressing attractions. There’s no need to build your roller coaster in a beautifully sculpted mountain; instead, build it in a large tan box and spray paint ‘Studio’ in a few of the corners. It doesn’t cost nearly as much, and it technically delivers on the promised theming of studios.
In the case of Hong Kong Disneyland, how would one save money on something as crucial as the park’s central icon, for instance? Certainly there wouldn’t be any way to avoid spending whatever is necessary to ensure that the center of the park is the most beautiful and well-themed section…except there was. The solution to the issue of the expensive icon was claiming nostalgia and creating a tribute to the original Disneyland castle, the smallest of any of the Magic Kingdom park castles by a long shot. This would not be the only area where the company would save money, but being the icon, it would be the most obvious. This was the corporate mindset with which Hong Kong Disneyland was built. --- On March 3rd, 2004, the Walt Disney Company held their annual shareholders meeting in Philadelphia. Just a few weeks prior, Comcast had made a surprise bid to acquire the Walt Disney Company, catching both Disney and the media off guard. Disney was struggling, but the company had just released a strong first quarter earnings report and they were coming off of a successful slate of films in 2003. The seemingly random bid raised the stakes for the shareholders meeting; while Disney had expressed no interest in the merger, this strengthened Roy’s argument to preserve the soul of the company, which would certainly be destroyed if it were absorbed into a large media conglomerate. At the same time, it provided management with a lot of options, including a potential graceful escape plan for Eisner should he approve the merger.
Everyone was present at the shareholders meeting. Roy gave a passionate speech on his Save Disney campaign, which was met with thunderous applause and a standing ovation. Eisner’s speech spoke of the company’s success and its future, and he claimed the points Roy was making were exaggerated or simply untrue. The applause he received was described as light. It then came time to read the re-election vote for the board of directors. Roy was hoping for around 20% of shareholders to withhold their votes for Eisner’s re-election, which would have been a strong vote of no confidence in the chairman and CEO. Once the votes were tallied, Eisner jokingly tried to adjourn the meeting. After howls of protest, he said, “I almost got away with that.”
The results of the votes were then read. For Roy, the news was far greater than he could have imagined; for Eisner, it was far worse. 43.4% of shareholders withheld their votes to re-elect Eisner to the board. An opposition vote of that magnitude was unprecedented, with only a handful of comparable examples in the history of corporate America. It was later revealed that over 70% of Cast Members voted against Eisner, indicating how pay cuts and budgeting in the parks was affecting the morale of the company as a whole.
After the vote, Eisner was stripped of his role of chairman of the board, retaining his seat and his position to CEO. Eisner had suggested the idea of him resigning as the chairman far before the meeting, but it was a strong indication that Eisner’s days at the company were numbered. --- (Hong Kong Disneyland pre-opening. Eisner stands at the podium on a smaller scale replica of Sleeping Beauty Castle, giving a speech.)
EISNER All of us at the Walt Disney Company are thankful for having the opportunity to create for the people of Hong Kong and China a Disneyland of their own. With Chinese New Year just around the corner, I wanted to be the first one to say, kung hei fat choy. Thank you.
(Eisner takes his seat as the audience applauds.) --- KEVIN Later, in 2004, it was announced that Hong Kong Disneyland would open on September 12th, 2005. The company discussed Hong Kong’s excitement for the new park, and how it would focus on bringing the American entertainment experience to the region - closer to the strategy for Tokyo Disneyland, as opposed to Euro Disneyland. Still, they were careful to incorporate the area’s distinct culture, hiring a professional feng shui consultant to ensure that the park would provide a familiar and harmonious layout to its guests. The coming year was shaping up to be a big one for Disney parks, with both the opening of Hong Kong Disneyland Resort and Disneyland’s 50th anniversary celebrations.
On September 10th, 2004, Eisner wrote a formal letter to Disney’s board of directors announcing his intent to leave Disney after his contract expired on September 30th, 2006. The move was merely a formality, as it was clear that the board would not review Eisner’s contract anyways. He also endorsed Bob Iger as his successor, although an outside search was launched by the board. Many, including Eisner, questioned whether or not he would remain on the company’s board, but after deliberation on the issue, it became clear that he would have a complete exit from the company.
