Universal Orlando Resort Expansion (Part 1)

[zg44]

The only context needed is that Universal is probably going to wholly own any new parks. The only equity share that Universal won't own is the 50% of the hotels that are owned by Loews.

If you think of it in that context, then a non-Universal branded 4th dry park would be either SeaWorld Orlando (assuming Universal buys their Orlando resort), or something like Six Flags (assuming Comcast buys that company outright).

Comcast buying Six Flags would be a pretty interesting thing to discuss (control of DC/Looney Toon theme park rights in the US) as well as the potential for some kinds of annual pass deals that would look interesting in California and across the US. Six Flags also has some interesting projects outside the US that could be roped into it.

And in Orlando maybe you build the 3rd dry park as Universal's version of the Magic Kingdom with the 4th dry park as a Six Flags park.

But yeah, I don't think there'd be outside companies involved. Why would Comcast want to share their profits with outsiders?

 

[Magic-Man]

If Comcast were to license out land to outside investors, wouldn't that make them more profit in the long run? Uni. can use the money to expand the resorts further. The new resort could become a major destination within itself. Everyone wins.

Edit: Also, if Comcast somehow comes to an agreement with Six Flags, Uni. could get DC. Six Flags could have a major presence in FL. There are so many opportunities here.

 

[Disneyhead]

The only context needed is that Universal is probably going to wholly own any new parks. The only equity share that Universal won't own is the 50% of the hotels that are owned by Loews.

If you think of it in that context, then a non-Universal branded 4th dry park would be either SeaWorld Orlando (assuming Universal buys their Orlando resort), or something like Six Flags (assuming Comcast buys that company outright).

Comcast buying Six Flags would be a pretty interesting thing to discuss (control of DC/Looney Toon theme park rights in the US) as well as the potential for some kinds of annual pass deals that would look interesting in California and across the US. Six Flags also has some interesting projects outside the US that could be roped into it.

And in Orlando maybe you build the 3rd dry park as Universal's version of the Magic Kingdom with the 4th dry park as a Six Flags park.

But yeah, I don't think there'd be outside companies involved. Why would Comcast want to share their profits with outsiders?

Building theme parks is expensive.

And IPs galore.

 

[Magic-Man]

Building theme parks is expensive.

And IPs galore.

Plus, owning a bigger share of the Orlando theme park market.

 

[JungleSkip]

Can we seriously get Park 3 built before talking about a nebulous Park 4?:faint:

 

[Mad Dog]

The only context needed is that Universal is probably going to wholly own any new parks. The only equity share that Universal won't own is the 50% of the hotels that are owned by Loews.

If you think of it in that context, then a non-Universal branded 4th dry park would be either SeaWorld Orlando (assuming Universal buys their Orlando resort), or something like Six Flags (assuming Comcast buys that company outright).

Comcast buying Six Flags would be a pretty interesting thing to discuss (control of DC/Looney Toon theme park rights in the US) as well as the potential for some kinds of annual pass deals that would look interesting in California and across the US. Six Flags also has some interesting projects outside the US that could be roped into it.

And in Orlando maybe you build the 3rd dry park as Universal's version of the Magic Kingdom with the 4th dry park as a Six Flags park.

But yeah, I don't think there'd be outside companies involved. Why would Comcast want to share their profits with outsiders?

Yes, just like at CitiWalk. Comcast/Universal is ending leases and converting the sites into Universal restaurants/stores.

 

[Magic-Man]

Can we seriously get Park 3 built before talking about a nebulous Park 4?:faint:

Ten years later.........

 

[zg44]

Building theme parks is expensive.

And IPs galore.

Most of the money for building the parks is borrowed and then assumed as a liability for the ongoing enterprise. Borrowing $2-3 billion for a dry park is pretty easy given Comcast's balance sheet (which is heavily underleveraged). Any new park will earn at least $200-300 million in profit each year which can easily support debt payments on that borrowed money. Look at the Beijing parks as an exceptional version of this ($7+ billion borrowed for just the Phase 1 parks).

Comcast could literally borrow $40 billion tomorrow and set it on fire with no real impact on its credit rating. That's how underleveraged the company is.

