Monday, January 28, 2008
Tales Of The Orient...
On this day, twenty-eight years ago, the Industrial Bank of Japan along with several other banks made public that they were lending the Oriental Land Company $300 million to build a Disney theme park.
I know a lot of people are confused when they realize that the Tokyo Disney Resort is not owned by the Walt Disney Company. A Disney theme park not owned by Disney? How can that be?
Business being what it is and all, a number of events happened to create this very unique situation in the Disney World. Let's start where every story starts.
Back in the late 1970's Walt Disney Productions(now known as the Walt Disney Company) was building a little theme park we like to call EPCOT. Now, even though Walt had passed from this world for over a decade and there was, at times and in areas of the company, a lack of direction, some areas of the company still focused on a great deal of attention, detail and quality to the parks. EPCOT was costing the company millions and millions of dollars in cost overruns as it moved toward completion(the final bill would be over a billion dollars in 1982 dollars, friends). Now around this time a company known as the Keisei Electric Railway Company was also having financial difficulties in Japan. Through their real estate holding company, known as The Oriental Land Company they just happened to own a piece of land near Tokyo's harbor and came up with the idea of getting Walt Disney Productions to build a park there. Knowing the Japanese love of Disney characters, the company thought it would be a great way to get out of debt and what better way than getting the Mouse to build a park in the land of the rising sun. Well, when they approached the company, Disney said no. EPCOT was costing so much money that the company couldn't afford to finance such a venture.
Not to be deterred, Keisei Electric Railway Company and its partner the Mitsui Real Estate Company, the two companies that created the Oriental Land Company in 1960 deciced to have the OLC make Disney a very enticing offer. Within a short amout of time the OLC hammered out an agreement with Walt Disney Productions that seemed like a great deal for the cash strapped rodent. They wouldn't have to put up a penny. The Oriental Land Company would build the park and in return for Disney licensing out it's characters and allowing the Japanese company to use the Imagineers, Disney would get a 10 percent royalty on all admissions to the park. They also received a 5 percent royalty on all merchandise and concessions(This would be similar to the deal agreed upon to expand the park into a resort and Second Gate). Seemed like a winner for Disney. It incurred no financial risk and reaped the benefit of the park should it be a success. And there was a good chance of that given Japanese love of the Mouse. The close proximity to Tokyo was also a great comfort since the park would be near an extremely large population. It would be equivalent to Disney building a park on the harbor in New York City. There would be that many people within a very short distance.
And so the foundation for Tokyo Disneyland was created. Tokyo Disneyland opened up in 1983 and has since gone on to become the most visited Disney theme park in the world. By the time the OLC got around to deciding to expand on their success and turn this one park into an entire resort, well over 17 million people a year were going through the turnstiles.
That is where we will pick up next time...
If you would like to read more about the origins of the Oriental Land Company then get a copy of "The Prince of the Magic Kingdom" by Joe Flower.