Roy and Gold continued their campaign, claiming that Eisner’s resignation letter was a well calculated move to hand CEO duties to his ally, Iger, and that he might still try to retain power in the company. They urged the board to end his contract a year early, removing Eisner from the company in 2005. The board refused their request, but they did ensure that a successor would by chosen by the summer of the next year.
On March 14th, 2005, Disney’s board unanimously voted to select Bob Iger as Eisner’s successor. The selection process was quite controversial, with Roy and Gold criticizing the decision to appoint Iger and the lack of outside candidates. The search was made more difficult by Eisner’s insistence to be present during every interview, a situation that turned many potential candidates away. There was some good news for Roy and Gold, as with the announcement of Iger’s promotion, it was revealed that Eisner would retire a year earlier than expected, on September 30th, 2005. Coincidentally, three weeks after the opening of Hong Kong Disneyland, Iger would take over day-to-day CEO duties while Eisner would assist him with the transition. --- In June of 2005, environmentalists objected to Disney’s plan to serve shark fin soup at wedding banquets held at the resort. Despite the dish being of traditional Chinese cuisine, activists were worried about the declining shark population and the animal abuse conducted in order to obtain a shark’s fin, which included fishermen pulling sharks out of the water, cutting off their fin, and throwing them back into the ocean to die. Disney attempted to find an environmentally sustainable way to provide the dish, but a study revealed that no such options were available. The park took the dish off the menu and stated that they would only serve it for parties that specifically requested it. On top of this, they would provide those that ordered the dish with a pamphlet explaining the horrors committed in order to make the meal possible, which would have certainly been a hit among newlyweds (/s). Even with these accommodations, activists would not back down, and Disney decided to not serve shark fin soup whatsoever.
The month after the shark fin backlash, a news report broke claiming that Disney had rounded up and killed nearly fifty stray dogs that had been roaming around the Hong Kong Disney site. The headlines were sensationalized, as Disney merely called in government dog catchers who took the strays immediately to a shelter. The shelter, having no time to find homes for the animals, were only able to relocate three of the 45 dogs, giving lethal injections to the remaining 42. Media also reported that some of the dogs were unofficial guard dogs used by construction workers, but both Disney and the construction company denied these allegations, instead claiming that the dogs, traveling in packs, put crews in dangerous situations.
The bad press, deserved or not, was just the beginning, as these types of negative reports on Hong Kong Disney would increase exponentially as the park’s September opening neared. On August 19th, 2005, reports were released accusing Disney of running manufacturing plants in mainland China that overworked and underpaid employees, reportedly compensating some 33 cents an hour, which was nine cents under China’s minimum wage of 42 cents an hour. Disney promised to investigate the matter, while the factories denied the allegations.
On August 27th, 2005, Hong Kong actor Daniel Wu voiced opposition to the park and announced a personal boycott. He claimed that when him and the other stars were filming a promo for the park, the American workers were disrespectful to them. A spokesperson for Hong Kong Disneyland chalked the incident up to miscommunication and hoped that everyone would come to the park themselves to see the fantastic service.
On September 4th, Hong Kong Disneyland held a rehearsal day, bringing in 29,000 guests to test attractions and traffic flow. The event was created to avoid an opening day disaster like Disneyland’s fifty years prior, but actually achieved the opposite. The day was a disaster. Guests waited in some lines for hours just to have the ride break down, and the park’s restaurants did not have nearly enough seats to accommodate the crowds. It certainly didn’t help that Hong Kong Disneyland was the smallest Magic Kingdom-style park ever created. While some early concept work showed a more ambitious version of the park, the budget park seemed that it was going to live up to its title. It also appeared that Disney was planning to expand the resort before they expand at the park, preplanning for a second gate and more hotels.
Weeks before opening, a case of food poisoning at the park made its way into the news. Worse, when Hong Kong authorities came to investigate, Disney’s security demanded that they removed parts of their uniform before entering. When the story broke, Hong Kong residents were outraged, and there was potential that Hong Kong authorities would pursue legal action over the encounter.
Luckily, the park’s opening would overshadow the incident. Before the opening, Disney seemed anxious to distance themselves from the past year of controversy and to see just how well their budget park would perform. --- (Commercial for Hong Kong Disneyland. A boy dressed as a Jungle Cruise skipper lectures other children in a classroom setting.)
