Published: March 15, 2011 at 7:47 PMI think this is an aggressive business move by Blackstone. NBCUniversal has a new majority owner (Comcast). UOR is more valuable that it's ever been, thanks to Harry Potter. Blackstone's got the SeaWorld and Busch Gardens parks now, with Legoland coming online soon.
Why not sell its 50% in Universal Orlando at the top of the market to a new Universal owner, generating some cash that (one hopes) could be used to upgrade the SeaWorld parks? (Okay, I'm an optimist...)
If I were Universal, I'd certainly want to control all of my biggest domestic theme park asset. Harry Potter's going to be bringing cash for some time. Why share that with someone else? If NBCU can come up with the cash to make this deal, I think it has to.
No way I see this coming to the point where third parties get involved. Blackstone wants some cash, and it's going to get it.
Published: March 15, 2011 at 8:07 PMThink about this. Sea world p&e announced it would be restructuring debt. What better way to restructure than to get cash on hand. Its a move universal has to make otherwise it risks losing all right and licensing. You think WB won't use that as a reason to ask for more money for Potter? Its also a smart move for Comcast who has openly said they would like to dump the parks. With the entire control of the Parks it would make it easier to sell.
Published: March 16, 2011 at 2:35 AMBusiness Week adds another wrinkle: (Moody’s Investors Service said today in a report): "Director Steven Spielberg has a consulting agreement that entitles him to a portion of the parks’ revenue ... Spielberg may have the right to sell the consulting agreement to a third-party buyer, Moody’s said. Starting in June 2017, Spielberg has the right to terminate the consulting agreement and receive a one-time payment for its value or an ownership interest in the parks, Moody’s said."
Published: March 16, 2011 at 8:07 AMI can't figure out why they need Spielberg's involvement. There aren't a lot of his attractions in the park.
Unless Blackstone sells its share back to Universal, this property isn't worth as much to the new owners. It will slowly atrophy.
I can't see why Disney would buy it. They would only buy it to close it, but it will be at a high cost.
Published: March 16, 2011 at 8:23 AMAs has already been quoted : competition is key. Without it Disney might not have the incentive to move forward as quickly as it should.
Published: March 16, 2011 at 9:51 AMIf it gets to the third party sale of course Disney will be intrested. Then Disney will get to look at the books. It nice when you know what your competition is doing.
Published: March 16, 2011 at 10:11 AMI may be wrong, but GE and Comcast are publicly traded companies, which means all Disney would need to do would be to buy a single share of stock which would give them the means to "get a look at the books."
One would think that Disney knows the parks business well enough to make a fairly educated guess about what Universal's financial standing is ... assuming they even care that much.
Published: March 16, 2011 at 10:11 AMDisney would most likely run into anti trust problems if they would buy the park. They would also have a hard time to make sure negative expiriences with Universal parks dont spillover to the Disney brand. Universal isnt quite like Disney, the staff isnt as smilie face as Disneys (which i pesonally like, but many Disney fans wont), older attractions are not as well maintained (which i personally hate). Bad maintenance is typical for short term cash flow obsessed PE, things can only get better once Blackstone is out.
Published: March 16, 2011 at 12:54 PMBlackstone's investment in Universal Orlando is nearly 11 years old -- very long for P/E investments. So they are exiting to pay back investors. Has nothing to do with Sea World since that was bought by later funds (P/E firms are always raising new funds when they can that have relatively short lives).
Speilberg's deal with Universal was done when the first park was new and they thought they needed him to compete with Disney. He has an incredibly rich deal and is laughing all the way to the bank no matter what.
Disney already sees the books through the Marvel license. And you need a lot more than one share to see the books. No way Disney gets involved here -- they have enough exposure to Orlando.
NBC people have long run the parks with Blackstone largely in the background. They've made a bucket of money on the investment (they took a big dividend in 2004) and took a chance by agreeing to do Harry Potter (and adding back money to do so).
And Comcast has only spoken positively about the parks. Expect NBCU to take over or no deal to happen. No third party is coming in without NBCU/Speilberg/WB's approval.
Published: March 16, 2011 at 2:01 PMAnonymous: Disney already sees the books through the Marvel license. And you need a lot more than one share to see the books.
I respond: Yeah but (as I posted) with Disney's knowledge of theme park operations and the information in quarterly numbers the Mouse wouldn't need that much more than one share. Plus that gets Mickey a free annual report.
I wonder if Disney owns any shares of Comcast?
Published: March 16, 2011 at 3:06 PMIf that were true, every company would own one share of everyone else! Unless you own a majority of the company and are running it, you can read the 10-K on the SEC web site like everyone else. It just doesn't work that way. Disney can find out more about Universal at a locals bar than they could be owning one share of stock.