- February 16th, 2006, 1:07 pm
#16313
Found this on RRC
A New Dominion?
CBS announces intention to sell its Paramount Parks division; little local
impact expected immediately
Kent Jennings Brockwell
Thursday February 9, 2006
Though Paramount's Kings Dominion's parent company CBS Corp. recently
announced plans to unload its theme park division, Paramount Parks, don't
expect to see too many changes at the local park.
At least not this summer.
It's just business as usual, according to Kings Dominion officials.
"For us, we are all just focused on our opening April 1," Kings Dominion
spokesperson Susan Storey said. "We have a new coaster coming, we are hiring
(summer employees) and we had a great year last year and are looking forward
to having an even better year this year."
Storey said this isn't the first time Paramount Parks has been purchased,
but during previous acquisitions little change was experienced at the park
operations level.
Besides Kings Dominion, Paramount Parks owns and operates four other theme
parks in North America. CBS, under its prior Viacom name, acquired the theme
parks as part of its purchase of Paramount Pictures in 1994.
Attracting more than 13 million visitors and $1.1 billion in sales last
year, owning Paramount Parks has been a successful venture for CBS, but the
company says its theme parks are no longer part of its corporate vision.
According to a recent statement by CBS, "[the Paramount Parks division] is a
great asset with solid management but the division no longer fits within the
company's core focus on media."
Though no specific bidders or purchase amounts were given, a CBS
spokesperson said numerous parties have showed interest in purchasing the
theme park group.
Opened, sold, bought, sold, bought, sold.
CBS Corp. has owned Kings Dominion for more than 11 years but history
shows that the Doswell-based theme park has been a favorite side business of
media companies since it was opened in the '70s.
a.. 1975
Kings Dominion is opened as a joint venture between Ohio-based Top
Value Enterprises, of Kroger supermarkets fame, and Taft Broadcasting
Company.
a.. 1980
The joint venture between Taft Broadcasting and Top Value ends and the
park becomes wholly-owned by Taft.
a.. 1982
Several senior executives at Taft Broadcasting purchase Taft's theme
park division and create Kings Entertainment Company, which included
ownership of Kings Dominion and several other theme parks including Kings
Island in Cincinnati, Carowinds in Charlotte, N.C., and Canada's Wonderland
in Toronto.
a.. 1987
Kings Entertainment Company is restructured. The company now owns and
manages four theme parks as well as Great America in Santa Clara, Calif. and
Australia's Wonderland in Sydney, Australia.
a.. 1993
Paramount Pictures purchases Kings Entertainment, except for the
Australian theme park, and the group is renamed Paramount Parks.
a.. 1994
CBS Corp., as Viacom, acquires Paramount Pictures including its chain
of theme parks.
a.. 2005
CBS Corp. and Viacom split. CBS gets Paramount Parks in the deal.
a.. Jan. 2006
CBS Corp. announces that it intends to divest itself of Paramount
Parks.
Selling the golden goose
You don't have to be a market analyst with a degree in economics to realize
that the Paramount theme parks are probably turning a profit. Anyone who has
been to Kings Dominion recently can tell you a day in the park can be an
expensive endeavor. A single day ticket for the 2006 season runs about $35.
Add food and drink costs and a $10 souvenir for the kids to the ticket price
and a day of thrills becomes a bit pricey.
Multiply those single visitor costs by 13 million, the total amount of
visitors in 2005, and you can quickly see how Paramount Parks brought in
more than $1.1 billion last year.
So why would CBS Corp., a media conglomerate in the business of making
money, sell off such a lucrative and popular asset?
Robert Niles, founder and editor of Theme Park Insider, a web-based
independent news resource and consumers' guide focused on theme and
amusement parks, is asking the same question. Niles said what CBS is doing
is quite questionable considering the theme park holdings of its
competition, ABC and NBC.
"[CBS'] two main competitors in the big three traditional broadcast networks
in the United States are both part of the broadcast/cable/movie/theme park
conglomerates," Niles said. "ABC is a part of Disney, which obviously owns
the Disney theme parks.and NBC is part of NBC Universal, which now owns the
Universal Studios theme park. So what CBS/Viacom has done here really goes
against the grain."
While both ABC and NBC have effectively used their theme park properties to
cross-promote what they are doing in television and their movies, Niles said
CBS will effectively lose its built-in promotional tool by getting out of
the theme park business.
