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Reality-based business plan



With the grand opening of Disney's California Adventure (DCA) less than six months away, veteran Mouse watchers were startled in July when the Walt Disney Co. said it would build a third theme park in Anaheim.

A more prudent company would have held off making such plans public until they were sure their second project was popular. Not Disney. According to Disney's site: "The new park would evolve, with a first phase anticipated in 2003, and completion targeted for 2010."

Is the Mouse trying to draw attention away from DCA and its less-than-impressive set of attractions?

Well, sort of. But there's a more intriguing explanation. The company learned -- by watching Seagram struggle to turn its Universal Florida property into a vacation destination -- that two theme parks do not a resort make. Which is probably the real reason the Mouse opted to put its third California park on the fast track.

This was one of many lessons Disney -- and the rest of the theme-park industry -- learned from watching the liquor giant blow through $3 billion in an attempt to turn their I-4 parcel into a world-class vacation destination. Though the state-of-the-art Islands of Adventure park drove attendance at Universal Florida this year to record heights, Seagram still posted a $98 million loss on the project last month. It could be decades before Universal Florida finally gets in the black.

What went wrong? That's what the Mouse -- as well as Vivendi, the French communication company that's in the process of merging with Seagram -- wants to find out. Several factors had a huge negative impact on Seagram's plans for Central Florida.

Consider the confusing ad campaign: Remember that great set of IOA teasers Universal ran on TV last spring? You know -- the one where the triceratops chased the Frisbee in the park? Or the one where Spiderman and Doctor Octopus fought it out on the wing of a plane?

The hugely expensive ads were clever but didn't really say much. Worse still, they just seemed to confuse potential visitors. Seventy percent of those surveyed after this saturation campaign didn't recognize the Islands of Adventure brand name. Of the 30 percent who did, most thought Islands was a new attraction at Universal Studios Florida -- not a new park.

Add to this the confusing name initially given to the expanded resort: Universal Studios Escape. Little wonder that Seagram fired most of the Florida marketing staff it held responsible for that bungled campaign.

To clear up the confusion, Seagram rolled out -- at great expense -- a second new name: Universal Florida. It also sent out a second wave of TV commercials that hammered viewers with their "Two Awesome Theme Parks. One Great Vacation!" message. That seems to have done the trick. Seagram reportedly saw significantly higher attendance at both IOA and Universal Studios Florida this past summer.

Disney wants to avoid a similar identity crisis when California Adventure debuts in February 2001. That's why the company has labored mightily to create an ad campaign that emphasizes DCA is a brand-new park built right next door to Disneyland.

Toward this end, the Mouse hired Walter Afanasieff -- the producer of the Academy Award-winning theme to Titanic, "My Heart Will Go On" -- to create a theme song for the theme park. Tentatively titled "A Place in the Sun," this memorable ditty will be featured in a national TV ad campaign that should hit TV screens starting in January.

The other big lesson: Don't overbuild.

Truth be told, in order for the company to seriously compete with the Mouse in Orlando, Seagram felt it had no choice but to build something grandiose. But in OK'ing $3 billion worth of construction, Seagram head Edgar Bronfman Jr. was maybe putting too much faith in the catch phrase from Universal's 1989 release "Field of Dreams," that mystical baseball drama where Kevin Costner heard a voice from the cornfield say, "If you build it, they will come." But the only voices Seagram's management hears now are those of its accountants.

Disney -- having learned the hard way about what happens when you overbuild (remember Euro Disney?) -- was determined not to dig itself into the same sort of hole while expanding in Anaheim. The Mouse's goal from day one with its revamped Disneyland Resort was to make money. So CEO Michael Eisner and Co. kept scaling back the project till it became something that would effectively pay for itself within five years. DCA may not be pretty, but it's sure going to be profitable.

That's what makes this situation so ironic. Many have called IOA the best theme park built in North America in decades. Yet Universal continues to struggle to make a profit off the place. Then you have DCA, the most cost-effective (read: cheap) theme park Disney has ever built. That park is almost guaranteed to make money from the day it opens.

It's reminiscent of Richard Hatch's victory on "Survivor." These days, winning isn't about good intentions or doing your best. It's a matter of being shrewder and smarter -- doing whatever is necessary to come out on top.

That's why Richard wasn't voted off the island. And why Disney opted not to follow Islands of Adventure's business plan.

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