BOY Heoi di si nei zou zuk zeonbei! Di si nei lokjyun gaujyut sapjijat hoimok liao!
(The kids act out working at the park admission gate.)
Jiu jyuding munpiu ma! Jau hando gaauting gunggeoi hoji syunzaak. Gan gei jiu taising noidei canjau zeoihou ging lo wu gwogwaan. Beihoi faanmong sigaan. Jyun jau zoi zeleoi duo laukei(?)tin, Hoenggong jau hando houheoi cyu!
Heoi di si nei zou zuk zeonbei, waan dak hoisam zi sing dak nei! --- KEVIN On September 12th, 2005, the Hong Kong Disneyland Resort officially opened to the public. Both Iger and Eisner were in attendance for the big day. Reportedly, while Iger was watching the opening day parade, he noticed that children responded to the featured Pixar characters more than they did to the classic Disney animated characters. The realization fueled Iger to repair Disney’s relationship with Pixar, which he would do less than six months later by acquiring the computer animation company.
Hong Kong Disneyland featured only four themed lands: Main Street USA, Adventureland, Fantasyland, and Tomorrowland. The park advertised 22 attractions, including Autopia, which would not open until 2006. For reference, this is about half of the attractions currently offered at the Magic Kingdom. Of these 22 attractions, one was City Hall and Guest Relations, and another was the Main Street Vehicles. Another was a large set of tiki statues that sprayed guests with water. Sleeping Beauty Castle and a Snow White-themed wishing well were another two. The railroad and its only stop in Fantasyland were listed separately. Of the remaining fifteen attractions, two were live shows found elsewhere: Festival of the Lion King from Animal Kingdom and The Golden Mickeys from Disney Cruise Line. In Adventureland, Tarzan’s Treehouse and the rafts to get to Tarzan’s Treehouse were listed separate; in Fantasyland, there was Mickey’s PhilharMagic and a character meet-and-greet. The remaining nine attractions would be considered by guests to be the park’s only rides. This included Jungle Cruise, The Many Adventures of Winnie the Pooh, Dumbo the Flying Elephant, Cinderella Carousel, Mad Hatter Tea Cups, Orbitron, Space Mountain, Buzz Lightyear Astro Blasters, and the soon-to-open Autopia. And that was it. No Peter Pan’s Flight, no Pirates of the Caribbean, and no Big Thunder Mountain.
The scant park was more fleshed out that Walt Disney Studios Park in Paris upon its opening, but Hong Kong Disneyland was no doubt made with a similar financial hold. This was not the fault of the Imagineers or the Cast Members; those designing and operating the park were still able to create a sense of magic and add beautiful features and flourishes despite the financial restrictions, and the park was a huge success in delivery the perfect mix of American and Chinese culture. However, executives couldn’t care less about how the park looked on the guide map; they were focused on how the park looked financially.
The head of attendance calculating at the Walt Disney Company estimated that 5.6 million people would visit the park in its first year, with around ten million visiting every year after that. Hong Kong’s population was only 6.8 million in 2005, so the park was relying on two thirds of its estimated visitors to come from mainland China and other countries in Asia. Right out of the gate, things were not looking good; quite the opposite, really. Despite the worries of Disney executives and Hong Kong officials that the park’s low capacity would result in unmanageable crowds, the park’s opening week attendance did not meet predictions. An indicator of the weak performance was the resort’s inability to fill the rooms on its two on-property hotels, a similar issue faced in Paris. For Hong Kong, this meant that mainland and international tourists were not showing up in droves, and it seemed that the locals were not about to make up the difference.
The month after the park opened, an employee climbed to the top of Space Mountain, threatening to take his own life. Luckily, the attempt was thwarted. However, an opinion poll following the incident revealed the extent to which the public relations nightmares that the park had endured were affecting the public’s perception of the resort. 24% of those polled by Asian trade magazine media reported that they had a negative view of Hong Kong Disneyland; only 42% claimed that their view was positive. The negative publicity, combined with high ticket prices, Hong Kong’s struggling economy, a lack of attachment to the Disney company by the people of China, and a lack of attractions revealed how much trouble the park could be in. Worst of all, Hong Kong Disney was having a difficult time competing with the nearby Ocean Park, which saw a jump in attendance after Hong Kong Disney opened, and visitor numbers seemed even between the two, with the possibility that Ocean Park was doing better.