Then again, Niles adds that none of the Paramount Parks attractions have
ever come close to reaching a Disney level of fame, therefore losing the
parks shouldn't hurt the CBS brand too much.
"One can argue that there is limited cross-promotional value to the
Paramount Parks anyway," he said.
Who's next?
While Paramount Parks has the potential to continue as a profitable chain,
Niles said it takes a lot of money to make a lot of money in the theme park
business. That means whoever decides to buy Kings Dominion and its sister
properties will need to have a large checkbook, a fast pen and a strong
stomach.
"Theme parks have historically been cash cows," Niles said. "They are very
lucrative businesses. They are also very capital intensive businesses. You
have to spend on a regular basis to continually install new attractions to
keep the audiences coming back for more and more visits."
Niles points to the Six Flags theme parks as an example of what happens when
theme parks quit reinvesting in themselves. Started as Six Flags Over Texas
in 1961, the Six Flags chain began to build new parks as well as acquire and
brand several other theme parks over the years. Though it eventually became
the largest amusement park operator in the country, Niles said Six Flags
expanded and spent so much capital in the late '90s, when the economy cooled
down after 2001, that the chain quickly ran into major debt and major
problems.
"They didn't have the revenue coming in, they couldn't put in enough new
attractions to sustain their attendance and they got taken over," Niles
said.
In 2005, investment group Red Zone LLC, headed by Washington Redskins owner
Dan Snyder, but together a takeover bid and now controls the theme park
chain.
But whoever buys Paramount Parks will be walking into a situation that's
more likely to lead to success compared to the Six Flags takeover. Niles
said the buyer needs to be prepared to invest big and often.
Because of the expected multi-million dollar price tag and the magnitude of
the financial undertaking that comes with running a theme park, Niles said
there are very few potential buyers out there but "rumors are flying all
over the place."
"The buzz really seems to be that some sort of investment group would most
likely be the bidders on it," Niles said.
He said owning and operating a theme park is a perfect investment for a
large investment group because "they have got that kind of capital on hand
that they are looking to spend. These type of high capital, high margin
businesses are precisely what these investment groups are looking for."
Besides investment groups, Niles said other existing theme park chains would
also be viable candidates for the Paramount buyout. While some theme park
analysts have pegged amusement moguls Disney or Universal Studios to jump in
on the Paramount bid, Niles said that type of acquisition is highly
unlikely.
"Neither Disney or Universal have ever bought someone else's theme park so
you have got history working against you there," he said.
While Disney might not jump on the opportunity, Niles said he expects
Ohio-based Cedar Fair L.P., who already owns and operates eight amusement
parks in the United States, to take a serious look at the Paramount Parks
offer.
"If you look at the geography, [Paramount Parks] would match up well with
the Cedar Fair parks," he said. "The question is do they have enough money
to buy the whole thing or might they try to pick off a park or two in a
partnership with somebody else who might join with them in a takeover?"
CBS would not comment regarding if the company would break up the Paramount
chain and sell each park individually.
"There are so few potential buyers here I think it is just more likely from
a fiscal stand point to just sell them off as one whole thing," Niles said.
"Also, unless [the buyer] goes through and rebrands each attraction that
already has Paramount or Nickelodeon branding on it all ready, they are
going to have to deal with some kind of secondary deal on the licensing as
well."
The worst case scenario
According to a company press release, CBS Corp. said it plans to keep all of
the parks operational during the sale but plans to have the parks sold off
by the second quarter of 2006.
What happens then?
Speaking in the hypothetical world, Niles said if someone does go ahead and
buy the whole chain, that doesn't necessarily mean that they will keep all
of the parks open.
"It is entirely possible that someone may decide to buy the whole thing and
then close off one or more of the properties, selling them for real estate
value or to some other smaller theme park operator somewhere," he said.
If the buy-it-and-close-some option was exercised, Niles predicted the first
park to go would probably be Paramount's Great America park in Santa Clara,
Calif.
"It hasn't been developed as much as the other properties have been," he
said. "Obviously the land in the San Francisco bay area is about as
expensive as you can get in the country and a lot of developers would pay a
lot of money to come in on that land."
A New Dominion?
