MCA Takes On the Mouse : As its new theme park opens near Disneyworld, Universal’s parent is pushing big-budget plans for expansion in the tourism industry

“There’s our Skywalk, er Skyway,” MCA president Sidney Sheinberg said proudly, gesturing toward the glittering image of a futuristic escalator projected onto a screen in the company’s antique-appointed conference room.

“Starway,” whispered Ron Bension, president of Universal Studios Hollywood, the MCA-owned studio tour/theme park in Universal City.

“Starway,” Sheinberg repeated. “It must be a bad name if I can’t remember it.”

The Starway is a planned 900-foot long, light-bedecked moving walkway designed to scoop up park visitors at the top of the mammoth Universal City hill and gently whisk them to the valley below.

The Starway is just one part of a $200-million plan to completely reconfigure the Universal City attraction, making it less of a tour in the traditional sense and more of what MCA calls a “motion picture-based themed attraction.” Four movie-oriented experiences--including one that allows visitors to ride their bikes “home” with E.T.--will be added.

The changes at MCA’s Universal Studios Hollywood--which will be implemented over the course of the next two years--are just part of the picture. On Thursday, MCA will open its $500-million, 450-acre attraction Universal Studios Florida.

The idea, company executives say boldly, is to be as big as the Walt Disney Co., with parks, movies, toys and television shows all cementing the MCA/Universal name in the public consciousness. Plans also are in motion for facilities in Europe and Japan, and Sheinberg hints at more to come.

But ask them flat out if MCA is going into the theme park business a la Disney, the answer is no.

Still, the parallels are obvious: Disney opened its Disney/MGM Studio Tour in Orlando, Fla., last year. This week, MCA opens its movie park right down the road. The upcoming changes at MCA’s Universal Studios Hollywood--the word tour has already been deleted from the name--are intended to make Universal as much of a stopping point for local families and repeat visitors as Disneyland.

MCA faces extremely stiff competition from Disney in Florida, and in Los Angeles is limited by a sense among the public that Universal is a place to visit once, or with out-of-town guests, but not a park to frequent.

Universal’s success or failure will depend on a number of factors, according to entertainment industry analysts and executives, from changing public tastes and the logistics of getting around in crowded Orlando and Los Angeles to the sluggish economy and the depth of MCA’s pockets.

Can MCA catch Disney?

“Absolutely,” said Jay Stein, president of MCA’s recreation services group.

Not only does Universal plan to match its archrival in movie theme parks, Stein said, the company wants to take on Disney on its own turf--general-interest parks and tourism.

Visitors to Universal’s Florida park enter through a towering formal entry arch that says “Universal Studios” on it. Through the arch is a forecourt filled with California-style architecture meant to conjure up images of Hollywood bungalows.

“Those facilities contain ticket sellers and guest-relations offices and guest lounges and group sales--all the things you might find at a major outdoor recreation area,” said Barry Upson, head of planning and development at the Universal parks. “But it doesn’t look like (an outdoor recreation area)--it looks like a studio.”

Past the entry arch and faux office buildings is a set of sound stages. The ones on the left are real: perhaps “Murder, She Wrote” or a Nickelodeon children’s program is being filmed in one of them.

Straight ahead and to the right are buildings that look like sound stages but in reality are attractions.

In front is Ride a Cartoon, where a bright colored spaceship whizzes through a Hanna-Barbera toontown, running into a wall here, stretching way out of shape there, bouncing off a street corner or two before the whole thing comes to an end four minutes later.

E.T., which will be duplicated next year in Universal City, works like this, according to Upson:

“You are told in a pre-show hosted on film by Steven Spielberg that E.T.’s home planet in deep space is in trouble and in need of E.T.’s expert help. Your job as a visitor is to take E.T. home.

“You move through the queue in a forest, where story points are established that E.T. is in fact still being tracked by bad guys. Eventually you arrive at the loading point, where you and eight other folks climb on a flying bicycle. E.T. is with you in the basket and you take him home to his planet.

