Warner Bros. is up for sale. So what does that mean for the theme park industry?
Warner Bros. has been providing IP for theme park attractions for over a generation. At one point, under previous ownership, Warner Bros. controlled the Six Flags chain of amusement parks. Six Flags continues to license Warner Bros. properties in DC Comics and Looney Tunes to this day. Warner Bros. has also licensed theme parks around the world, including the Theme Park Insider Award-winning Warner Bros. World Abu Dhabi on Yas Island.
But now Warner Bros. Discovery, the company that was formed when Discovery Inc. acquired Warner Bros. from AT&T a few years back, is looking for a buyer. Reportedly, Comcast, Netflix and Paramount Skydance all have submitted bids for the company. Comcast and Netflix are said to be interested only in WB’s studios and streaming applications, while Paramount Skydance reportedly is interested in buying all of Warner Bros. Discovery.
Comcast owns NBCUniversal and therefore the Universal theme parks. They've been a partner with Warner Bros. for years, most notably in licensing The Wizarding World of Harry Potter franchise for its theme parks around the world. But Paramount and Netflix are involved in location-based entertainment as well. So what would Warner Bros. being sold to one of these three companies mean for theme park fans?
Paramount, before it was acquired by Skydance, famously exited the theme park business when it sold off its Paramount parks to the old Cedar Fair chain, which is now part of this new Six Flags Entertainment Corporation. Yet Paramount has licensed its IP to parks and attractions around the world. Warner Bros. has been more aggressive with location-based entertainment, operating its own chain of studio tours around the world, including Warner Bros. Studio Tour Hollywood and the Warner Bros. Studio Tour London in Leavesden, England, which is where the Harry Potter movies were filmed.
Netflix also has gotten into location-based entertainment recently, with the opening of Netflix House attractions in some major cities in the US. Netflix also has licensed its IP in the past to Six Flags and Universal theme parks for their after-hours Halloween events.
But the big player in the theme park business is Comcast. A Warner Bros. sale to Comcast could trigger a cascade of events that would affect pretty much every major player in the global theme park industry, including Disney. So how would it all work?
If Paramount Skydance succeeds in buying Warner Bros., it's hard to see how much would change significantly in the theme park business. Perhaps the new owners from the former Skydance Media might show more interest in location-based entertainment than the previous owners of Paramount did, but that's hypothetical at this point. Basically, you just have the merger of two big media companies, meaning less diversity in the media landscape.
Netflix perhaps would be a little more interesting as an owner, because one would presume that the extensive Warner Bros. archive would end up on Netflix, which would give it much greater visibility among consumers, at least in the United States, but nothing is given.
Now, if Comcast gets control of Warner Brothers, I think you would see some major changes in the industry. Obviously, this would allow the Universal theme parks to continue licensing Warner Bros.’ Harry Potter franchise pretty much in perpetuity. The original license for Harry Potter had an end date on it, which reportedly has been extended with the expansion of Potter into new theme parks, including Universal Orlando's new Epic Universe. But if Comcast controlled Warner Bros., it's hard to imagine that this license would not become permanent.
Another change would be the availability of more Warner Bros. horror franchises for Halloween Horror Nights. Warner Bros. has stopped licensing its IP to Halloween Horror Nights in recent years. But if Warner Bros. and Universal come under the same corporate umbrella, it's likely that we would see Warner Bros. IP returning to Halloween Horror Nights. It’s too late in the development process to see anything for this fall, but perhaps, if this deal goes through quickly, we could see something as early as 2027.
But the biggest potential change in the theme park business would come with Universal obtaining control of the DC Comics and Looney Tunes franchises in a Warner Bros. deal. Those franchises currently are licensed for theme parks in the United States to Six Flags with an agreement that extends well into the next decade and beyond. So Universal would not be able to immediately place Batman, Superman and Bugs Bunny into its U.S. theme parks.
But let's talk about Six Flags for a moment. As all of us who have been following that company since its merger last year know, Six Flags is suffering from extreme debt problems. It needs cash. The company already has closed one theme park, with plans to sell its land as it tries to save on expenses and raise cash.
Both the Paramount Skydance and Comcast bids for Warner Bros. have been rumored in the industry to be backed by Saudi investment money. It's unclear what the form of that investment would be. Perhaps the Saudis are seeking a percentage of Paramount Skydance or of Comcast in exchange for backing their Warner Bros. bids. Or perhaps the bids are structured in a way that Warner Bros. - or at least its assets obtained - would remain a separate company with significant Saudi ownership and U.S. corporate control.
