Disneyland and Disney World are suffering, while the company's soaring film operation is expected to overtake the theme park and resort division in profits this year.
Disney will report fiscal 1994 earnings this week, and doubts have been raised outside the company that Disney will maintain its 20% growth rate. Disney has insisted it will meet that goal, but when it notes sources of strength, movies like "The Lion King" and TV shows including "Home Improvement"-and not theme parks-top the list.
Disney plans to use advertising and new attractions to lure an older and more international breed of Mousketeer rather than its traditional base of young families.
"Disney has done a good job maintaining its domestic family business [for theme parks] but is under attack in the non-family and international market," said Drew Marcus, media and entertainment analyst at Alex. Brown & Sons, New York. "There are more vacation choices such as Branson [Mo.] and Las Vegas."
Disney won't reveal U.S. theme park attendance figures, estimated at about 41.4 million annually by Amusement Business. But company financial reports say visits in Florida and California are down due to a decline in international tourism and softness in southern California's economy. Published reports indicate visits to the Florida operations will total 28.9 million in 1994, down nearly 15% from '90, and international visits are down 22% for the year due to the weak European economy and crime concerns about Florida.
Among Disney revival efforts:
Disney's largest park-Walt Disney World in Lake Buena Vista, Fla.-plans to break TV spots beginning next month aimed at couples and empty nesters, The Orlando Sentinel reported. Disney's nearly $2 billion expansion plans include several adult resorts, a cruise line, a wedding chapel, a 100-acre sports complex, a water park with winter sports and an Animal Kingdom-theme park.
Disneyland in Anaheim, Calif., is also looking at new advertising and hopes to break ground in 1995 on Westcot, a West Coast version of its technology-and-education-focused Epcot Center in Florida.
The company ran aground on Disney's America in Virginia. Plans are on hold after vocal protests over the project's proximity to the Manassas Civil War battlefield and environmental concerns.
Euro Disney SCA's struggling Disneyland Paris, 40% company-owned after a restructuring, remains a drag on earnings and reputation. Its 8.8 million in attendance for the fiscal year ended Sept. 30 is down 10%. The park reported a loss of $353 million, though that was an improvement over the previous year's $1 billion loss.
Outside agencies will play a big role in turning the theme parks around. Disney hired Leo Burnett USA, Chicago, in September as its agency of record for Disney World, formerly handled in-house. This month, it tapped Saatchi & Saatchi Advertising, London, to produce a U.K. campaign to promote U.S. parks, especially Disney World.
Even the Disney Store has adults in mind in plans to expand from 335 to 600 stores worldwide by 1998. It recently opened a prototype Walt Disney Gallery in Santa Ana, Calif., which includes limited edition art, adult fashions and household goods with Disney themes. It's designed to compete with Warner Bros. Studio Stores.
Disney wants to work the same magic for the parks that it performed for the wildly successful animated films division, which enjoyed a rebirth in the 1980s.
The real earnings power at Disney today seems to be on the film side. "Aladdin," "Beauty & the Beast," "The Lion King" and "Snow White & the Seven Dwarfs"-on film, video and their accompanying consumer products-are expected to lead the company to record sales of $9.9 billion for the fiscal year ended Sept. 30, according to Alex. Brown & Sons.
Animation is where Disney's star still shines bright. "The Lion King" surpassed box office and merchandise sales records set by "Aladdin," which broke previous-year marks by "Beauty & the Beast." "Snow White & the Seven Dwarfs," released this fall on video, is also selling at a record pace.
But potential trouble also looms there after the August exit of Walt Disney Studios Chairman Jeffrey Katzenberg, widely credited with Disney's animation success. Mr. Katzenberg in October said he's forming a rival movie, animation, TV and entertainment company.
Disney continues to lag in live-action films. But the recent release of Miramax Films' "Pulp Fiction" could help Disney out of its slump, which has included recent disappointments like "Quiz Show."
"Disney continues to be the No. 1 brand in American entertainment," said Christopher Dixon, entertainment analyst with PaineWebber. "Every 6-year-old on the planet knows Mickey, `Aladdin' and `The Lion King.' The challenge is to demonstrate that [the theme parks are] not just for 6-year-olds."
Jeff Jensen contributed to this story.