Can Disney turn its theme parks into ‘Avengers World’?

Avengers fans at the movie's premiere last month.

Walt Disney Co’s design team has increased its efforts to bring the Marvel superhero team “The Avengers” to the company’s theme parks after the film’s smashing success, the head of Disney’s parks unit said on Thursday.

Speaking as Disney unveiled the final attractions of a $1 billion investment to boost its laggard Disney California Adventure park, Tom Staggs said he intends to bring “The Avengers” characters to the Anaheim resort and other parks outside the United States.

“We were hard at work on attractions using Marvel characters previously, and that work has only intensified given (the film’s) great success,” Staggs, chairman of Disney’s parks and resorts division, told Reuters in an interview at the park’s Golden Vine Winery.

“The Avengers” has sold more than $1.3 billion worth of tickets around the world. Executives and Disney’s designers, called “imagineers,” are still working out how to bring characters like The Hulk, Iron Man and Captain America to the parks. “The setting has to be right, the story has to be right. That takes a fair amount of time,” Staggs said.

Disney is contractually restricted from bringing Marvel characters to its parks in Orlando, where they are licensed to Comcast Corp’s Universal Studios.

The new 12-acre Cars Land at California Adventure, based on the hit 2006 Pixar movie, and other expansions should help the company lift its profit margins in the parks business to the 20 percent range, Staggs said.

A decade ago, theme parks were the company’s most profitable unit, with operating margins of 18 percent. This year, margins slid below 13 percent as the economy sputtered and the company spent to overhaul the California park and expand elsewhere, according to Disney’s latest SEC filing.

Staggs said margins at the parks and resort divisions had improved in the past couple years. “As we look at our business going forward, there is no structural reasons we wouldn’t see our margins head back to the 20 percent targets,” he said.

The parks unit’s earnings have been on the upswing over the last year. For the six months that ended in March, operating income rose 26 percent to $775 million, accounting for 18 percent of the company’s total.

The parks’ importance extends beyond their direct money-making capacity. Rides, shows and strolling characters provide marketing muscle for Disney movies, TV shows and merchandise.

Disney California Adventure has suffered from poor attendance since its 2001 opening adjacent to the larger Disneyland in Anaheim. Just 6 million people visited in 2011, compared with 16 million at Disneyland next door, according to the Themed Entertainment Association trade group.

In remaking California Adventure, Disney added a moving shooting arcade ride based on Pixar’s “Toy Story” and a ride based on its “Monsters, Inc.” film, along with classic Disney elements including a “Little Mermaid” ride.

For Cars Land, Disney designers traveled along historic Route 66 and brought back ideas including foods such as dill pickle popcorn that is served at the park. The highlight is Radiator Springs Racers, a roller coaster-style ride in which convertibles speed past mountain and desert landscapes reminiscent of the film’s setting.

At a lavish opening ceremony this week, stars of Pixar movies and Disney-owned ABC’s “Modern Family” hit comedy walked the red carpet on the new Buena Vista Street, an area designed to look like the art deco Hollywood that Walt Disney saw when he arrived in the 1920s.

Staggs said the revamp would raise attendance and increase visitors’ time at the resort, but he declined to estimate by how much. “We’re thrilled with the creative result and also very confident in what it will do for the business,” he said.

Analyst Doug Creutz of Cowen & Co, who rates Disney “neutral,” said the uncertain economy remains a challenge for the parks that Disney will have to grapple with to boost attendance by a meaningful number.


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