As if things couldn’t get any worse, Hong Kong Disney finally saw the crowd that officials had been fearing. During the Chinese Lunar New Year festival, a swarm of guests crowded the park. Hong Kong Disneyland hit capacity day after day during the festivities, doubling its regular crowd size. Disney, not anticipating the crowds, did not have special holiday tickets, and crowds of guests with valid entry passes were turned away at the gates. Furious over being denied entry, many engaged in screaming matches with the Cast Members and the police, while a few took a more active response and tried to scale the park’s fences. This brought more bad press for Hong Kong Disneyland, and park officials apologized profusely, issuing official statements almost every day of the festivities. A simple special event ticket would be required the following year to avoid a similar disaster.
But the damage had already been done to the struggling park. Hong Kong Disney’s first year underperformed, with 5.2 million guests visiting the park, nearly half a million short of projections. The news could only get worse from there. The projected attendance in 2006 of ten million visitors was a bit off; the actual attendance was even lower than the first year, at 4.17 million visitors. In two years, the park had created a $200 million deficit. Hong Kong legislators began to publicly criticize the park’s poor performance. Hong Kong owned 57% of the park, with Disney owning the rest. With an initial cost of $3.5 billion and a large deficit, the park’s debt was just going to keep growing.
Disney was already making attempts to remedy the lack of attractions; four new shows and the classic boat ride “it’s a small world” were set to open in 2008. This boosted attendance slightly; however, it was not enough. Disney and Hong Kong knew that they had to do something big to save the resort, especially since a deal between Disney and Shanghai was close to being reached.
The solution was a $465 million expansion to Hong Kong Disney. This would add up to thirty new attractions to the small park, and three new lands: Mystic Point, Grizzly Gulch, and Toy Story Land. This would also increase Disney’s stake in Hong Kong Disneyland for 43% to 48%, with Hong Kong’s falling from 57% to 52%. Toy Story Land would be the first to open, debuting on November 17th, 2011. The park was a mere clone of the quick-fix land that had opened at Walt Disney Studios Park a year prior. Both feature small carnival attractions themed to the Toy Story franchise. On July 14th, 2012, Grizzly Gulch opened with a new roller coaster, the Big Grizzly Mountain Runaway Mine Cars. A unique spin on both Frontierland and its famous E-ticket, Big Thunder Mountain, Big Grizzly Mountain featured Audio-Animatronic bears, changes in direction, and a launch.
The new additions brought great news for both Hong Kong’s government and Disney: the resort had finally turned an annual profit. The new attractions motivated attendance to jump to 6.7 million guests, and the resort was poised to climb its way out of its debt. There was one issue: the long-rumored Shanghai Disneyland project had been approved, and it was set to open in 2016. This meant that fewer mainland guests would visit Hong Kong as the date approached. The bad news, while expected, put a damper on the park’s recent success. All Hong Kong could do was continue its expansion with unique attractions and hope that guests would continue to travel to the resort.
On May 17th, 2013, Mystic Point opened with its signature attraction: Mystic Manor. The ride takes the place of the Haunted Mansion found at other Disney parks. Due to Chinese traditions and censorship laws restricting depictions of the supernatural, the popular dark ride featuring departed spirits cannot be cloned to the resort. The new ride, Mystic Manor, told the story of Lord Henry Mystic and his monkey Albert. When Albert opens Mystic’s music box, the house comes to life. The trackless dark ride is one of the best attractions ever created by Disney; it was a hit among guests and solidified the park’s expansion as an overwhelming success. 2013’s profit was even higher than 2012’s, and it would be even higher in 2014.
Unfortunately, this was the last year of profit that Hong Kong Disneyland has seen to date. Shanghai Disneyland opened on June 16th, 2016. The high-capacity park boasted state-of-the-art rides and unique attractions. Unlike the budget park built in Hong Kong, and possibly learning from its mistakes, Disney and Shanghai spared no expense, and it reflected in attendance. In its first year, over eleven million guests visited Shanghai Disneyland. The park’s massive success was one of the main factors in the loss of profits in Hong Kong.
