Shanghai municipal government will sign a preliminary agreement Saturday morning with leading European media conglomerate Vivendi Universal SA to build a US$870 million theme park in Pudong, upsetting industry speculations that Disney would build the first big-name theme park in the city.
However, Disney, which is committed to a US$3.1 billion theme park in Hong Kong, said yesterday it will "continue to look throughout China for theme park opportunities," according to Irene Chan, regional director of Walt Disney Asia-Pacific Co.'s corporate communications department.
In the agreement to be signed today, Vivendi, Shanghai Waigaoqiao Group Co. and Shanghai Jin Jiang Holdings Co. Ltd., will jointly invest US$870 million in the project, in which the French company will invest less than US$100 million, according to a report in the Asian Wall Street Journal.
Construction will be completed as early as 2006, the report said. The park will be built on a basis of classic Hollywood films, such as Jurassic Park and E.T., and its entertaining facilities will be renovated according to Universal film studio's new productions.
The city government's Information Office refused to comment on the report, but did put out a notice for today's signing ceremony and press conference.
The city's top leaders and Glenn Gumpel, president of international business affairs for Universal Parks & Resorts, are expected to attend the signing ceremony.
The move comes as company officials at Vivendi are trying every means, including selling assets, to turn around the company, whose shares have fallen 74 percent this year.
Officials at Vivendi couldn't be reached for comment yesterday.
"The advantage of theme parks is that it's cash on the barrel; people pay to get into theme parks," said Andres Collier, an analyst at CLSA Ltd. in an interview with Bloomberg. "The question is: Can these media conglomerates turn these theme parks into brand names and extend into other areas. We don't know yet."
Work will start on Disney's theme park in Hong Kong, covering 310 acres, in January and it will open as early as 2005.
"Two Disney parks in the country could be a possibility," said Irene Chan, but she added that in all likelihood the company's second theme park in China will not be built before 2010.
In July, the company declined to comment on reports it was in talks to build a Disneyland in Pudong, which could put the two parks only a few miles apart.
(Eastday.com December 7, 2002)