CBS announces intention to sell its Paramount Parks division; little local
impact expected immediately
Kent Jennings Brockwell
Thursday February 9, 2006
Though Paramount's Kings Dominion's parent company CBS Corp. recently
announced plans to unload its theme park division, Paramount Parks, don't
expect to see too many changes at the local park.
At least not this summer.
It's just business as usual, according to Kings Dominion officials.
"For us, we are all just focused on our opening April 1," Kings Dominion
spokesperson Susan Storey said. "We have a new coaster coming, we are hiring
(summer employees) and we had a great year last year and are looking forward
to having an even better year this year."
Storey said this isn't the first time Paramount Parks has been purchased,
but during previous acquisitions little change was experienced at the park
operations level.
Besides Kings Dominion, Paramount Parks owns and operates four other theme
parks in North America. CBS, under its prior Viacom name, acquired the theme
parks as part of its purchase of Paramount Pictures in 1994.
Attracting more than 13 million visitors and $1.1 billion in sales last
year, owning Paramount Parks has been a successful venture for CBS, but the
company says its theme parks are no longer part of its corporate vision.
According to a recent statement by CBS, "[the Paramount Parks division] is a
great asset with solid management but the division no longer fits within the
company's core focus on media."
Though no specific bidders or purchase amounts were given, a CBS
spokesperson said numerous parties have showed interest in purchasing the
theme park group.
Opened, sold, bought, sold, bought, sold.
CBS Corp. has owned Kings Dominion for more than 11 years but history
shows that the Doswell-based theme park has been a favorite side business of
media companies since it was opened in the '70s.
a.. 1975
Kings Dominion is opened as a joint venture between Ohio-based Top
Value Enterprises, of Kroger supermarkets fame, and Taft Broadcasting
Company.
a.. 1980
The joint venture between Taft Broadcasting and Top Value ends and the
park becomes wholly-owned by Taft.
a.. 1982
Several senior executives at Taft Broadcasting purchase Taft's theme
park division and create Kings Entertainment Company, which included
ownership of Kings Dominion and several other theme parks including Kings
Island in Cincinnati, Carowinds in Charlotte, N.C., and Canada's Wonderland
in Toronto.
a.. 1987
Kings Entertainment Company is restructured. The company now owns and
manages four theme parks as well as Great America in Santa Clara, Calif. and
Australia's Wonderland in Sydney, Australia.
a.. 1993
Paramount Pictures purchases Kings Entertainment, except for the
Australian theme park, and the group is renamed Paramount Parks.
a.. 1994
CBS Corp., as Viacom, acquires Paramount Pictures including its chain
of theme parks.
a.. 2005
CBS Corp. and Viacom split. CBS gets Paramount Parks in the deal.
a.. Jan. 2006
CBS Corp. announces that it intends to divest itself of Paramount
Parks.
Selling the golden goose
You don't have to be a market analyst with a degree in economics to realize
that the Paramount theme parks are probably turning a profit. Anyone who has
been to Kings Dominion recently can tell you a day in the park can be an
expensive endeavor. A single day ticket for the 2006 season runs about $35.
Add food and drink costs and a $10 souvenir for the kids to the ticket price
and a day of thrills becomes a bit pricey.
Multiply those single visitor costs by 13 million, the total amount of
visitors in 2005, and you can quickly see how Paramount Parks brought in
more than $1.1 billion last year.
So why would CBS Corp., a media conglomerate in the business of making
money, sell off such a lucrative and popular asset?
Robert Niles, founder and editor of Theme Park Insider, a web-based
independent news resource and consumers' guide focused on theme and
amusement parks, is asking the same question. Niles said what CBS is doing
is quite questionable considering the theme park holdings of its
competition, ABC and NBC.
"[CBS'] two main competitors in the big three traditional broadcast networks
in the United States are both part of the broadcast/cable/movie/theme park
conglomerates," Niles said. "ABC is a part of Disney, which obviously owns
the Disney theme parks.and NBC is part of NBC Universal, which now owns the
Universal Studios theme park. So what CBS/Viacom has done here really goes
against the grain."
While both ABC and NBC have effectively used their theme park properties to
cross-promote what they are doing in television and their movies, Niles said
CBS will effectively lose its built-in promotional tool by getting out of
the theme park business.
Then again, Niles adds that none of the Paramount Parks attractions have
ever come close to reaching a Disney level of fame, therefore losing the
parks shouldn't hurt the CBS brand too much.