“You go through a series of jeopardy scenes before you leave Earth, and you go through deep space to his planet, which is sick. You and he miraculously restore the planet.”

Like Disney, MCA reclaimed its “planet” from hundreds of acres of Florida swampland.

And like Disney, MCA plans to integrate its operations: The company wants to make movies that work as attractions, and make television cartoons from dolls and toys that it sells in its Spencer Gifts stores.

“We’ve been studying this business for a good many years and we’ve got in our arsenal of creative concepts theme-park ideas that have never been tried before,” MCA’s Stein said, although he declined to elaborate. “Some of the ideas that are in our mill right now have the potential to be as big as Universal Studios Florida and as big as any of the Disney parks. The kind of size that I am looking for, I’d like to be bigger (than Disney).”

And with good reason. Americans spend more than $3 billion each year at theme parks, according to industry estimates. And of the 253 million visits made to theme parks in 1989, 44 million were to Walt Disney World and Disneyland. Disney earned $2.6 billion from its parks and resorts last year, the company reported.

“The advantage of theme parks is, once you spend the money, the capital expenditures, it’s ongoing revenues with good margins,” said financial analyst Doug Lowell, who follows entertainment stocks for the Los Angeles-based Western Group. “If you have good characters in your theme parks and good attractions, you’ll get the visitors.”

Thanks in particular to attractions like last year’s Earthquake and the earlier King Kong, Universal’s income from its Southern California facility alone has more than doubled since 1985, from $64.5 million to $142.9 million. By comparison, the company’s entire filmed entertainment division, of which the theme park is a part, saw its revenues increase by about a third in the same period, making the park a much larger percentage of the division’s overall budget.

Last week Universal Hollywood opened two of its new attractions for 1990. An American Tail, a whimsically designed, brightly colored, Spielberg-inspired attraction, includes a stage version of the life of character Feivel Mousekewitz, and a play area whose centerpiece is a 15-foot slide shaped like a banana peel and a maze of tunnels shaped like Swiss cheese.

The Back to the Future attraction features the mock electrification of a guest, who is struck by a special-effects lightning bolt--just as the characters played by Michael J. Fox and Christopher Lloyd were--and then appears to turn into a spark-encircled skeleton. On June 15, a new stunt show, the Riot Act, will be introduced.

With revenue from the new Florida park, an expanded Hollywood park and possible future income from facilities in Europe and Asia, MCA may earn 20% of its overall income from theme parks, said Alan Kassan, an analyst with Shearson Lehman Hutton. That would be an almost three-fold increase from the current 7%.

And Disney, hankering after the same set of leisure-time dollars, plans in the next five years to double the size of its own movie theme park in Florida, which has been highly successful since opening last year. The Disney/MGM Studio Tour is part of the 28,000-acre Disney complex at Orlando, which includes Walt Disney World and the futuristic EPCOT Center. Last year, Disney attracted 25 million people in Florida alone.

“The overall question for everybody is, is there too much capacity being put on stream and over too short of time?” said Harold Vogel, an entertainment industry analyst with Merrill Lynch and Co. in New York. “And the answer is, possibly. It’s too soon to know.”

A negative answer to that question could be exacerbated, Vogel said, if the economy continues to slow. If it does, leisure-time activities will be the first to disappear from consumers’ budgets.

For MCA, the most immediate question is whether the new Universal park can compete with the Disney/MGM park.

Roy Disney, co-chairman of the board of the Walt Disney Co., said that since the Disney/MGM park opened in 1989, it has attracted 25,000 to 26,000 visitors per day.

“We have been closing the parking lot for the studio tour usually between 9:30 and 10:30 (a.m.) every day,” turning away thousands, Disney said. “If you left the gates open and let everybody in that wanted to come in, it would be 35,000, I’ll bet.”

The overflow is likely to benefit Universal as the shut-out tourists move down the road.

