Just how good was the Busch deal for Blackstone?
Published: October 7, 2009 at 9:53 PM
Let's compare the Blackstone/Busch deal to the most recent sale of a major theme park chain: Cedar Fair's purchase of the Paramount Parks from Viacom in 2006.
- sold for $1.24 billion
- $423 million revenue (2005)
- 12.2 million attendance (2005)
Busch Entertainment Corp.
- sold for $2.3 billion (with A-B eligible for an additional $400 million in BEC revenue)
- $1.37 billion revenue (2008)
- 23 million attendance (2008)
The Busch deal also includes significant branding: The Paramount Parks had to drop "Paramount's" from their names; the Busch Gardens parks will retain their names.
The Busch deal also includes the value "Shamu" brand, as well as a licensing deal with Sesame Workshop, so no attractions will be lost or have their names changed (save the already-shuttered Brewmasters' Clubs and the Clydesdales). The Paramount sale included no iconic character, forced Cedar Fair to rename immediately dozens of Paramount/Viacom-themed attractions and left Nickelodeon branding for certain kids areas for only three more years.
Let's not forget that the Busch theme parks almost certainly enjoy much higher per-guest spending than the former Paramount Parks.
So for double the price, Blackstone is getting double the attendance that Cedar Fair got, plus triple the
income revenue and valuable "intellectual property" assets. And that's comparing BEC's attendance and revenue during a global recession with Paramount's during the peak year of the recent financial bubble.
For the industry, the Paramount Parks deal consolidated the field, resulting in the loss of Paramount Parks' attraction design team and leaving theme park fans with one fewer choice for theme parks. The Busch deal leaves the existing BEC management in place, resulting in no loss of options for fans.
A common downside? Debt. Cedar Fair took on $2 billion in debt to finance the Paramount Parks acquisition, as well as to pay down previous debt. And BEC will take on about $1.3 billion in debt to fund this deal (with Blackstone providing the additional $1 billion).
But even on that count, BEC crushes Cedar Fair, with BEC taking on a debt burden roughly equal to its annual revenue, while Cedar Fair took on debt about double the annual revenue of the combined old Cedar Fair and Paramount parks.
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