SeaWorld Orlando's Future Plans

[paintervision]

Infinity Falls looks awesome, but SeaWorld Orlando is the last major park in the chain to get a Rapids ride. Instead of pushing VR, I wish they would build up the family rides in the park... flat rides, kiddie rides, family coasters, a drop tower, maybe a monorail transportation system, anything! A swinging ship next to Sky Tower, a Wave Swinger and family drop tower next to Manta, a Cobra’s Curse-style coaster next to Key West (along with a rip-off Margraitaville bar and restaurant please), etc.

I totally agree that SeaWorld going toe-to-toe with Disney and even Universal is a stretch (exhibit A: Antarctica). I would double-down on new rides and refreshed shows, while pushing Quick Queue, dining options, more alcohol options (aside from the one full bar in Sharks)... additional guest spending, essentially. They have the start of a really nice park, but it’s always been a little underdeveloped.

 

[Thatguyoverwhere]

So, with all the speculation that's going on now about the SeaWorld parks being split up/bought/torn down/ruined in some other way, is there any scenario in which a) SeaWorld/Aquatica/Discovery Cove don't get completely destroyed in one way or another and b) the parks get to stay together? Comcast would turn SeaWorld into another overpriced Land of the Screens with no real resemblance to the original park other than some guise of being ocean-themed (which is the same reason I've stopped visiting Universal). Disney wouldn't bulldoze it indiscriminately; instead they would let it rot and turn it into another overpriced Land of the Meet & Greets. Merlin I know little about, but I don't like the idea of splitting up Busch Gardens and SeaWorld and from what's been said on here they are worse than Blackstone with investing in their non-LEGOLAND parks. And removing the animals from either one would eliminate the one thing differentiating them from Six Flags (which is basically the Walmart of theme parks).
On a brighter note, it's nice to see healthy attendance as of late; SeaWorld was quite busy when I visited a few weeks ago, and it sounds like that's been the case fairly often. With this new direction they're going in and the promising results it seems to be producing, why would they pick now to try to sell the company?

 

[zg44]

So, with all the speculation that's going on now about the SeaWorld parks being split up/bought/torn down/ruined in some other way, is there any scenario in which a) SeaWorld/Aquatica/Discovery Cove don't get completely destroyed in one way or another and b) the parks get to stay together? Comcast would turn SeaWorld into another overpriced Land of the Screens with no real resemblance to the original park other than some guise of being ocean-themed (which is the same reason I've stopped visiting Universal). Disney wouldn't bulldoze it indiscriminately; instead they would let it rot and turn it into another overpriced Land of the Meet & Greets. Merlin I know little about, but I don't like the idea of splitting up Busch Gardens and SeaWorld and from what's been said on here they are worse than Blackstone with investing in their non-LEGOLAND parks. And removing the animals from either one would eliminate the one thing differentiating them from Six Flags (which is basically the Walmart of theme parks).
On a brighter note, it's nice to see healthy attendance as of late; SeaWorld was quite busy when I visited a few weeks ago, and it sounds like that's been the case fairly often. With this new direction they're going in and the promising results it seems to be producing, why would they pick now to try to sell the company?

The reason why they're considering a sale is because financially the company has a lot of debt while also having assets that appeal to the other theme park operators, and because their stock price/equity is basically weighed down by their lower attendance levels and debt pile. A tangential reason for considering a sale is that in the hands of a financially stronger operator, there'll be more room for re-investing in the business (their capital spending has been lower in recent years as a result of the debt service).


They're currently in the weakest position financially among large theme park operators, so pretty much any of the others can easily buy them.

 

[anihilnation]

Does anyone know what the status is of the proposed Dubai Seaworld? I've also been wondering if either a Dubai or Chinese company could just buy up the whole of Seaworld.
Also, how difficult would it be for Seaworld to become a private company again?

 

[GAcoaster]

Parques Reunidos is said to have offered $1.6 Billion for SeaWorld Parks & Entertainment:

https://www.streetinsider.com/Hot+M+and+A/SeaWorld+(SEAS)+Said+to+Receive+$1.6+Billion+Offer+from+Parques+Reunidos+-+Source/13376362.html

Global Operator - Grupo Parques Reunidos

If Parques Reunidos buys SWP&E it would be a good fit (they run several marine life and zoo attractions as well as theme parks). The combined companies would have attendance of ~40 million + making them the #4 park operator in the world, behind Universal. The two companies are the #9 & #10 operators in attendance according to last years TEA report.

 

[cwgator]

I don't know how they can handle 5 additional (large) theme parks, 5 additional water parks, Discovery cove and Sesame Place when they can't get a Jr. Invert open in the year it advertised it for. Season pass members are not happy about it either. (Merlin's Mayhem @ Dutch Wonderland)
Plus everything I've heard about Kennywood hasn't been very positive either since they took over there.

 

[Mad Dog]

I don't know how they can handle 5 additional (large) theme parks, 5 additional water parks, Discovery cove and Sesame Place when they can't get a Jr. Invert open in the year it advertised it for. Season pass members are not happy about it either. (Merlin's Mayhem @ Dutch Wonderland)
Plus everything I've heard about Kennywood hasn't been very positive either since they took over there.

