The following article is based on rumors from two sources. This article should be read as a potential glimpse into the future but is not intended for absolute, objective fact. Please enjoy the following speculative report:
Update 1:35 PM EST: Overlord DVD YouTube Channel is covering this same rumor about the Chinese Disney Parks. We highly recommend watching. If you’re not subscribed over there, it’s a great resource for rumors and leaks!
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Guests could be seen returning to parts of Shanghai Disney Resort on Thursday though the theme park itself remains closed. For China, it is a bit of propaganda that supposedly proves to its population that the “Zero COVID” policy is robust and working. For The Walt Disney Company, however, it is a continuing step in a process of frustration that has led to Disney allegedly reevaluating its investments in Chinese real estate and physical properties.
Co-owned by The Walt Disney Company and Shanghai Shendi Group, Shanghai Disneyland is not due to receive any major expansions or investments any time soon. The same is essentially true for Hong Kong Disneyland — a theme park resort that once was part of a democratic sovereignty, now absorbed through political force by the Beijing government. In both cases, the theme park resorts are more or less controlled by the Chinese Communist Party. Their management is infiltrated with CCP members, Disney only owns a portion of the theme parks, and any wrong step could inevitably result in the full capture of the theme parks by China. It is a difficult position for Bob Chapek and his Disney Company… one that former CEO Bob Iger put them in.
“Disney is uniquely suited for success in China. We didn’t just build Disneyland in China. We built China’s Disneyland.”
— Robert Iger, Former Disney CEO
But that was before a global pandemic, before relations between the US and China frayed, and before China took over Hong Kong with stated intentions to do the same for Taiwan. Now, with companies bailing from Russia over the war in Ukraine, corporations like Disney are looking at the real possibility of a situation in which they’ll have to divest their interests more than expected should China take similar actions against Taiwan. Though it would hurt the bottomlines of many global corporations to have to do so — and we’re not fully convinced they even would — there are few companies as vulnerable to such a situation as Disney which owns two theme parks there. The theme parks are worth many billions of dollars, but even more importantly, if Disney were to attempt pulling out, their intellectual properties would likely stay. Mickey Mouse might be forfeited to China.
In Russia, the process was rather simple for companies like McDonald’s. Just sell the restaurants, drop the arches, and leave the small percentage of Russian revenue behind:
The repurposed sauce packets weren’t the only sign of rapid turnover under the restaurants’ new owners. Staple items such as burgers, fries and drinks were reportedly served in plain white packaging, while customers who ordered their food to go were given their owners in brown paper bags.
McDonald’s stores around Moscow reopened on Sunday under the new name “Vkusno & tochka,” which translates to “Tasty and That’s it.” The restaurants are also using a new logo and branding following McDonald’s exit from Russian in response to the invasion of Ukraine.
— Thomas Barrabi, NY Post
But even with something so simple as selling its franchised locations in Russia, McDonald’s is finding that all goes smoothly. The restaurants are continuing to sell Big Macs, in defiance of McDonald’s, with little means for the global chain to seek legal action in a Russia that is very hostile to American companies.
The situation for Disney would be far worse if they tried to get out of the China theme parks they built. Fears inside the company are that if they try to switch to a licensing-only agreement, elements within China could have Mickey Mouse appearing in communist garb. If that occurred at the same time that China was waging war against an innocent nation, the global ramifications of such imagery could be devastating. Disney is already struggling with its domestic image, polling having shown that the company’s perception is dropping precipitously.
Axios Harris Poll Shows Disney Popularity Plunging
Despite all of this, there may not be much of a choice. Disney has been forced to sit on the sidelines watching their Chinese properties closed for even a single case of COVID. Guests and employees have been forced through invasive medical checks while locked inside the park because one other person on property had a positive result. This is no way to run a major theme park. But there’s no arguing with communism and Disney is subject to the whims of government officials. So what is Disney to do as relations between the west and China continue to deteriorate?
Today in 2016 Shanghai Disneyland Park, the first Disney Park on Mainland China, opens to the public pic.twitter.com/nqUlPKNatw
— the painter flynn (@thepainterflynn) June 16, 2022
What a different world we live in today versus six years ago…
During 2020, rumors swirled that Disney had sought a plan to divest their interests from China in regards to their parks. That’s no surprise: companies often prepare plans for detrimental situations they need to have ready. But a source for this site reports that those plans may be back in the minds of Disney executives. Consider that even in their most recent quarterly earnings report, Disney management admitted the huge hit they were taking from Chinese parks being closed, as well as dismissed the harm they’re taking when movie after movie is rejected by Chinese censors. So it should be of little shock that Disney would look for a way to sell much of their interest in the Chinese parks to the Shendi Group while maintaining some sort of licensing agreement. It would likely need to be approved by the Chinese government, but it’s far better to begin working in that direction now rather than waiting until a missile hits Taiwan and war (or even World War III) has begun.
Nothing is set in motion just yet in terms of action. According to my source, things are still just in a planning stage. But this is something I find to be more credible-than-not when it comes to whether or not it’s going to happen. As much as Bob Iger may have thought a Disney World style resort in a communist country would work, Bob Chapek and Susan Arnold have a situation now that needs to be solved. They already have a template in the agreement for their Tokyo park where the Oriental Land Company runs that version of Disneyland. The difference with Japan and China is that there’s no real concern that Japan might do something which makes Disney regret its investment within the company.
What does a company do when their billions of dollars of investment can be used as a cudgel to force the company into positions that harm them everywhere else in the world? That may be the question on many of Disney’s C-Suite minds over the next months, and possibly years.
So what do you think? Share your thoughts with us in the comments below and tell us if you think Disney might be willing to drop their interests in China to switch to a licensing agreement. For all the news that should be fun, keep reading That Park Place!
