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Disney Official Speculates About Buying Universal Orlando

Disney's CFO told Reuters that the company would take a look at buying Vivendi's theme parks... if the price were right.

From Mike Duchock
Posted August 9, 2002 at 10:02 PM
There is a short story in today's Orlando Sentinel about a possible Disney buyout of the Universal Orlando properties.

What could this mean for the industry? A major player in the theme park world suddenly bought out. Disney having almost NO competiton in Central Florida. Disney buses on I-4 shuttling visitors back and forth.

It isn't like Disney to buy existing parks, they prefer to develop their own. However, I believe this could be a win-win for both companies. Vivindi is looking to dump its entertainment properties and Disney is looking to grab a firmer hold on the tourism market in Florida.

Can you think of a better way?


Comments in chronological order. Most recent at the bottom. Scroll down to respond.

From Anonymous
Posted August 9, 2002 at 10:21 PM
I think it is a great idea

From Harrison David
Posted August 9, 2002 at 10:29 PM
Competition is good. I think if Disney buys Universal, the monopoly would hurt Everyone.

Prices would go up, layoffs could occur, and the parks might not add new attractions as we, the paying customer would like.

I read somewhere a few weeks ago that General Electric/ NBC was looking into buying Universal. This is a rumor, however, it would be a good move on GE's part, as they could possibly give Disney a run for their money.

A good example to think about here with Disney buying out Universal... A year and a half ago, the World Wrestling Entertainment Group bought out rival wrestling company, WCW. Wrestling fans thought it would make the wrestling shows better... however, they have gone downhill.

I know wrestling and Theme parks are not the same thing, but it's just a comparison in the entertainment industry.

I guess we'll just have to wait and see if Sea World will be the only non Disney Park in Orlando!

From Kevin Baxter
Posted August 10, 2002 at 2:42 AM
Never happen. I listed all the reasons here and I don't feel like typing all that again. But I think an important point that I made over there should be expanded on here:

Steven Spielberg directed "Jaws," "ET" and two "Jurassic Park" movies while producing the other. He was an executive producer on "Twister," both "Men in Black" movies, "Shrek" and all three "Back to the Future" movies. What do these movies all have in common? They make up about a THIRD of the attractions in the Universal parks!

Add to that all the rides Spielberg was a consultant on and I think the man would have far too much interest in what happens to those parks to allow Disney to have them. It has been rumored that DreamWorks wants to build a theme park. Well, IF the parks are sold separately from the media portions, THEN I would be less than surprised to see DreamWorks throw their hat into the ring. Spielberg has his movies there. His partner, Jeffrey Katzenberg, HATES Disney, so I'm sure he would be in on it also. Furthermore, Barry Diller is kissing some serious French butt, so if he doesn't buy the parks, which company do you think he would encourage Vivendi to sell them to? Disney can say all they want about WANTING to, but I think the deck is stacked too much against them.

From Anonymous
Posted August 10, 2002 at 6:08 AM
Yes it is a great idea, I still say it too. Disney and Universal are practially the same, the only thing different is the attractions! I would be great for disney to buy Universal!

From Anonymous
Posted August 10, 2002 at 6:37 AM
Disney to Buy Universal Studios, Great thats all we need,Universal to have cheesy rides like small world and micky mouse running around everywhere.

Don't get me wrong I like Disney I think there parks great, but I think it should leave UsF alone.

From Anonymous
Posted August 10, 2002 at 6:47 AM
I think that Disney buying out USF would be a good thing because the could go into the teen times they could develop new rides and it would be very cool

From Anonymous
Posted August 10, 2002 at 6:47 AM
I think that Disney buying out USF would be a good thing because the could go into the teen times they could develop new rides and it would be very cool

From Anonymous
Posted August 10, 2002 at 7:45 AM
There might be something to the Speilberg post.If Disney is really thinking of buying the parks, my guess is the mouse is running scared. Odd the mixed message. They say Universal is no threat, so why would they be interested in a white elephant? Time for Disney to fess up. I hope Universal stays out of there hands.I don't want to lose a Spiderman ride and have it replaced by a character greeting spot.

From Anonymous
Posted August 10, 2002 at 8:04 AM
oh, yea if Disney buys Universal they are not going to get rid of Spiderman!

From Shane Falcone
Posted August 10, 2002 at 9:12 AM
Shockwaves throught the Theme Park industry. I think it'll be good. But, a theme park might half to go go. Why. Universal Studios and MGM are the same with Disney-MGM only much better. If Disney can do this then they can get ride of the MGM agreement and put some Universal attractions in there. I mean Universal Studios doesn't have a lot of attractions.

