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Disney vows not to let up at home

Euro Disneyland opens in suburban Paris in April, but Walt Disney Co.'s top executives assured shareholders Tuesday that the entertainment giant's Central Florida tourist attraction will not be lost in shadow of its new cousin.

"We're not going to be letting up here at Walt Disney World," said chairman Michael Eisner at the company's typically upbeat annual shareholders meeting, which started with a parade led by Mickey Mouse.

The company had an "extremely difficult" year, Eisner said, but was still able to declare a four-for-one stock split. Disney shares closed Tuesday at $146.50, up $3.50 in the wake of the split. If shareholders approve, the split will be effective April 20.

Eisner's assurances come as Florida tourism officials fret that Europeans will lose interest in crossing the Atlantic once Disney opens a newer version of the Magic Kingdom on April 12 in France. Three years later, a copy of the MGM/Disney Studio Tour will open next door.

The industry is sure to get even more antsy when Disney's massive publicity machine cranks up the hype this spring for the company's newest attraction.

"If anything, the increased exposure of Disney in Europe long-range is only going to enhance Europeans' familiarity and interest in coming to Florida to visit Walt Disney World in Florida," said Richard Nunis, chairman of Walt Disney Attractions.

Disney is counting on a repeat of its joint venture park in Tokyo, which actually helped lure more Japanese to the original Disneyland in Los Angeles year after year.

Indeed, Disney has been making its park a familiar sight among Europeans for three years by weaving it into the company's television programs there. The strategy is the same one Walt Disney originated in the mid-1950s for Disneyland.

Disney now has a regular Disney Club children's show playing in 10 Western European countries. Walt Disney Presents is now a weekly prime-time hour in four Eastern Bloc republics. And corporate joint venture ad promotions are adding tens of millions of dollars to tout Disney's arrival on the Continent.

In Florida, Walt Disney World is coming off a recession-plagued year in which attendance dropped 13.3 percent. The high marketing costs of luring crowds in slow times depressed theme park profits 31 percent. In the first quarter ended Dec. 31, Disney attendance was still off 3 percent, analysts said.

Disney executives have seen only a few hints the recession may be ending.

The three Florida parks will get some attention this year. Splash Mountain, a log flume ride, opens in the Magic Kingdom this fall. Sunset Boulevard, a new theme area at MGM, opens this year.

About 3,300 moderately priced hotel rooms ($85 to $104 a night) will be added to the 10,500 on Disney property.

But the long-promised Russian pavilion at Epcot Center has been delayed by the breakup of the Soviet Union. And Eisner said the 1993 start of Celebration, a 5,000-unit residential complex, would be put off if the economy does not improve.

Half of Disney's overall earnings come from theme park revenues, which were off 5 percent in 1991. A batch of hot films at year's end, such as Beauty and the Beast and Father of the Bride, boosted the company's financial performance in the first quarter.

The first-quarter performance was the first sign of an uptick in more than a year. Several analysts saw the results as a sign of the old Disney magic. They converted sell or hold recommendations to buys. The company's stock soared.

And the recession, Vogel worries, has shown Disney is vulnerable to economic downturns that could undermine long-term profit growth. "Disney is still very much a cyclical stock that has probably seen the worst of the cycle for now," he said.

The stock split, Disney's first since 1986, was greeted by more than 30 seconds of applause from shareholders _ by far the biggest outburst of the two-hour meeting.

Eisner later conceded shareholders only get a "psychological" lift from stock splits. Stock splits are considered an affirmation a company's stock rose sharply, then maintained a higher price range.

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