However it happens, Comcast - with or without Saudi money - clearly has more cash at its disposal than Six Flags does. And Comcast might not even need its own cash to obtain the rights to Six Flags’ Warner Bros. IP.
Remember that Disney is desperate to get Universal's license for the Marvel characters in the Orlando market. That deal, which Universal signed back in the 1990s, exists in perpetuity. So the only way that Disney is going to be able to develop core Avengers attractions - or even to use the Marvel name - at Walt Disney World is for it to obtain those rights from Universal.
Longtime theme park fans might remember that Islands of Adventure’s Marvel Super Hero Island initially was designed as a DC superheroes land. But when Warner Bros. wouldn't play with the licensing rights and Marvel was desperate for cash, Universal pivoted and signed its deal with Marvel. This was years before the development of the MCU and Marvel's purchase by Disney.
So it does not require much imagination to see how Universal Orlando could be able to re-theme Marvel Super Hero Island around DC Comics characters. The Incredible Hulk coaster could become a Superman coaster. The Amazing Adventures of Spider-Man could become a Batman dark ride, and so forth.
Past Disney executives, at the highest level, confirmed to me that they had reached out and attempted to purchase the Marvel rights from Universal. Several years ago, there was a rumor flying around the industry that Universal was prepared to trade those Marvel rights to Disney in exchange for releasing Steven Spielberg and DreamWorks from a distribution deal with Disney. That is rumored to be the reason why Universal Studios Florida built its Transformers ride so quickly, because there was the thought that Universal Orlando would be without a trackless dark ride for some time, because Spider-Man would have to close for a re-theme.
Obviously, that never happened. But Disney's interest in obtaining the Marvel rights has not waned. Disney recently played paid billions of dollars to Comcast to buy out its share of Hulu, so the companies have been doing deals together. Again, it takes very little imagination to envision that Disney would be willing to write a very large check to Comcast to obtain the Marvel rights in the Central Florida theme park market - a check big enough to cover the cost of buying back the DC and Looney Tunes rights from a cash-strapped Six Flags.
So you might be asking, well, why doesn't that deal happen right now? Why does Universal need to buy Warner Bros. in order to pull the trigger on this deal? That's because there is a poison pill in Six Flags license agreement with Warner Bros. That provision says that if any Hollywood studio attempts to buy that license - or even buy the Six Flags company - the DC and Looney Tunes rights immediately would revert to Warner Bros.
So the only Hollywood studio that can obtain those rights from Six Flags is Warner Bros. itself. That's why Universal would need to obtain Warner Bros. to make this switch happen.
But imagine if it did. Imagine Looney Tunes under the control of NBCUniversal, which has shown a commitment to screwball animation with Illumination. Imagine the deep reservoir of Warner Bros. IP available to Universal Creative for new lands at Islands of Adventure and Universal Epic Universe.
And imagine a DC Comics Super Hero Island at IOA, freeing Walt Disney Imagineering to create a new home for marvel at the Walt Disney World Resort.
As a theme park fan, all of that sounds a lot more exciting than the same old-same old of Paramount Skydance merging with Warner Bros., or even Netflix getting control of the storied studio. But we are early in this acquisition process. It seems it could be months or even over a year before Warner Bros. decides about to whom to sell or whether to sell at all.
In the meantime, there is much for theme park fans to think about here.
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I’m not a big fan of corporate mega mergers, but I am salivating at the prospect of DC comics attractions finally being released from the grips of Six Flags and living up to their potential. And some cool Marvel rides at WDW. Of course that would mean the loss of our beloved Spider-Man ride.
Unless it's Netflix, I think whichever company wins here (Comcast or Paramount) ends up as Qiddiya's partner for the second theme park gate there. Don't know if any WB IP could be used there - that all depends upon how wide a geographic exclusivity Miral got when licensing WBWAD.
Speaking of Yas... if Comcast wins WB, that would mean that we (technically) would have a Universal park, a SeaWorld park, and a Disney park all in the same resort at Yas Island. LOL.
Finally, selling the WB IP would mean Six Flags would need to hire a creative consultant to come up with non-IP names and signage for its ride and kiddie lands. Plenty of companies could do a great job with that. It just depends upon Six Flags' budget.
The Dark Knight coasters could only improve by losing their IP. The biggest loss would be the Justice League rides, though none of them seem to be operating as well as at their debuts. I expect that Six Flags would just call back Sally Dark Rides for a retheme, since they developed the attractions in the first place.
(Cue Oprah meme.) You get a Phantom Theater. You get a Phantom Theater. Everybody gets a Phantom Theater!
