Just how good was the Busch deal for Blackstone?
How good of a deal did Blackstone Group get in buying the Busch theme parks from Anheuser-Busch InBev today?
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.
Open thread: This is the overnight/early-morning open thread, for any news and rumors you've just got to share before your editor rejoins you in the LA AM.
In reading some of the stuff posted on the Orlando Sentinel website... food for thought.
Considering all you have written, Robert, this was not just a
To reiterate my post from yesterday: "PENNIES!"
The way the Paramount Parks and their "design team" were going, it wasn't the worst thing in the world that Cedar Fair lost them. I would much rather have a great coaster than a half-arsed themed ride. Also, the numbers for Paramount/Cedar Fair have improved a little since 05 despite the recession. They had a billion in revenue and 23 million visitors in 2008. A quick and crude average gives the Paramount parks at least those same numbers, although they are likely higher.
Given that Paramount's creative team included some ex-Universal Creative folks, I don't think the problem there was talent or vision, it was Paramout's diminishing commitment to the parks. You can have a great concept or design, but if your bosses won't fully fund it, it won't be that great.
Revenue is not profit. While BEC's revenues are triple the former Paramount Parks, feeding and housing animals and running parks year round costs plenty of money. It is doubtful that profit was triple. Net income and cash flow are the key indicators and those numbers were not in your comparison. BEC's performance may still be better than Paramount Park's on both counts, but it is impossible to truly compare the deals without all the pertinent numbers.
I think people have missed one of the biggest "gets" from this whole deal.
Fixed the flub in the article where I used the word "income" when I meant "revenue." Sorry about that. Having way too many idiot moments today.
If you do a story on the Marine Mammal angle, Robert, you should make sure you read George Millay's biography (that and Buzz Price's book, Walt's Revolution by the Numbers, should be required reading for any theme park geek).
You never got any jump in attendance with a mega coaster, because you never put in a mega coaster. Besides the debacle named Son of Beast, a few early rides like Flight of Fear (good by the way), Volcano, and Top Gun, what high ticket coasters were there? With the exception of a very few coasters in the chain, B&M, Intamin, and all the high profile wooden coaster companies ceased to build much of anything in the Paramount Parks. By the end of Paramount's occupation, Kings Island fans were practically begging on their knees for a new roller coaster to ride. Are coasters polarizing rides? Not necessarily. A stand up coaster with 7 loops? yeah probably. A sit down mega coaster like Diamondback? obviously not if you judge by the lines this year. Even if they are polarizing, a line to the back of the park should still send a signal that they are hugely popular and draw people. Some people don't like coasters and that's fine. That's what the other 200 acres of the park are for, building other attractions. I'm not saying that coasters are the end all be all, because they aren't. The Nick area was a huge draw, and one of the best kids areas in the business. Waterworks already existed at Kings Island when Paramount took over, so naturally the success of that model would translate to other parks in following years. There has to be balance and freshness though, particularly in a part of the country that celebrates the roller coaster and is willing to wait 3 hours to ride the newest one.
I have been meaning to do a book review of the Buzz Price book for months now. (I tried to get Buzz to agree to do an interview with me, but he's long retired and declined. One of my bigger disappointments in running the site, honestly.)
I would like to clarify something about the Marine Mammal Protection Act referred to.
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