Euro Disney

Forbes today posted an AP article saying that the operating company that runs Euro Disney says its sales growth slowed sharply in the 3rd quarter.  Everything was still up however, which is good.

I've often wondered about Euro Disney and how the company is setup.  As most of you know, Disney doesn't really own any of the parks outside of the US.  Tokyo Disney is run purely as a license to The Oriental Land Company, Hong Kong Disney is a co-owned entity between Disney and the Hong Kong government.

And that leaves Euro Disney, which is owned and operated by the largest conglomeration of companies I think I've ever seen.  If you want to see, click here.  When you get to that page, click on the greenish tab marked 'Group Overview'. 

And there my friends, you have it.  Pretty no?

Disney controls Euro Disney through 4 limited liability companies (Société par actions simplifiée or S.A.S.) and one holding company (incorporation type not given).  That holding company in turn owns 100% of another S.A.S. company, which is the sole general partner in Euro Disney S.C.A.

Euro Disney S.C.A (Société en commandite par actions or S.C.A) is a holding company for all of Euro Disney.  An S.C.A. in France is a form of Limited Partnership. 

The Disney controlled holding company holds 39.8% of the outstanding shares and the public holds 60.2% respectively (10% of which it's noted are owned by Prince Alwaleed).  All of these share holders in effect appear to be limited partners. 

Euro Disney S.C.A. in turn, through yet another limited liability holding company, owns 82% of Euro Disney Associés S.C.A, which is the actual operating company for most of Euro Disney and the property manager.  The other 18% is owned by two of the original 4 limited liability companies I mentioned above, which also makes them general partners in the operating company.

Then there is EDL Hôtels S.C.A., which is 99.9% owned in turn by the operating company above (Euro Disney S.C.A), and operates most of the hotels and the Disney Village (the Downtown Disney of Euro Disney). 

One of the other 4 companies owned by TWDC is there nothing more than to be the gérant for the 3 main Euro Disney companies (which is presumably why TWDC shows Euro Disney debt encumbrance on it's balance sheets?). The gérant is responsible for managing the company in the companies best interest. 

Got all that? 

Well here is where it gets fun... 

Because none of these companies actually own ANY of Euro Disney apparently.

They own the operating companies.  All of the land, the parks, the shops and the hotels are owned by two finance companies which then lease them back to the 2 management companies for operations.  

The first finance company is actually a société en nom collectif (or a general partnership) between the last Disney holding company and the investors.  Disney owns 17% and the investors 83%.  This holding company is the actual owner of the Disneyland Park, and leases it to the operating company.  So these guys own the land and make money on the lease, plus whatever returns they get from any stock they might own. 

The second finance company has no direct Disney involvement and owns most of the remaining hotels and the Disney Village and in turn leases THEM to the EDL Hôtels S.C.A. we mentioned earlier.

Someone call my lawyer... 

No, on second thought, call my doctor. 

I have a migraine coming on.