Yes, I live real close to Kennywood (about 8 miles). It's their flag ship park and they've added very little to it since they bought it, and nothing to their water park down the road. . The park is still clean & well landscaped , maintenance is OK. But, don't expect expansions & new attractions from those guys.

 

[MakoMania]

They would have no choice but to invest in Florida, you cannot survive there without investment.

 

[zg44]

Does anyone know what the status is of the proposed Dubai Seaworld? I've also been wondering if either a Dubai or Chinese company could just buy up the whole of Seaworld.
Also, how difficult would it be for Seaworld to become a private company again?

Zhonghong owns 21% of SeaWorld but by agreement can't make its stake larger than 25% for a couple years. Maybe that agreement would be waived since the whole company is for sale. They're probably the only Chinese company in the running to buyout SeaWorld since they already own such a large stake.

As for Dubai SeaWorld, contracts are still being worked out; doesn't appear to have started building yet.

As for becoming a private company again? Probably impossible. SeaWorld has around $1.3 billion in equity and $1.5-2 billion in debt. Given other bids; they'd probably have to pay $1.7 billion to cover the equity (maybe one of the current large stakeholders like Zhonghong or somebody else would participate meaning it'd only require $1.3-1.4 billion). Either way, they'd end up with around $3-3.5 billion in debt which appears to be too much to handle given current attendance/revenue numbers.

SeaWorld is looking for somebody with a stronger balance sheet to solve their debt issues.

 

[shiekra38]

Zhonghong owns 21% of SeaWorld but by agreement can't make its stake larger than 25% for a couple years. Maybe that agreement would be waived since the whole company is for sale. They're probably the only Chinese company in the running to buyout SeaWorld since they already own such a large stake.

As for Dubai SeaWorld, contracts are still being worked out; doesn't appear to have started building yet.

As for becoming a private company again? Probably impossible. SeaWorld has around $1.3 billion in equity and $1.5-2 billion in debt. Given other bids; they'd probably have to pay $1.7 billion to cover the equity (maybe one of the current large stakeholders like Zhonghong or somebody else would participate meaning it'd only require $1.3-1.4 billion). Either way, they'd end up with around $3-3.5 billion in debt which appears to be too much to handle given current attendance/revenue numbers.

SeaWorld is looking for somebody with a stronger balance sheet to solve their debt issues.

The Kmart of the theme park world if you will

 

[Mad Dog]

The Kmart of the theme park world if you will

Blue Light Special. Buy 1 Park Get all the others Free.

 

[zg44]

Parques Reunidos is said to have offered $1.6 Billion for SeaWorld Parks & Entertainment:

https://www.streetinsider.com/Hot+M+and+A/SeaWorld+(SEAS)+Said+to+Receive+$1.6+Billion+Offer+from+Parques+Reunidos+-+Source/13376362.html

Global Operator - Grupo Parques Reunidos

If Parques Reunidos buys SWP&E it would be a good fit (they run several marine life and zoo attractions as well as theme parks). The combined companies would have attendance of ~40 million + making them the #4 park operator in the world, behind Universal. The two companies are the #9 & #10 operators in attendance according to last years TEA report.

I'm skeptical this would work. Parque Reunidos would get good geographic distribution (most of their current US revenue come from Northeast vs SeaWorld FL/TX/CA exposure), but they would be entering a whole different competitive ballgame.


Parque Reunidos
Revenue per year: $600m
Rev per visitor: $30
Capital Spending per year: $60m
Debt: $1bn
Equity: $1.1bn

SeaWorld
Revenue per year: $1.35bn
Rev per visitor: $61
Capital Spending per year: $160m
Debt: $1.5-2bn
Equity: $1.3bn


Though they have similar overall attendance around 20-22m; the similarities end there. SeaWorld is in markets that demand enormous capital spending (see Disney/Universal) and generate double the revenue per visitor.

I'm also not sure how they would structure their $1.6bn bid, but it can't be all cash unless they plan a massive capital raising through more shares.

Combined company would have $2.5-3bn in debt before you add any purchase price, and I'm not sure they'd be able to handle SeaWorld's required capital expenditures unless they plan to just reduce costs and capital expenditures (which would lead to a negative revenue feedback cycle with Orlando/California rivals Disney/Universal building at a much faster pace).

Parque Reunidos can get away with only 10% capital spending (as a portion of revenue) because it's not in the most competitive markets; that wouldn't work for SeaWorld.

 

[Mad Dog]

I'm skeptical this would work. Parque Reunidos would get good geographic distribution (most of their current US revenue come from Northeast vs SeaWorld FL/TX/CA exposure), but they would be entering a whole different competitive ballgame.


Parque Reunidos
Revenue per year: $600m
Rev per visitor: $30
Capital Spending per year: $60m
Debt: $1bn
Equity: $1.1bn

SeaWorld
Revenue per year: $1.35bn
Rev per visitor: $61
Capital Spending per year: $160m
Debt: $1.5-2bn
Equity: $1.3bn


Though they have similar overall attendance around 20-22m; the similarities end there. SeaWorld is in markets that demand enormous capital spending (see Disney/Universal) and generate double the revenue per visitor.

