In 1979, Walt Disney Productions reported income of $114 million on revenue of $797 million. Although the company made less than that in the fiscal year, it was also spending about $1 billion to build EPCOT Center, the grand effort to rescue Walt Disney's last dream.
At Walt Disney World, its operations, including hotels, recreation, admissions, merchandise and food were bringing in about $370 milion a year, with attendance of about 14 million people. There was only one theme park, The Magic Kingdom, and operating expenses were high. Costs for EPCOT Center, which were originally estimated to be several hundred million dollars, were ballooning.
It made sense, then, that EPCOT Center would take a very successful page out of Walt Disney's creation of Disneyland. Remember, back in 1953-55, Disneyland cost more to build than Disney's company had. So, it sold sponsorships. In return for exposure in what was promising to be one of the biggest tourist attractions ever, companies would cover many of the costs for their ride, show or attraction. In addition, they could have some sway over the content of the attraction. It was a brilliant concept, one that was borne out of desperation but grew into something of a cottage industry. Today, Disney is hardly alone in having a "Corporate Alliances" department, one that primarily ensures that companies like Coca-Cola and Siemens are happy with what they're getting for their money -- and if they're not, to find someone who will be.
If it was an exciting, new and lucrative business a half-century ago, today it's much more difficult. Marketing has become ubiquitous (come on, there are even marketing messages on bananas, for crying out loud!), and it's increasingly difficult to persuade a large corporation to pony up tens, if not hundreds, of millions of dollars to fund a theme-park attraction.
The benefits are obvious. Consumers get to interact with your brand, they see you as a leader, they trust your name, they associate you with something they enjoy.
But 50, 20, even 15 years ago, it wasn't commonplace for consumers to willingly wear t-shirts with your brand name, to spend hours at your online site, to target your message so directly to exactly the consumer you want. You can spend $30 million on a Super Bowl ad that reaches a certain demographic, directing them to your website (where you completely control your message), which prompts them to spend five days playing a "viral" online game that ceaselessly conveys your specific marketing objective.
Or, you can pour $100 million over 10 years into a theme-park ride that reaches a certain percentage of 12 million annual guests, half of whom probably aren't "geo-targeted" to your specifications (that is, they don't live in the country or region in which you do most of your business), and are a mix of demographic targets -- men, women, children, senior citizens, Americans, Brazilians, solvent, insolvent, educated, uneducated, professional, blue collar ... well, it's hard to tell. Plus, the overriding message they're receiving is, increasingly, about Disney, not about you. No longer does Disney want to give over a 20-minute experience to the virtues of Exxon, MetLife or AT&T -- it continues to infuse its own messaging into the experience. "Buy more Disney. Buy more Disney now."
Well, then, it's easy to see why it's not easy to get a sponsor.
And here's the question: Does it matter?
Twenty-six years after EPCOT Center opened its gates, worrying a financially wobbly company and partly leading to the end of many careers, Disney has annual income of $3.3 billion. The Parks & Resorts division generated revenue of $6.4 billion, and had income of slightly less than one billion dollars -- $946 million. That's a far cry from the weak, desperate company that opened EPCOT Center.
In 1982, when EPCOT Center opened, there was no way Disney could afford to shoulder the costs on its own. It absolutely needed the involvement of major corporations, and the beauty is that the park's original design quite literally depended on that involvement. Those companies, once the pinnacle of American industry (AT&T, GM, Exxon, GE, United Technologies, Nestle), are in most cases shells of their former selves. They have grown, or shrunk, changed, merged and morphed so many times that in many cases it's not even easy to really know what they do anymore. Kind of like Disney itself.
But the concept was clear: Those major American corporations would have the opportunity to show the world the virtues of American ingenuity and innovation, and would shine a light down a path toward a better tomorrow.
Obviously, EPCOT Center has changed.
It's not clear, really, exactly what Epcot means to be, but one thing is clear:
The place is falling apart.
OK, maybe that's a tiny exaggeration, but have you noticed the weather-beaten wooden slats that form a rarely (ever?) used stage at the south end of the Fountain of Nations? Or the almost-creaking Audio-Animatronic figures in the Universe of Energy? Of course, you've seen the (literal) shell of a building that used to be the Wonders of Life, and hopefully you've very recently read about the 20-year-old film in the run-down theater at the end of Maelstrom in the Norway pavilion?
The commonly used excuse that Disney lobs out is that these attractions (save Fountain of Nations, which perhaps could use one) now lack sponsors. And lacking sponsors, it is difficult or impossible to maintain the attractions and improve them.
I don't buy it, not for a second.
In 1955, 1971 and 1982, sponsors were critical to getting theme parks built. Disney couldn't afford it.
But today, we're talking about the same company that spent $19 billion to buy Capital Cities/ABC Inc. -- and that was 13 years ago.
We're talking about the same company that spent tens of millions of its money (in conjunction with Walden Media) and then lost it on Prince Caspian.
We're talking about the same company that is probably still trying to realize a return on its $3 billion investment in Fox Family (now ABC Family).
We're talking about the same company that is pouring $1 billion into the failed Disney's California Adventure, hoping it will make a silk purse out of a sow's ear.
You're telling me that a company that realized profit of nearly $1 billion in its theme parks division alone can't afford to make an investment of $400 million or so into the only Epcot in the world?
Of course, Disney can say that Epcot doesn't really need help -- plenty of people visit it just like it is.
But consider this: For the full year in fiscal 1982, Walt Disney Productions reported that attendance at Walt Disney World was 12,560,000 people. One year later, attendance soared to 22,712,000. (Back then, Disney used to report Florida and California attendance figures. What a lovely concept!) That means EPCOT Center brought in 10,152,000 visitors in its first year.
Last year, Epcot's attendance was estimated at 10.9 million. That's an increase of 7% over its attendance 25 years earlier.
On one hand, the argument can easily be made that if attendance has essentially held steady all these years, people must be satisfied.
On the other -- there's no real reason to go to Epcot. The technology isn't particularly exciting, the rides aren't particularly interesting, there's no comprehensible "theme," and other than drinking your way around the world, well, what else is there, really?
Here's what I'd argue: EPCOT needs a massive infusion of innovation, creativity, futurism, global awareness and compelling content. And Disney will have to fund it.
But, Disney says, we can't do anything without sponsors.
Wrong. Twenty-five years ago, that was true.
But a lot has changed in a quarter of a century, and it's time for Disney to suck it up and start taking responsibility for this extraordinary, neglected theme park.
Sponsors or not.