From Corey Taylor
Posted August 10, 2002 at 9:31 AM
Please Disney buying Universal would be a big mistake. First, I will like to comment on some of the anonymous readers. Mickey/Spider-Man no comparison. Disney is a family park, Universal is not. The Disney stock is already hurting buying Universal they would have to down grade their stock. Secondly, Disney has no thrill park and I would imagine if this would happen there would be some angry citizens. Can we say protest/riot. Finally, if anyone is to buy Universal I would prefer it to be GE/NBC (Universal will benefit) Or the Dreamworks company. And that is final. Disney has some great parks but buying out Universal wll never happen.

From Robert Niles
Posted August 10, 2002 at 9:49 AM
Hold on a minute, folks.

First, Disney's CFO spoke of Vivendi's entertainment assets in general. That includes theme parks, but also films, studios and music assets.

Second, Disney would need to offer something to Vivendi in return for any assets. Like money or stock. Unfortunately, Disney's stock is in the tank right now, and Vivendi likely wouldn't accept it as part of any deal, since Vivendi trying to pump its stock price by selling assets. Taking on another ailing stock wouldn't help do that.

Okay, then. How about cash? Trouble is, Disney doesn't have much on hand. And its credit rating is getting cut, hurting the company's ability to borrow any.

In summary, Disney couldn't raise the capital to buy Universal Orlando now even if it wanted to. And I'd argue that Disney wouldn't want to.

As Kevin pointed out, owning Universal's parks without also owning the film assets they promote wouldn't do Disney much good. But let's not forget the political implications of this, either.

Universal Orlando isn't part of Reedy Creek. Buying it would force Disney to go through Orlando and Orange County zoning and planning whenever they want to make any changes or additions to the parks. And since Disney would then be working with local governments on park planning, I'll betcha a lot of people in Florida would then question why Disney would need Reedy Creek anymore.

Trust me, Disney does not want to go there. And Orlando's city government doesn't want to see Disney increase its dominance in the local economy. There's long-standing distrust there.

This deal would force Disney to abandon what little liquidity it has, mortgage its future at high interest rates, and bring to head a simmering political battle between the company and Central Florida politicians--one that could result in the dissolution of Reedy Creek.

All to get a couple of theme parks that promote non-Disney films.

I know a lot of people around here don't like Michael Eisner. But, believe me, he ain't that stupid.

Barry Diller or Steven Spielberg will have control of Universal Orlando loooooong before Mickey Mouse does.

From Daniel Williams IOA Fanatic
Posted August 10, 2002 at 10:03 AM
Well... Look on the bright side. At least now the IDrive light rail might get the go ahead...

From Kevin Baxter
Posted August 10, 2002 at 2:27 PM
That's a good point. Would a potential sale of UO increase if Light Rail connected the two Universal properties? I would have to think yes. Right now, the Lockheed property has little potential. Sure, Universal could build and shuttle people back and forth, but along I-Drive this would be worse than being bused around WDW. Universal NEEDS that Light Rail to make this work. But if Disney got a hold of Universal (WHICH IT WON'T!) I couldn't see a Light Rail line EVER happening. Because Disney would demand it head out to WDW also and Orange County is having enough problems just getting it on I-Drive!

From Anonymous
Posted August 10, 2002 at 6:16 PM
Disney sux. They would ruina great park in ioa by turning it kiddie. Ifn they bought universal it would royally suck

From Steve Moore
Posted August 11, 2002 at 5:44 AM
This would be a bad thing for the visitors.

At the moment Universal and Disney both have great parks but they are also individual in theme,Style,Look etc.
If Disney owned them all then inevitably all the parks would become more similar and thus less attractive to visitors who want plenty of variety in the parks.

Steve

From Carey Lynn Holtsclaw
Posted August 11, 2002 at 2:05 PM
Like Robert Said, Disney is in No Financial Condition to take on the Universal Assets.
For the most part, you all are putting speculation before the fact.
Why don't we start considering the Busch rumors that are causing an uproar around Orlando, that they might be interested in UO.

