Nov. 9 (Bloomberg) -- Walt Disney Co.’s planned theme park in Shanghai will do little to help open China’s media industry to overseas companies as the communist government restricts films, television and the Internet, analysts said.

Disney last week won approval from the central government to build its first mainland park in China’s richest city, after more than 10 years of talks. The venture may generate $5 billion of revenue annually and attract more than 80 million visitors, analysts at Janney Montgomery Scott estimate.

The success of the Burbank, California-based company contrasts with the failure so far of efforts by Rupert Murdoch and Sumner Redstone to enter the country’s media industry as China blocks exposure of its 1.3 billion citizens to outside influence. Disney, the owner of the ABC network in the U.S., still has no approval for a TV station in China.

“Disney’s park will mostly be a boost for its retail business in China, not media,” said Duncan Clark, Chairman of Beijing-based consulting firm BDA China. “The only way they could get this park in China is by keeping it separate from their media business.”

China’s government owns all the nation’s television channels and newspapers and imposes limits on foreign media companies, including allowing only 20 overseas films a year.

China censors material critical of the ruling Communist Party through control of publication licenses, state-ownership of TV and radio stations and by blocking access to Internet sites such as Google Inc.’s Youtube. Those restrictions led News Corp. Chairman Murdoch to say in 2005 that his company had hit a “brick wall” in China.

Universal Studios

Theme parks have also met with resistance. Vivendi Universal SA signed an agreement in December 2002 for a park in Shanghai with Shanghai Waigaoqiao Group Co. It was never built. General Electric Co., which acquired the entertainment company in 2004, is now building a Universal Studios attraction in Singapore.

Viacom Chairman Redstone said in July 2007 his company had held discussions with government officials from Shanghai and the central city of Changsha about setting up theme parks, which he called “a great business opportunity.” The company has yet to announce any agreements for one in China.

“The market is being opened more and more but media is a sensitive industry in China and any changes will only happen very slowly,” said Professor Ding Xueliang, who teaches courses on political, economic and social development in China at Hong Kong University of Science and Technology.

Disney’s Shanghai location will include a Magic Kingdom- style theme park with characteristics tailored for the Shanghai region, the company said in a statement.

Profit Boost

The park may cost $4 billion to $5 billion to build and take as long as five years to complete, Janney Montgomery Scott analysts Tony Wible and Albert Lui wrote in a Nov. 4 report. Once completed, the park may boost Disney’s annual net income per share by $0.07, the analysts estimated.

Some investors said Disney’s breakthrough may herald more opportunities in China for other media ventures.

“You should look for Time Warner, News Corp., Viacom and others to begin announcing China deals very soon,” said Porter Bibb, a managing partner at Mediatech Capital Partners LLC in New York.

News Corp. and Viacom executives weren’t immediately available to comment, spokeswomen for the companies said. NBC Universal spokeswoman Cindy Gardner didn’t immediately reply to an e-mail seeking comment.

Pudong Park

The Shanghai park will be 57 percent owned by China with Disney holding the rest, and will be built in Pudong district’s Chuansha area, Wen Wei Po reported. That’s about 27 kilometers from the financial district of Lujiazui. Alannah Hall-Smith, a Hong Kong-based Disney spokeswoman, declined to comment on the size of the park or the cost.

Chuansha county, under Shanghai’s jurisdiction, may need to relocate as many as 5,000 families to make way for the park, local residents said. More than 700 families in the county’s Qigan Village have been notified by the local government that they’ll need to move, they said.

The proposed theme park will also compete with Disney’s Hong Kong resort, which opened in 2005. Mainland Chinese require a visa to go to Hong Kong, which is a special administrative region of China. The Hong Kong park, Disney’s smallest, plans to spend HK$3.5 billion ($452 million) to add rides such as “Toy Story Land” and “Grizzly Trail,” to boost visitor numbers.

Disney’s third-quarter profit fell 26 percent to $954 million. Parks and resorts are Disney’s second-largest business behind media networks, contributing $2.8 billion in sales in the three months ended June. Profit for the company’s theme parks tumbled 19 percent in the period.

Drugs and Guns

Shen Dingli, deputy dean of Fudan University’s Institute of International Affairs in Shanghai, is among those who welcome Disney’s advent in the country.

“Every culture has good and bad parts and it’s only logical that we would want to only import the good parts of American culture, not the gun carrying and drug use,” he said. “Disney is good, healthy fun.”

Chinese artist Ai Weiwei, who helped design the Beijing Olympic Stadium, held a similar view.

“Introducing a little American culture will be a good thing for China,” he said.

For Related News and Information: See Geographic Breakdown of Disney Revenue: DIS US <Equity> PGEO G <GO> Compare Disney, News Corp. and Viacom Share Performance: DIS US <Equity> COMP NWSA.US VIA/B.US <GO> Most-Read Stories About China Today: MNI CHINA 1D <GO>

Last Updated: November 8, 2009 11:01 EST