As far as IPs goes, that's a more interesting discussion I guess. I just struggle to see which company Universal would work with... Warner is the most obvious choice, but Universal already has the Harry Potter rights and Six Flags has the DC rights through at least 2027.

LOTR rights are controlled by the Tolkien Estate, but the movie look is controlled by Warner. Amazon will eventually control some kind of tv look I guess, but that's not as relevant.

I don't know, I just don't see it. To me, the most obvious cases for a 4th park are Six Flags (through a takeover of the whole company) or SeaWorld Orlando (through a takeover of that park specifically).

A joint with an outside studio just doesn't seem as valuable given that Universal can just pay for whatever rights it wants and still control 100% of the park.

 

[Andysol]

Can we seriously get Park 3 built before talking about a nebulous Park 4?:faint:

Yes- this is beyond absurd. It's the equivalent of discussing Disney's 6th gate.

We can barely make guesses and assumptions to the theme park landscape a year from now...

 

[zg44]

The key question for splitting a park is: Why would the company want to share 50% of $200-300 million in annual profits when they can just pay $5-15 million a year (Harry Potter is over $20 million a year probably but that's extremely unique) for whatever IP that they're purchasing the rights for...

The reason Universal splits the hotel arrangement with Loews is because they don't want to have the hotels on their balance sheet. The hotels are much lower profit with much higher debt assumption and employment related costs. Yeah, they're profitable, but it's better to split those into a joint venture which assumes all the risk and then sends profit back to the parent company.

The theme parks are an entirely different calculation; typically the company would want to own 100% of the parks if possible because of the profit generation.

 

[Yabbadabba Doh]

Talk about a thread going off on a tangent....
We can't even figure out what they are doing with the parks they have, let alone new/other ventures.
As I said in another thread, having the $$ to do whatever you want is good, except you need to know what you want first.

 

[Bulldog45]

It's been an hour. Now what?

Easy for somebody to be a smart ass from behind a computer screen.

 

[fryoj]

As far as IPs goes, that's a more interesting discussion I guess. I just struggle to see which company Universal would work with... Warner is the most obvious choice, but Universal already has the Harry Potter rights and Six Flags has the DC rights through at least 2027.

Just a random thought. What if WB decided they wanted to do a WB Movie World in Orlando. If they informed Uni that this was their intention, and weren't going to renew the Potter contract next time..... I think Uni would agree to anything to prevent that from happening, including building them their own park.

 

[Scott W.]

Put me down as not thinking there will ever be a 4th "park". Maybe a small boutique "experience", but my bet for site B is Park 3, Water Park 2, CityWalk 2, and resorts

This is my thinking as well. 3 parks sounds like the sweet spot. Visiting UOR and DL, another park would be nice. Visiting WDW, 4 might be too much.

 

[Magic-Man]

Easy for somebody to be a smart ass from behind a computer screen.

Dude. It's a joke

 

[zg44]

Just a random thought. What if WB decided they wanted to do a WB Movie World in Orlando. If they informed Uni that this was their intention, and weren't going to renew the Potter contract next time..... I think Uni would agree to anything to prevent that from happening, including building them their own park.

It's possible, but at the same time, Warner is just a name/IP provider for their Abu Dhabi park (all money aspects are handled by their govt partner) and if the AT&T merger goes through, you end up with a heavily indebted parent company. AT&T will have total post-merger debt of $180 billion compared to Comcast's $60 billion.

At that point, the riskless profit of $30-40 million a year for lending out rights to Universal and Six Flags seems a lot better than trying to build your own park.

 

[IAmFloridaBorn]

Sea World has 3 Parks.

Universal Now has 3 but could be reaching to 5 with a Discovery Cove type experience except 'Dry'? Interesting.

 

[captainmoch]

Disneyhead is obviously talking about Universal's Cinemagine Park.

 

[Ashhanbre]

I give up on this one. Way too vague and way too early.

 

[quinnmac000]

Cirque park....it goes with that Cirque hotel he was talking about and Cirque has been trying to get into the theme park business....