From Kevin Baxter
Posted August 11, 2002 at 9:01 PM
Well, like it has been said many times, I don't think the parks will be sold separately from the movie studio. First, there is all that Universal content in the parks. Synergy, synergy synergy! Second, the parks would be too small a portion of Universal to NOT buy as part of a package. The movie, television and music divisions make up well over 80 percent of Universal. So what is a few extra billions? Especially when you consider how stable the parks and CityWalks are compared to the unstable media portions. Profit is the only important thing in these business deals and the Universal parks ALWAYS provide it, even in bad years.

I think the most likely outcome is Barry Diller buying ALL of Universal, with DreamWorks buying it in a distant second. NBC/GE is a major longshot. Disney buying ALL of Universal would only happen in a parallel universe. Disney being allowed to buy ONLY the Universal parks would only happen if pigs started flying in that parallel universe.

From Ronald Schettino
Posted August 11, 2002 at 10:33 PM
After reading the article, I see that Vivindi is planning on (or thinking of ...) selling *all* of its entertainment industry. Not just its Florida property. And, Disney "has the borrowing power to make such a purchase." I see the only other company (in this field) large enough for this type of purchase would be AOL. Universal also made a big mistake this season when it decided to release too many children's/family films and swamped movie-goers with too many choices (most ended up choosing Disney fare in the long run -- after all it costs nearly $60 for a family of four to go to the movies these days). One other item the article did not mention was Sony pictures. Owned by Universal, Sony has led the pack of profitable film for the past few years in a row. Universal theme parks are, after all, designed to coincide with their film franchise.

BTW -- Helium filled, mylar pigs sort of fly. I've seen one over Europe during a Pink Floyd concert.


From Anonymous
Posted August 12, 2002 at 6:48 AM
Ugh, perish the thought.

It's not going to happen anyway. Both companies stocks are in the sh*tter and can anyone say "anti-trust issues?"

From Anonymous
Posted August 12, 2002 at 8:28 AM
More likely that Busch, Cedar Fair or Paramount will buy Universal Orlando, although Six Flags can't be ruled out, Six Flags have a massive debt to pay off, buying UO would mean major problems with the banks.

Disney will not buy UO, for several reasons:

1. They own a massive themepark complex in the region, down the road.

2. Its Anti-Competitive, i.e. monopolistic

3. Universal Orlando will be sold off last, Universal Hollywood will be the first to go, why because of lack of space.

4. Vivendi, cannot sell stakes in the entertainment division without prior knowledge from shareholders, i have not been told, i'm a shareholder.

5. Universal Orlando makes hefty profits, especially this year, with the no-go coaster projects

From Mark Fairleigh
Posted August 12, 2002 at 9:34 AM
There are reasons why monopolies are generally seen as bad in this country. The major one being a lack of any incentive to improve the product. Disney buying Universal would be a disaster for the fans of Universal. I think they need to clean their own house before thinking of buying their cross-town rival and ruining it too. I've said that a healthy Disney and a healthy Universal would be great for the consumers. Disney owning their major competitor would do nothing to improve Disney and may very well have Universal stagnating.

From Kevin Hanaoka
Posted August 12, 2002 at 9:42 AM
How's this crazy scenario? Disney currently has a license to distribute the old Spiderman cartoons. What happens if in all this turmoil at Universal, Marvel decides to license out more of its library to Disney? Cut to 12 months later when some of IOA's concepts are sold to Disney in a fire sale by Universal. Disney has the Amazing Spiderman and Incredible Hulk demolished with the purpose of recreating them at their struggling California Adventure theme park. Dr. Doom's Fear Fall is redone a la Acrophobia. Of course, the dopes at Disney have no idea what to call the park now (Disney's Hodge Podge). But the park will now have two coasters, a dark ride and a much better free fall ride.

From Kevin Hanaoka
Posted August 12, 2002 at 9:58 AM
Oh I forgot to mention. I think this is why the Disney CFO refers to "assets" and not a complete buyout of Universal.

From Ronald Schettino
Posted August 12, 2002 at 10:35 AM
>> 4. Vivendi, cannot sell stakes in the entertainment division without prior knowledge from shareholders <<

Um ... That's not true. Law permits these actions without prior knowledge as long as it proves beneficial ... i.e. foreclosures and the like.

Also, I had mentioned earlier that I would think AOL to purchase Universal over Disney, I had not thought of Paramount (which is owned by VIACOM -- third largest entertainment conglomerate under AOL and Disney) to also get into the picture.

As it stands, if Universal entertainment *is* having the difficulties Vivindi claims, it *will* most definitely sell. After all, Vivindi purchased Universal after their 'Sensurround' days almost bankrupted the whole company.

