There is yet another new player in Orlando's theme-park business.
Cable-TV giant
Comcast Corp. said Thursday that it had completed a long-discussed deal with
General Electric Co. to acquire
NBC Universal, the media conglomerate that co-owns
Universal Orlando. Comcast will merge its cable networks with NBC Universal's assets; initially it will hold a 51 percent stake in the new joint venture, though it plans to eventually buy out GE entirely.
Comcast will pay GE about $6.5 billion in cash. NBC Universal will borrow an additional $9.1 billion and distribute the proceeds to GE, which will use part of the money to buy out French conglomerate Vivendi SA's minority stake in NBC Universal for $5.8 billion.
The multibillion-dollar deal could reshape the entertainment industry, giving the nation's largest cable-TV operator greater control over the content it pipes into people's TVs and computers. NBC Universal's portfolio includes the flagship
NBC broadcast network, an array of well-known cable channels and a movie studio.
Its theme parks are a less obvious fit, though executives at Philadelphia-based Comcast gave early indications Thursday that they intend to hang on to the parks.
The park unit is just a sliver of Comcast's new joint venture with GE, generating only about 3 percent of estimated annual revenue. NBC Universal co-owns Universal Orlando with the
Blackstone Group, owns Universal Studios Hollywood in California, and operates Universal Studios Japan through a licensing agreement.
In a conference call to discuss the deal with GE, Comcast Chairman and Chief Executive Officer Brian Roberts praised Universal Parks and Resorts, calling it "one of just two major international theme-park brands," alongside
Walt Disney Parks and Resorts.
Although the Universal division has been hit hard by the global economic downturn — its operating profit sank 14 percent during the third quarter of the year — Comcast is acquiring Universal's parks at an opportune moment.
Universal Orlando, the division's largest resort, is nearing completion of the $200 million-plus Wizarding World of
Harry Potter in its
Islands of Adventure theme park. That addition is expected to prove a huge draw when it opens next spring and help reverse an attendance slump brought on by the recession.
"They recently made a significant investment in a new set of attractions around the Harry Potter world they are building at Universal Orlando. And we will clearly benefit from these investments in an improved economy," Roberts said. Universal's theme parks, he added, "can be poised for some nice growth."
Comcast leaders similarly praised the unit when asked about the parks' fate during a virtual-town-hall meeting with NBC Universal's 30,000 employees, according to a person who witnessed the meeting, saying they were looking forward to learning about the business. At that point, according to this person, GE Chairman and CEO Jeff Immelt added that he, too, initially knew little about the theme-park industry but had come to consider it a good business.
Theme-park analysts noted that Comcast's leadership does have some experience in the industry: The company's chief operating officer, Stephen Burke, is a former
Walt Disney Co. executive who once ran Disneyland Paris. Comcast attempted unsuccessfully to buy Disney in early 2004.
NBC Universal President and CEO Jeff Zucker will remain CEO of the new joint venture. He will report to Burke.
Even if Comcast wanted to unload Universal Parks and Resorts, it could find that buyers are scarce. Beer brewer
Anheuser-Busch InBev spent more than a year seeking buyers for
SeaWorld Orlando parent
Busch Entertainment Corp. before agreeing this fall to sell the business to Blackstone for $2.3 billion cash — substantially less than early estimates. A-B InBev can also get as much as $400 million in future returns from the deal.
Blackstone closed on that sale Tuesday, and Busch Entertainment was immediately renamed SeaWorld Parks & Entertainment.
At the International Association of Amusement Parks & Attractions annual convention in Las Vegas last month, there was speculation that Blackstone might be interested in acquiring the other half of Universal Orlando that it doesn't already own. A spokeswoman for Blackstone would not comment Thursday.
Because the deal could give Comcast sweeping power in the entertainment industry, it is likely to face scrutiny from federal regulators. Approval is expected to take nine months to a year.