I'm also not sure how they would structure their $1.6bn bid, but it can't be all cash unless they plan a massive capital raising through more shares.

Combined company would have $2.5-3bn in debt before you add any purchase price, and I'm not sure they'd be able to handle SeaWorld's required capital expenditures unless they plan to just reduce costs and capital expenditures (which would lead to a negative revenue feedback cycle with Orlando/California rivals Disney/Universal building at a much faster pace).

Parque Reunidos can get away with only 10% capital spending (as a portion of revenue) because it's not in the most competitive markets; that wouldn't work for SeaWorld.

Nice analysis. You are becoming IU's own version of WDW Magic's Parents of Four with your concise statistical analysis' :thumbsup:... Yes, Parque Reunidos, under their present structure, doesn't have the resources to be a competitive player in the big markets. Plus, they've never exhibited any desire or ability to do any considerable enhancement of their properties. To look at them as a savior to resurrect the Sea World parks is a serious misconception.

 

[cwgator]

Merlin has said they aren't talking to SW about any deal.

Legoland Owner Says It’s Not Talking to SeaWorld About Any Deal - Bloomberg

Legoland Owner Says It’s Not Talking to SeaWorld About Any Deal
Merlin Entertainments Plc isn’t talking to SeaWorld Entertainment Inc. about an acquisition of the U.S. company or a deal for any of its parts, the U.K. owner of Legoland theme parks said.


Merlin, which has been seeking to expand overseas to offset a slide in day trippers visiting London, previously approached SeaWorld about a potential transaction, people familiar with the matter said last week. The U.K. company, which operates Madame Tussauds wax museums and the London Eye Ferris wheel, was said to be interested in SeaWorld’s Busch Gardens theme parks.


“We can confirm that Merlin is not involved in any discussions that might lead to an acquisition of SeaWorld or any of its constituent parts,” Merlin said in a statement, responding to a request for comment from Bloomberg News.

 

[Mad Dog]

I can't see anyone wanting the entire chain. Maybe a park here or there. BGW was successful until the Busch's were acquired by In Bev & then the Blackstone purchase. The BGW park isn't tainted by Blackfish and is located next to one of the top tourist attraction areas in the USA. Universal or Cedar Fair could do well there.

 

[zg44]

I can't see anyone wanting the entire chain. Maybe a park here or there. BGW was successful until the Busch's were acquired by In Bev & then the Blackstone purchase. The BGW park isn't tainted by Blackfish and is located next to one of the top tourist attraction areas in the USA. Universal or Cedar Fair could do well there.

Yeah, the single biggest stumbling block (and arguably the very reason nobody has purchased SeaWorld already) is that Blackfish issue. Nobody wants the rest of their business affected by boycotts or negativity on social media (FB/Twitter etc. is full of negativity towards SeaWorld and Zoos generally these days).

If it wasn't for that, SeaWorld would have already been bought by a major player given its cheap stock price. I'd imagine everybody is watching closely (Universal, Disney, Cedar Fair, Six Flags, Merlin), but it's hard to see who can solve the reputational issues.

 

[paintervision]

My thing is, if some else buys SeaWorld, I wonder if they’d hire an existing, established player to manage the parks for them? That’s the only way I could see Merlin, Reunidos, etc be involved. That could open up a lot more potential owners, and provide a lower risk to some of the smaller regional operators.

 

[youhow2]

BGW was successful until the Busch's were acquired by In Bev & then the Blackstone purchase. The BGW park isn't tainted by Blackfish and is located next to one of the top tourist attraction areas in the USA. Universal or Cedar Fair could do well there.

First off, I can't trust Cedar Fair to operate BGW, or even see them wanting to operate BGW. They'd probably pull a Geauga lake to the property and direct everyone towards Kings Dominion and Carowinds.


Also, I'm under the impression The Busch Parks didn't really need to be operated for profit underneath AB. Once their budget wasn't padded anymore is when all the struggle and strife started right?

 

[GAcoaster]

Under Busch the parks were profitable, but it was never a priority that they drove profits. It was about goodwill and public image more than anything, but that made them profitable as well. In-Bev sold them off simply because they were not part of their core business strategy (along with other AB owned businesses) as well as to raise some cash to pay for the acquisition they made buying AB.

We could see a similar situation with someone like Parques Reunidos buying the whole chain then selling off some of the assets (either some of the SW parks or other parks they own) to help pay the debts they have. They evaluate which things are most profitable (the Busch Gardens parks) and then sell off some of the smaller, less profitable ones.

There have been success stories with a smaller company buying a larger one and thriving, most of it depends on the management and whether they can adapt.

 

[shiekra38]

I can't see anyone wanting the entire chain. Maybe a park here or there. BGW was successful until the Busch's were acquired by In Bev & then the Blackstone purchase. The BGW park isn't tainted by Blackfish and is located next to one of the top tourist attraction areas in the USA. Universal or Cedar Fair could do well there.

Cedar Fair would be interesting...I don't think they would want another animal experience park though..