City wants a new deal: Hong Kong Disney sends billions of dollars back to US parent company while reporting losses
Lawmakers told theme park needs to pay between 5 and 10 per cent of its revenue to its US parent as royalties every year, meaning a possible HK$3.37 billion since 2009
The government – the biggest shareholder in Hong Kong Disneyland – has been urged to renegotiate what critics call an “unfair treaty” with Walt Disney after it was revealed for the first time that the theme park needs to pay between 5 and 10 per cent of its revenue to its American parent as royalties every year.
This means the Lantau-based park could have paid between HK$1.68 and HK$3.37 billion to the California-based conglomerate since it started releasing financial figures in 2009, the Post has calculated – despite recording losses in eight of its 11 years.
The Hong Kong government, which holds 53 per cent of the park’s shares, was pressed by lawmakers last month to disclose details of its financial agreement with Walt Disney – especially the amount of royalties and management fees paid.
“The royalty rate charged by the Walt Disney Company on Disney resorts outside the United States is largely the same at 5 to 10 per cent of revenues,” according to a Legislative Council paper submitted by the government.
Tourism Commissioner Cathy Chu Man-ling told members of Legco’s economic development panel on Monday that the terms the city got were not “inferior” to those for Disney resorts elsewhere.