Take a bow, Robert! This is your article of the year. I can't disagree with a single thought, opinion or fact.
The concept of Universal acquiring DC, Looney Tunes and the horror franchises minus Final Destination rollercoaster and Disney getting Marvel is an amazing notion and may be the tipping point for WDW to build a fifth park.
What is the purpose of life if you can't dream? And I am a believer that some dreams do come true.
Might be a bit niche, but I'd love to know what it means for Australia. Warner Brothers Movie World was dismissed by the late great Jay Stein as being a rippoff, and is technically operated under license by Viliage Roadshow theme parks (Village took full control in 2006). Thats said, I love the park, or at least what it was back when Batman: The Ride was there (maybe I didn't know better).
Would Universal Cut it loose, offer the Universal Branding, or allow it to keep the Warner's branding (But why would Univeral keep it around?
Unlike Disney, they don't need to differentiate between family-friendly and mature markets, so I can't see Universal wanting to keep the WB brand for anything other than Looney Tunes and Animation.
The Park's last big expansion was Wizard of Oz which is a mess when it comes to rights (It was a MGM movie, but I think the library got seperated from the company at some point so I don't think its with Amazon, Wicked is Universal but the park can't use Wicked).
VR has worked with another movie brand, but that was Twentieth Century Fox, and the park that they were working with them on seems to have disappeared into the ether following the Disney Merger (South Korea), and there's no way I can see the Mouse licensing the Disney brand to them.
That said, WB is a Poisoned Chalice. Every company that's tried to merge with it has struggled to the point that they've wanted to get rid of it very quickly. AOL, AT&T, and now Discovery.... Probably the only realistic option for the company is to gut it for parts at this point.
No way universal gives up Marvel to Disney. That'd be the worst business decision of all time- why on earth would you give Disney a reason to build some popular attractions? I can see them using DC, either as a portal in EU or as an attraction or two in USO.
"The Incredible Hulk coaster could become a Superman coaster."
Martian Manhunter was right there! smh.
My issue with this analysis is that it seems to be making the assumption that DC Comics and Looney Tunes would be more valuable to Universal than the IPs they currently have (or at least the ones they'd be looking to replace), which I'm not sure is the case. If we look at the films (which are only one facet of the IP, but still fine for a simplistic analysis), the four Avengers films together grossed more than the entire 13 film DCEU or all 18 Batman films that have been theatrically released combined, and those are the two highest grossing DC franchises. The average X-Men film (which is the lowest grossing of the four major Marvel franchises) also outgrosses the average film in either of those franchises. To me, that indicates Marvel is a much more popular IP, and even if Universal can't draw from those films, the characters are still well known enough that the attractions Universal offers are likely performing better in their current forms than they would if they were swapped out for DC attractions. I've also heard from friends who work in Universal Creative that simply preventing Disney from benefiting from the Marvel brand in Florida is more valuable to them than anything they could potentially replace Marvel Super Hero Island with, so even if they had access to DC Comics as well I think it's very unlikely they'd be willing to sell those Marvel rights. And when it comes to Six Flags surrendering the DC rights, with the exception of Magic Mountain (where the audience is primarily extreme thrill seekers looking for the craziest coasters), the attractions themed to DC tend to be the most popular attractions in their respective parks (or at the very least the most popular more than two or three years old), so despite their financial situation I could see Six Flags asking for more for the rights than Universal would be willing to pay out. Looney Tunes, on the other hand, I could see Six Flags selling off in favor of bringing Peanuts to all their properties, but given that they haven't done anything with that IP in over a decade I'm not sure it's got enough value to be worth major investment by Universal (though perhaps enough to justify a redo of Toon Lagoon's nearly forgotten properties).
I think the bigger, more interesting possibility is that if Universal were to acquire Warner Bros., it could potentially pave the way to bringing Middle-earth into the parks, which I'd consider arguably the most lucrative IP that has yet to have a theme park presence. Announcing "Middle-earth: Realm of the One Ring" as an expansion of Epic Universe would probably get a lot of fans looking to book a trip, while "DC Superhero City" at Islands is more along the lines of something many would save for the next time they happen to visit.
Everyone’s missing the obvious. Comcast WILL make the purchase just to counter Villain’s land with the Legion of Doom. And while we’re spending other people’s money, would love to see a clone of the WB indoor park in Orlando, especially if it is as good as it seems.
Even if Marvel is the more popular IP at the present time, it makes a lot of sense for Kabletown to swap it out for DC. Universal can sell DC Superhero Island (and Looney Tunes Lagoon) as a new land with only one expensive refurbishment. And the company can have the synergy they are not getting with Disney IP in their parks.
