Two years after opening, Walt Disney Co.’s Euro Disney theme park was bleeding money. In need of a bailout for the flagging Paris property, the company turned to an unlikely source: Prince Alwaleed bin Talal, a then up-and-coming investor and the grandson of the founding monarch of Saudi Arabia.
It was 1994, and the theme park now known as Disneyland Paris was on the verge of bankruptcy, stung by a European recession as well as self-inflicted wounds — including a ban on wine in a country famous for the beverage.
After months of negotiations with then-Chairman Michael Eisner, culminating in a late-night call from a satellite phone in the Arabian desert, Alwaleed agreed to buy about $300 million in newly issued Euro Disney stock, part of a pact that helped restructure the park’s debt.
It would be the first of several deals — including one earlier this year — between Disney and Alwaleed, a billionaire who is said to be among the members of the Saudi royal family arrested on Saturday in an apparent power consolidation by Crown Prince Mohammed bin Salman.
If Alwaleed loses control of Kingdom Holding Co., the investment firm in which he holds a 95% ownership stake, it could represent the loss of both a deep-pocketed investor and a powerful Middle Eastern ally for Disney.
In a statement posted on its website Sunday, Kingdom said it is continuing “normal business operations.”
“The executive senior management team affirms its full commitment to continue the company’s work, its commitment to its investors and shareholders, and affirms the support of the government of the Kingdom of Saudi Arabia,” according to the statement.
Disney did not respond to requests for comment.
Alwaleed, whose net worth is estimated by Forbes at more than $16 billion, built the beginnings of his fortune in Saudi real estate and construction. But he burst onto the Western financial scene in 1991 when he invested $590 million in New York financial giant Citicorp, now Citigroup.
Kingdom still has holdings in Citi but also has a vast and diverse portfolio that includes high-end hotels — the Plaza in New York and the Savoy in London among them — as well as stakes in Twitter, Lyft, 20th Century Fox, Apple and Motorola.
Citi aside, few of Alwaleed’s relationships with Western companies go as far back as his Disney connection.
After bailing out Euro Disney in 1994, Alwaleed came to Disney’s rescue again in 1999, when the Arab League threatened a boycott of the company over references to Jerusalem in an Israeli exhibit at the company’s Epcot Center theme park in Florida.
The prince intervened, arguing that such a boycott would be counterproductive and even contacting the late Yasser Arafat, then the leader of the Palestine Liberation Organization.
“I told him, ‘It’s not worth it. If you boycott Disney this will be seen as Mickey Mouse,’” Alwaleed told The Times in 2004.
A decade later, the prince again supported a Disney-led initiative at the Paris park.
In 2014, Alwaleed and Kingdom purchased 49 million euros’ worth of Euro Disney stock as part of a Disney-backed recapitalization of Euro Disney S.C.A, the publicly traded French company that ran Disneyland Paris. Kingdom maintained a 10% stake in the company.
The resort at the time had racked up years of losses, in part because of a large debt load that the 2014 deal reduced. The recapitalization also gave the resort $530 million in cash, some of which went to improvements and renovations.
The park’s performance began to rebound but fell again in 2015 after that year’s terrorist attacks in Paris.
This year, the two again had dealings as Disney sought to delist Euro Disney from the Euronext stock exchange. Alwaleed agreed to exchange nearly all of Kingdom’s Euro Disney shares for Walt Disney Co. shares, which allowed Disney to take full control of the park.
To delist the stock, Disney needed to hold at least 95% of Euro Disney shares. With Alwaleed’s firm holding 10%, Disney needed the prince’s participation.
As part of the takeover, Disney also plans to spend more than $1 billion on upgrades and debt reduction at the park.
Kingdom retains a 1% stake in Euro Disney. It’s not clear how many Disney shares Kingdom received as part of the deal or whether it continues to hold those shares.
Kingdom is not listed among Disney’s significant shareholders, meaning it owns less than 5% of the Burbank media giant’s shares.