Pondering Options

Euro Disney. Considered by financial analysts to be one of Disney’s biggest losers, the park continues to mount loses. The entity is burdened with two plus billion in debt, fifteen times gross average earnings, and carries higher labor costs compared to sister parks. Economic theory would say losses to date are sunk. You’re never going to get that money back.

So, cut your losses.

Send Mickey back to America.

Yet, Disney continues to pour money into the project. Why?

Well, once you close the park the magic is gone forever. Tinker Bell won’t fly anymore. Captain Jack Sparrow can’t save the day. You’d never be able to walk through the gates and take the march down Main Street U.S.A either. Disney poured another billion plus into the park. Management wanted the option to keep telling the story. Long term, perhaps, that is a small price to pay.