Cedar Fair was able to successfully move on from Top Gun, Italian Job and Tomb Raider theming when the company purchased Paramount Parks, so it should be a breeze for Six Flags to lose the light super hero theming on their thrill rides.
Kabletown isn’t in the business of helping the Mouse, but if at the end of this process they are flush with WB IPs and get handed a big check from Bob Iger they should be okay with moving on from Marvel.
How does Comcast (a company currently carrying a $100 billion debt load) afford to pay for WBS, as well as the construction of new theme parks (Texas, the UK), new attractions (haunted houses in Vegas and Chicago) while also adding nine figure expansions (rides) to their existing parks?
And then after buying WBS, how do they pay for another collection of hundred million dollar attractions based upon their newly acquired IP?
Oh, and let's not forget, there's a thread on this site advancing the notion that Comcast might also venture into the cruiseline industry.
I mean ... my Gawd!
Comcast could also be making a huge mistake if they don't win the auction. If Paramount wins and they are upset with paying so much, they could demand more for Harry Potter or buy Six Fags and put Harry Potter there. The same is true for Netflix and their new attractions. Plus is Comcast pays too much, they could destroy their entire company. They already lost almost all the billions they paid for Sky. In fact they paid almost as much as Dinsey did for their stare of Fox. Remember Disney got almost $10 billion for the RSNs and billions more for their share of Sky.
Now, as a themepark fan there is nothing more that I would want that a combined Paramount and WB in competition with Disney and Universal.
TH: "How does Comcast (a company currently carrying a $100 billion debt load) afford to pay for WBS?"
The same way Paramount Skydance would pay -- funding from external sources (in PSKY'S case: KSA, the Ellison family, etc).
The $100 billion debt load seems quite substantial when compared to other media companies (Disney: ~$45billion, WBD: ~$35 billion, PSKY: ~$16 billion), but this isn't the full picture. Kabletown at its core is a telecom company that happens to own a media business. The infrastructure upkeep and expansion requires significant investment, necessitating the need to dip into debt.
Compared to other telecom companies, Kabletown's debt load is rather standard (T-Mobile: ~$110 billion, AT&T: $~140 billion, Verizon: ~$150 billion, Charter: ~$95 billion). It's debt-to-equity ratio is also quite balanced when compared to other telecoms, though it is a bit higher than its media counterparts.
To be sure, Kabletown won't be plummeting into insane debt depths to buy the studio & streaming assets from WBD (that's where potential KSA funding comes into play). Neither will PSKY (backed by the full faith and credit of Daddy Larry). The PSKY offer is for the whole of WBD (including the linear cable channels), which might be a juicer offer for the Zazz.
@Hands: Meaning the Comcast bid is dependent on Saudi money?
@TH: Most likely, depending on the structure of the offer. The same is true for PSKY.
@Hands: So the Saudis will actually have an ownership stake/leverage related to Comcast's operation?
@TH: It would depend on the specifics of the deal. We really don't have much info to go on. PIF could become a passive partner, a significant shareholder, or even get Board representation for CMCSA or PSKY (similar to Uber).
@Hands: And the specifics could include a degree Saudi ownership/leverage over the actual IP as well. While we have Disney basically franchising its park models to a Abu Dhabi entity, they wouldn't be accessing the money that is a necessary catalyst to development by selling off a percentage of control/ownership of the Mickey Mouse.
In in the case of Comcast, depending on term, the KSA agreement would be implemented to actually acquire the IP. So a Saudi entity could own a portion of Harry Potter?
Fascinating.
@TH: "In in the case of Comcast, depending on term, the KSA agreement would be implemented to actually acquire the IP. So a Saudi entity could own a portion of Harry Potter?"
I don't believe a deal will happen in this way (not only because JKR has total and complete control over every aspect of this particular IP). I'm thinking something similar to Disney's stake in Epic Games or the NFL's stake in ESPN. The KSA could have a small % ownership in all of CMCSA rather than owning particular IPs, brands, or subdivisions of WBD.
Regardless, I would assume part of a potential deal would act as a lure to get a Universal-Qiddiya-type destination built.
Paramount is the leader according to the stock market....
And Yes this is a great article Bobby!
You might have a future as a writer.
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Great stuff! I believe Kabletown has an excellent chance of ending up with Warner Brothers despite the Ellison family fortune and Netflix hefty stock price. Just as the Fox rights were more valuable to the Mouse, the WB rights are worth much more to the Roberts family than they are to the competing bidders.