In 2015, 2016, and 2017, the park reported increasing losses despite revenue being up as of recent. This is partly due to the cost of expansion, including a third resort hotel and an new simulator, The Iron Man Experience, both of which opened in 2017. A new Moana stage show opened in 2018; a new Ant-Man and the Wasp ride is opening in March of 2019, replacing Buzz Lightyear Astro Blasters; a Frozen-themed land and another Marvel attraction to be opened within the next few years; and perhaps the most symbolic of the park’s transformation: a new castle. The small Sleeping Beauty Castle will be renovated and built into a much larger and more elaborate centerpiece. This seems to mark the end to Hong Kong Disneyland’s years as a budget park, and while the resort will most likely continue to report losses during the $1.4 billion expansion, there is hope for Disney’s worst-performing Magic Kingdom. --- The expensive reimagining of the park is a typical strategy used under CEO Bob Iger, and he has had to conduct similar financial rescues with Disney California Adventure and Walt Disney Studios Park in Paris. Large price tags have never scared Iger during his years at the helm, and it is too early to see the return on some of these investments or evaluate Iger’s strategies as a whole.
It is possible, however, with his predecessor. Since Michael Eisner left Disney in September of 2005, he has continued his entertainment career, albeit on a much smaller scale. He has funded a few TV shows, including the successful Netflix animated comedy BoJack Horseman, and his investment company recently bought the Portsmouth Football Club.
He left a mixed legacy at Disney. He no doubt saved the company from takeover and financial ruin in the ‘80s and ‘90s with the help of Disney president Frank Wells, bringing about the Disney Renaissance, revitalizing old assets, and creating and acquiring new ones. However, after Wells’ tragic death, Eisner let the Walt Disney Company slip into a similar situation to the one in which he found it. With Eisner having to fend off a potential Comcast acquisition, Disney was much larger, more diverse, and more poised for success than it was two decades prior. No better indication of Eisner’s fall was his relationship with those around him, such as Roy and Gold, and the endless list of executives that left the company because of him or refused to work with the company with him at the helm.
So what happened that reversed Eisner’s mightiest touch? It is hard to narrow it down to one event. The death of his partner, the failure of Euro Disneyland, the backlash over Disney’s America, the fallout with Katzenberg and Ovitz, the failure to expand the parks, the difficulties creating programming for ABC, and the series of box office failures in the early 2000s all played a role in the downfall.
Perhaps the greatest factor was not a single event, but an overall change in mindset. Eisner was a one-of-a-kind creative executive, as he told DisneyWar author James B. Stewart: “I’m not sure you’re going to see another chief executive in Hollywood like me. I think I’m probably the last of the creative types to run a company like this.” Eisner constantly stressed the power of creativity, how a quality, unique product is all that is necessary to be successful. He did this early in his reign at Disney and even before, when he was at Paramount, greenlighting lower-budget films with good concepts as opposed to high-budget, low-quality scripts. He continued to stress creativity even to his last days at the company, referencing his concern with Iger’s lack of creative abilities numerous times before his departure.
While he continued to mention the creative process and its importance, his understanding of it became twisted. At his final years at Disney, he either forgot or had difficulty implementing one of the most important aspects when producing and releasing a creative work: risk. Producing art is unpredictable and difficult; producing an artistic experience is even more so. When it is done wrong, whether on purpose or by circumstance, it can make risks seem like the enemy and make the safe option much more attractive. But when it is done right - when the balance between financial responsibilities and creative aspirations is found - it is beautiful, memorable, special, magical, profitable, and powerful. A world devoid of such creations is bland, and an artistic landscape full of copiers and imitators is not much better. These colorful, larger-than-life experiences become part of who we are as people, and it is crucial to continue creating them, regardless of the risk. It is everything, and it all comes from one thing: that one little spark of inspiration.
And despite forgetting it for a short period of his career, Eisner knew this…possibly better than anyone.
(Eisner gives a speech at a conference.)
EISNER Because mediocrity is what fearful people will always settle for. Again, think of a pointless painting. One bad dot cannot ruin the painting; you fix it and move on. However, if people are afraid to take risks with bright and bold colors, then the entire work will be very dull and very bland. If you want to discover inspired ideas, you simply have to accept that you will have to encounter more than a few that don’t make the grade.
(Credits.
“Thank you all for watching, supporting, and engaging in the art that I am privileged to create. - Kevin”)