Disney to Start Work on New $300-Million Theme Park in Florida

Walt Disney Productions made good Monday on its promise to launch a movie production facility and studio tour in Florida with the announcement that it will break ground for a $300-million facility before year-end.

Disney officials also disclosed that they have obtained rights to use themes or excerpts from the vast film library of Culver City-based MGM/UA Entertainment Co., which includes such classics as “Gone With the Wind,” “The Wizard of Oz,” “Rocky” and the James Bond films. The park will be called the Disney-MGM Studio Tour, although MGM will have no financial interest in the venture.

The Disney announcement could sound a death knell for plans of Los Angeles-based MCA Inc. to build its own studio tour and sound stage facility in Orlando. Many industry executives and analysts have voiced skepticism about the survival of two similar public attractions in the crowded Florida theme-park market. MCA, which operates the Universal Studios Tour in Los Angeles, first proposed a Florida version of the tour in 1981 but has said it will not proceed without a financial partner.

Disney Chairman and Chief Executive Michael D. Eisner declined to disclose the terms of the deal with MGM other than to say that Burbank-based Disney will have rights to the MGM themes “in perpetuity” so long as it pays an annual flat fee.

No Decision at MCA

MGM/UA Vice President Arthur Rockwell also declined to divulge financial terms but said the Disney fee would generate less revenue than the company’s annual licensing of film properties to pay-television networks.

“I can’t imagine that MCA is going to proceed,” said David Londoner, a securities analyst with Wertheim & Co. in New York. “I can’t imagine that it would make economic sense.”

But at MCA’s Los Angeles headquarters, MCA President and Chief Operating Officer Sidney J. Sheinberg indicated that no decision has been reached and said he had no “additional reaction” to the Disney announcement. Two months ago, when Disney first disclosed its decision to build a studio tour and facility at Walt Disney World, Sheinberg accused Disney of trying to sabotage MCA’s own theme park plans.

As reported in May, MCA said it would build a $290-million Florida studio and tour if it could secure financing from the Florida Retirement System Pension Fund. MCA sought a $150-million loan to be secured by a mortgage on the Florida property and also a $175-million investment by the fund in MCA’s motion picture production over a five-year period.

The pension fund was forestalled from the investment in movies, however, when the Florida Legislature failed to authorize a broader range of discretion for the fund’s managers. MCA accused Disney of lobbying against the bill, but Disney denied it.

E. J. Yelton, executive director of the $8-billion fund, said Monday that the pension fund could proceed with the $150-million loan for the studio tour and is awaiting MCA’s reaction to proposed changes in the deal.

Financial Options

Disney officials announced its plans Monday at a Tallahassee press conference, enlisting both Florida Gov. Robert Graham and a brass band for the occasion.

In a telephone interview afterward, Eisner said that, although Disney has not decided how it will finance the project, it has the option of borrowing from banks, making a public offering or using its internal cash flow to build the new facility, which will be located on Disney property south of Epcot Center.

Eisner said initial plans call for the construction of four sound stages and at least one “dark ride” through a pavilion, where the history of the motion picture industry might be enacted and illustrated by full-size, activated mannequins. Eisner said that, although Disney has the right to use excerpts and props from MGM films, the company is unlikely to build an entire pavilion around any single film.

“We’re not going to have a thing called the ‘Rocky Pavilion,’ ” he said. Eisner said tourists will also be able to see Disney employees working on animated film projects and said Disney hopes to have an attraction featuring the training of animals for motion picture and television performances.