We know — the on–again–off–again Disney Shanghai deal is getting kinda bawwwrrrriiiing — but latest news has it that the deal could include a major media component that would leave other media companies salivating and give Disney unrivalled access to the highly sought-after Chinese market:
The joint venture agreement would give Disney a huge advantage over U.S. media rivals by allowing it to bypass foreign film import quotas and summer and holiday blackout periods, as well as television censorship, both imposed by the central government.
While its rivals vie for the 20 slots allotted by the Chinese government each year to foreign films, Disney would be tasked with creating movies, TV and web fare to promote its brand, stories and characters to grow attendance at the Disney and Shanghai government-owned park, the documents show.
Two sources told Reuters that a legally binding agreement would be reached only after the Olympics and that current talks are focussed on potential funding and profit-sharing. At the end of the day, it’s all about the money and the Shanghai government ain’t going to give something without getting something back in return. It also wants Disney to know that it will remain firmly in control of the steering wheel at all times. Other juicy secrets in top-secret documents revealed by Reuters:
The documents call for Disney to receive a large stake in a joint venture that would manage the park. Under the joint venture, Disney would handle marketing and promotions in exchange for providing capital and technology.
The Shanghai government-led local consortium, including some of the city’s major developers, would provide land near the Pudong International Airport in exchange for its share.
The joint venture would be controlled by the city government, which would have the right to appoint the general manager and other senior positions, according to the same sources.
The agreement would give the joint venture the right to publish and distribute a Disney-branded magazine, and to produce animated films and television shows for local broadcast and cable TV that showcase both the Disney brand and the new park, the documents show.
The content of the magazine, movies and TV shows, and breadth of distribution would have to be approved on a case-by-case basis by the central government and relevant ministries and regulators under Chinese rules, the documents showed.
Disney also would get help from the joint venture in opening the Chinese market to its films and other programming, and in return would help distribute Chinese-made fare in the United States and other countries, the documents show.
The agreement also calls for the joint venture to authorize local manufacturers to produce Disney-branded toys in China and sell them internationally.
In the meanwhile, Disney has offered to refinance more than $300 million in commercial loans due for the bleeding Hong Kong Disneyland, which has also just been thrown a magic lifeline by Shenzhen. A pilot scheme is now being planned that will allow the millions of migrants working in Shenzhen to join group tours to Hong Kong without having to first obtain travel permits from their hometowns.
Photo by Heather Garland