"One can argue that there is limited cross-promotional value to the
Paramount Parks anyway," he said.
Who's next?
While Paramount Parks has the potential to continue as a profitable chain,
Niles said it takes a lot of money to make a lot of money in the theme park
business. That means whoever decides to buy Kings Dominion and its sister
properties will need to have a large checkbook, a fast pen and a strong
stomach.
"Theme parks have historically been cash cows," Niles said. "They are very
lucrative businesses. They are also very capital intensive businesses. You
have to spend on a regular basis to continually install new attractions to
keep the audiences coming back for more and more visits."
Niles points to the Six Flags theme parks as an example of what happens when
theme parks quit reinvesting in themselves. Started as Six Flags Over Texas
in 1961, the Six Flags chain began to build new parks as well as acquire and
brand several other theme parks over the years. Though it eventually became
the largest amusement park operator in the country, Niles said Six Flags
expanded and spent so much capital in the late '90s, when the economy cooled
down after 2001, that the chain quickly ran into major debt and major
problems.
"They didn't have the revenue coming in, they couldn't put in enough new
attractions to sustain their attendance and they got taken over," Niles
said.
In 2005, investment group Red Zone LLC, headed by Washington Redskins owner
Dan Snyder, but together a takeover bid and now controls the theme park
chain.
But whoever buys Paramount Parks will be walking into a situation that's
more likely to lead to success compared to the Six Flags takeover. Niles
said the buyer needs to be prepared to invest big and often.
Because of the expected multi-million dollar price tag and the magnitude of
the financial undertaking that comes with running a theme park, Niles said
there are very few potential buyers out there but "rumors are flying all
over the place."
"The buzz really seems to be that some sort of investment group would most
likely be the bidders on it," Niles said.
He said owning and operating a theme park is a perfect investment for a
large investment group because "they have got that kind of capital on hand
that they are looking to spend. These type of high capital, high margin
businesses are precisely what these investment groups are looking for."
Besides investment groups, Niles said other existing theme park chains would
also be viable candidates for the Paramount buyout. While some theme park
analysts have pegged amusement moguls Disney or Universal Studios to jump in
on the Paramount bid, Niles said that type of acquisition is highly
unlikely.
"Neither Disney or Universal have ever bought someone else's theme park so
you have got history working against you there," he said.
While Disney might not jump on the opportunity, Niles said he expects
Ohio-based Cedar Fair L.P., who already owns and operates eight amusement
parks in the United States, to take a serious look at the Paramount Parks
offer.
"If you look at the geography, [Paramount Parks] would match up well with
the Cedar Fair parks," he said. "The question is do they have enough money
to buy the whole thing or might they try to pick off a park or two in a
partnership with somebody else who might join with them in a takeover?"
CBS would not comment regarding if the company would break up the Paramount
chain and sell each park individually.
"There are so few potential buyers here I think it is just more likely from
a fiscal stand point to just sell them off as one whole thing," Niles said.
"Also, unless [the buyer] goes through and rebrands each attraction that
already has Paramount or Nickelodeon branding on it all ready, they are
going to have to deal with some kind of secondary deal on the licensing as
well."
The worst case scenario
According to a company press release, CBS Corp. said it plans to keep all of
the parks operational during the sale but plans to have the parks sold off
by the second quarter of 2006.
What happens then?
Speaking in the hypothetical world, Niles said if someone does go ahead and
buy the whole chain, that doesn't necessarily mean that they will keep all
of the parks open.
"It is entirely possible that someone may decide to buy the whole thing and
then close off one or more of the properties, selling them for real estate
value or to some other smaller theme park operator somewhere," he said.
If the buy-it-and-close-some option was exercised, Niles predicted the first
park to go would probably be Paramount's Great America park in Santa Clara,
Calif.
"It hasn't been developed as much as the other properties have been," he
said. "Obviously the land in the San Francisco bay area is about as
expensive as you can get in the country and a lot of developers would pay a
lot of money to come in on that land."
The Bitch is Back.
the old curmudgeon of carowinds connection
"It rubs the lotion on its skin or else it gets the hose again."
facebook/twitter: maxservo65
the old curmudgeon of carowinds connection
"It rubs the lotion on its skin or else it gets the hose again."
facebook/twitter: maxservo65
