KUALA LUMPUR, Nov 27 – Casino operator Genting Malaysia gambled on upscaling an existing outdoor theme park of its own to one with an international entertainment brand name and has now failed miserably.
The end result is that Genting is likely to be embroiled in a costly lawsuit against Walt Disney Co and Twenty-First Century Fox Inc for some years, while its property that once hosted a fairly attractive theme park becomes an abandoned eyesore. The theme park is said to be at least 60% complete and was slated to open next year, after many delays.
In an article by The Hollywood Reporter yesterday, it was reported that Genting Malaysia is suing Fox and Disney for pulling out of the agreement to sponsor the Fox World theme park at its popular hillside casino and resort property.
Genting Malaysia is seeking over US$1 billion (RM4.2 billion) in damages, claiming Disney does not want to be associated with its gambling business as the Hollywood giant moves to finalise its acquisition of 21st Century Fox’s entertainment assets.
It is believed that Genting Malaysia had invested US$750 million in the park, which was due to open by 2020.
In 2013, Fox entered into a licencing agreement with Genting Malaysia to develop the first Fox-branded theme park in the world.
Unlike Disney, which owns its parks in part or in whole, Genting Malaysia would own and finance the park completely, with Fox getting a cut of the revenue from retail, food and beverages.
Hundreds to lose their jobs in Genting?
As a result of this latest development on the ill-fated first-ever Fox World theme park, all the Malaysians recruited since 2016 for the theme park are likely to lose their jobs.
There had already been talk of possible downsizing and cutbacks on medical coverage, among other things, with the expected blow to Genting’s bottomline from the new taxes the government was introducing from next year, as announced in the Budget 2019 speech by Finance Minister Lim Guan Eng on November 2.
With this new announcement on the failure to launch the theme park anytime soon, it is expected to be even tougher times for staff at Genting and its extension, Resorts World.
This is because the Genting board and senior management had expected the theme park revenue to cover the shortfall to its profits from the tax increase.
Some of the staff working in the former Genting theme park, which had existed for many years until its closure in September 2013, are still around and redeployed temporarily, but a new round of recruitment for the new Fox World theme park had also started in 2016, according to sources.
Most new recruits for theme park said to be Malays
This is especially because most of the hundreds of new recruits were said to be Malays to help keep a healthy staff ratio from the different races and maintain the theme park as an attraction for Muslims to visit the hill resort which hosts the only casino in the country.
Ultimately, Genting could lose more than just money from this theme park deal going bust.
Its reputation could be badly hurt, let alone investor confidence in its Malaysian operations.
It is therefore not surprising that investors and speculators have pushed the company’s share price further down today, taking it lower than the 2018 lows the company’s share price hit earlier this month following the announcement on the increase in casino and gaming tax from next year.