-scam p


From Kevin Baxter
Posted August 13, 2002 at 4:11 AM
Sensurround?? HUH? Vivendi bought Universal in the middle of 2000. That was the year that Universal Pictures had higher box office than any other company. The only problem with Universal at the time was the billion-plus-dollar debt that building IOA created.

From David Roberts
Posted August 13, 2002 at 8:43 AM
What about Dreamworks they have been wanting to build a studio for a long time if they own the studios and theme parks in a partnership agreement with another studio this would make it easier to purchase and give the theme park another boost as they could have a smaller version of their california Animation Studio on site Like Disney.

From Ronald Schettino
Posted August 13, 2002 at 3:19 PM
Kevin, Kevin, Kevin ... Yes, 'Sensurround' almost brought the company down. The cost added to making the films (Earthquake, Midway, Battlestar Galactica and Rollercoaster) did not add too much to their overall production and/or distribution costs. However, Universal *paid* to have the decoding equipment (FM converters) and MASSIVE speaker systems installed (and maintained) in more than 2000 theaters world wide. The ensuing lawsuits over (long term) structural damage to theaters (mainly Showcase Cinemas and General Cinemas) virtually never ceased.

Although, Sensurround was GREAT fun, it did quite a bit of damage and was annoying to those in the next theater over. You can experience Sensurround on some of Universal Studios' current attractions.

At the time when Sensurround was throwing its shockwave through Universal, they had just revamped their Studios Tour and had added a few more "attractions." It took nearly twenty years and several threats of bankruptcy before Universal pulled itself out of the hole they created. Universal Pictures Company Inc. was sold while the selling was good.

-scam p

From Kevin Baxter
Posted August 13, 2002 at 6:17 PM
I remember Sensurround. But that had NOTHING to do with Vivendi buying them. Seagram bought them a few years before Vivendi did and Universal Pictures was doing quite well back then also. No business in America goes almost bankrupt for a 30-year period, which is what you are talking about.

From Joe Lane
Posted August 14, 2002 at 10:35 AM
Speculation and rumors are cool sometimes, but they can be a dirty thing--this is no exception.

Disney won't buy Universal. I just don't see it happening. There are too many 'what ifs' and 'chances' that it just doesn't seem worth the hassle. Spielberg is so invloved with the parks and with Dreamworks volunteering Shrek, I can see Steven and Katzenburg teaming up to snag the parks, and frankly, I think that'll be the best possible outcome.

So long as Spiderman and the Hulk live, I'm happy.

From Kevin Baxter
Posted August 15, 2002 at 1:52 AM
More on Vivendi here. This is the LATimes online so you will have to register for free to read it.

Basically, it tells about Vivendi's worsening debt problems and how they plan to sell off chunks of the company to get back into the black. Disney is mentioned, as is Viacom, but the article doesn't put much effort into those rumors.

The article states the most likely outcome will be Universal NOT being sold at all, but just becoming its own public company again with Barry Diller at the helm. This makes total sense considering how spectacularly the film division has done for the past several years. It has posted a 38% gain in revenue this year. The parks have posted a 7% loss so far, but that is only in revenue and I'm not sure how the Royal Pacific figures into that, if at all.

Universal Music is the weak link here, having dropped 28% in revenue. The article claims Vivendi may look into selling that portion but believes there won't be buyers for it.

Still, the Universal side of things made almost $700 million dollars in the first half of this year. I don't see Vivendi selling off something that makes them about $1.5 BILLION a year.

From Anonymous
Posted August 15, 2002 at 8:43 AM
Ok, again you dont know what your talking anbu like always. Universal music is very productive, and though has dropped this yearstill profits tremedously. It cant lose money. I mean theres really no investment and it has just about every major performer, so it is a good asset. Also, the reason the spin off versus ta buyout, is because of the economy there not many buyers out there and thoe who are, are looking for deals not product at face value. By spinning it off and getting the stock value this will most likely help the debt of vivendi more than what most buyers are willing to pay.

From Joe Lane
Posted August 15, 2002 at 8:50 AM
Hey, Kev's a good guy--he knows what he's doing 99.5% of the time, alright? Give the guy a break, geez...

From Daniel Williams IOA Fanatic
Posted August 15, 2002 at 11:41 AM
If you read what was stated it was that revenue had dropped compared to last year, not that they weren't making any money!

