Walt Disney is expected to increase its share of the cost of expanding Hong Kong Disneyland and to end up owning a larger stake in the theme park.
In documents submitted this week to Hong Kong’s legislature (Legco), Disney has agreed to an equal split of the $1.41 billion (HK$10.9 billion) expansion and upgrade of the park, though it currently owns only 47% of the facility. The proposal reduces the burden for the Hong Kong government by some $45.2 million (HK$350 million).
Disney will also waive variable management fees for two financial years. In return, the government’s ownership stake will fall from 53% to 52%, while Disney’s will increase from 47% to 48%.
The moves come after disquiet on the part of lawmakers that the park is getting deeper in the red and that the city is getting a bad deal. Legco is expected to discuss the proposals in a session on Saturday.
Disney will continue to earn fixed management fees, and it rejected calls by the government to adjust the formula by which they are calculated. In its October-to-September financial year, Hong Kong Disneyland lost $22.1 million (HK$171 million).