“Until Disney doubles its capacity, there will be more than enough business for the two (parks) to split,” said analyst Kassan. “If there is a problem that is going to develop for MCA, it’s going to be farther out.

“The question is,” Kassan said, “four or five years from now, if Disney is at 10 or 12 million in capacity, will MCA be able to significantly grow their attendance from what should be 5 or 6 million the first year?”

In part to combat a perceived threat from Universal, Disney is selling four-day passes to its grounds, which include three theme parks, five golf courses and wilderness camp grounds, said Dick Nunis, president of Walt Disney Attractions. Tourists--who on average stay in Florida seven days, spending four at Disney World and three along the Florida coast a day’s drive away--tend to buy the passes because at $102 apiece they’re a better deal than the $31 it would cost to enter any one of the facility’s parks for just one day.

Ask Nunis if he’s worried about Universal and he just chuckles. “Oh, gosh, no.”

In expanding its already formidable presence in the market, Disney is putting about $700 million per year into capital improvements and the acquisition of new parks and hotels worldwide. It plans to add a new attraction to Tomorrowland at Disneyland in Anaheim.

Walt Disney World, Nunis said, is preparing to open a new hotel, with 2,350 rooms, 250,000 square feet of function space and a gala opening timed with the release of the Disney’s Touchstone Pictures movie, “Dick Tracy,” and attended by Warren Beatty and Madonna.

“We’ve been (in Florida) a long time,” Roy Disney said. “I think people are going to essentially come, see what they can see with us and if they’ve got an extra day or so go over there, but I don’t think they’re going to come down to see Universal.”

To counter that kind of thinking, MCA has sewn up the inside cover ads on the in-flight magazine of Delta Airlines--the “official” airline of Walt Disney World--for the next five years. Commercials are already running in cities from Detroit to Miami, hawking E.T. and Ride a Cartoon.

The company does not have immediate plans for expansion in Florida, but Sheinberg insists that MCA--no small contender with $3.4 billion in revenue last year--plans to keep up. “If we don’t develop further the recreational services business, whether or not it involves studio tours or other recreation services activities, then we’re just a bunch of idiots,” Sheinberg said. New attractions will be added regularly, he said.

All in all, according to analysts and industry experts, MCA/Universal has a fairly good chance of succeeding at head-to-head competition with Disney if the contest is limited to the two Florida movie parks: Disney/MGM versus Universal Studios Florida.

The contest may be less balanced, however, if Sheinberg decides to take on Disney as a world competitor, or even as an overall fantasy provider in Florida alone.

“Universal could be as big (as Disney) in the studio tour, but in overall theme parks there’s no way,” said analyst Vogel. “Disney is the dominant theme park in the world and will remain so--by a wide margin.”

“Disney has reached a point where many of their characters are universal, inter-generational, timeless,” said analyst Lowell. “Mickey Mouse is something shared with grandparents, parents, children, and will go on with generations. Universal’s rides are much more timely: Ninja Turtles, Night Rider, Miami Vice--those have to be changed, while Disney has the advantage of its characters going on and on.”

And Universal may find itself faced in both parks with a problem that has plagued it most acutely in Los Angeles: a serious lack of repeat visitors.

At Universal Studios Hollywood, where according to president Bension the majority of visitors are first-timers from out of town, the company has been tackling that problem head on.

The addition of attractions since 1986 has increased park attendance by nearly 25% since 1985, according to company figures, to 5.2 million visitors. And over the next two years, the company plans to cut the length of the traditional tram tour to just 20 minutes from two hours and add five new attractions.

The idea is to entice locals--who attend Disneyland an average of twice a year--to come back to Universal.

“The gospel according to me recently has been to really emphasize the children’s attractions,” said Sheinberg.

“The reason for this is very simple. I have a granddaughter, she’s 4 years old, and I end up spending a lot of time with her. And there are an awful lot of people like her, an awful lot of people like us looking to take her someplace. With deference to Disney people, who do an incredible job, nobody is going to go to Disneyland every weekend.”