From Kevin Baxter
Posted August 16, 2002 at 3:43 AM
Thanks, Joe, Daniel and Shane too, I guess. ;-) If anonywuss would have actually read ALL the words in my post, everything I stated was what the ARTICLE SAID. I didn't make that stuff up. And Daniel was exactly right, REVENUE was down. If UMG didn't make any money so far this year, revenue would be down 100%! That is plain and simple math, which YOU didn't figure out, yet I'm the one who is always wrong. WHATEVA!

But that doesn't mean the UMG is flying high right now. Other articles claim UMG looks so much better than other music companies because Universal kept buying and buying smaller ones. Analysts predict this revenue slide to continue.

PS - At least I'm not afraid to post my name with my comments.

From Anonymous
Posted August 17, 2002 at 8:33 PM
First of all, to all those people who said that Disney sucks: they are wrong. They probably don't have any kids and ,therefore, have no reason to criticize or even go to Disney. Disney would never buy out Universal because they wouldn't even have the money to. I think that it is better with the competition. If Disney did buy out Universal, though, I disagree with the belief that they would turn it into a "kiddie park." They would probably leave all the universal rides there and just continue with its theme.

From Anonymous
Posted August 18, 2002 at 7:54 PM
I don't mean to be offensive, Shane. But you probably don't enjoy Disney because it's mostly for kids and you don't have kids. You have to go into Disney with a kid's point of view. All kids love Disney and probably most don't even like Universal. There is no reason for you to even go to Disney.

From Robert Niles
Posted August 18, 2002 at 10:42 PM
Hey, I used to love going to Disney even before I had kids. My favorite theme park trip of all-time was a kid-less trip to Disneyland.

A great theme park shouldn't be just for kids, or just for adults. Anyone should be able to enjoy it on their own level.

From Kevin Baxter
Posted August 18, 2002 at 11:20 PM
You also didn't point out that your kids like the Universal parks more than the Disney ones. And they are VERY young!

ALL kids don't like Disney. I'm guessing here, but I don't think Shane has reached adulthood yet. And we don't even want to get into that whole "Disney is supposed to be for kids" stuff. Disney parks are supposed to be for EVERYONE. Disney doesn't seem to be doing as well with teens as Universal and Universal clearly doesn't do as well as Disney with younger kids. Then there are kids who love BOTH. So you can't generalize.

From mark redfar
Posted August 19, 2002 at 2:24 AM
I am geting sick of people saying disney sucks.On a recent 4 day visit to disney landparis i had one of the best times i have ever had at a theme park. Disney put there all into all of there rides and nobody else creates such an atmosphere that people walk around acting goofy with silly hats and all .Disneyland paris on the other hand is so much better than magic kingdom in florida.

From Robert Swinarski Jr
Posted August 19, 2002 at 4:46 AM
Disney's execs recently sent an email to cast members regarding the rumored buy of Universal noted in the Orlando Sentinel. Basically, it read that Disney was not seriously considering a buy of Universal, but had just requested the perspectus, which is a typical move in any industry when a rival is selling any portion of it's assets. Basically, they wanted to see what was for sale and what would be included in such a sale, and what price range was being looked at for those items. As noted above, there would be little reason (or ability) for Disney to go ahead with a buy of this magnitude (if they hadn't bought ABC, I'm sure it would be more possible). No company in it's right mind would sell the Universal Parks piecemeal, it would drive the value of the remaining parks (and the sold parks) down too far - the big ticket item in this sale is the "synergy" of the name brand and the potential to create more profit using the Universal brand items to open more attractions based on the brand.

From Anonymous
Posted September 25, 2003 at 5:47 PM
I believe Disney has the potential to buy Universal (entire Company) but they just don't want to. People that for no goor reason are "Anti Disney because Disney is too large" will be upset and won't visit anything that is Disney owned. But that's not the main reason Disney has, its just Disney doesn't want (my opinion) to look like there going downhill by buying other parks for their own survival. Disney would rather get large and bring down Universal. Don't get me wrong, but I think IOA at Universal is a great park. And I can't say this enough, I work at Disney and Universal IS NOT Disney's main compeition, its AOL Time Warner. Disney spends more money on media than on their parks, I think any leftover money goes to Disney parks after media, and Universal is vise versa. Disney (FYI) owns more than 1/4 of the major channels on TV and Miramax. ABC, FOX, LifeTime, and about 10 others.

From JP parking Guy
Posted September 25, 2003 at 7:37 PM
Wow, Disney has warped your mind. Big U now has the best television programming with NBC. Even though Iwatch more abc shows. NBC is just better in the rankings,

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