The owner of the SeaWorld and Busch Gardens theme parks has been lining up credit as it tries to get through a pandemic for which there's still no end in sight. With one of its top parks closed indefinitely and its other parks looking at sharply reduced capacities, SeaWorld needs a backstop of cash to ensure that the company can pay its bills while making much-lower-than-usual revenue.
That's not exactly news, of course. All the theme park chains — including Six Flags and Cedar Fair — have been securing credit in response to the pandemic. What is news, however, is what else SeaWorld's interim CEO said that his company might do with the cash it's been borrowing.
Marc Swanson said that SeaWorld might be in the market to buy additional properties, in addition to paying bills with the money it's raising.
"There might be situations where there's market dislocation or competitors in industry who aren't able to weather the storm. So whether it's a water park, a hotel, or something like a park that we could look at and convert to a Sesame Place, for example, those are the type of things we're talking about," he said during SeaWorld's most recent conference call with investors.
As they say... very interesting.
Now, it's possible that SEI doesn't have its eyes on any properties at this time. By talking about acquisitions, Swanson could have just been trying to boost investors' confidence in the company. Higher confidence usually leads to higher stock prices, which, in turn, would protect SEI from becoming more of a takeover target itself.
But what if SeaWorld really is looking to buy? What could it afford? The company just closed the a private offering of $500 million of secured notes. That's a lot of cash, but how much does that really get you in the theme park business these days?
Remember that SeaWorld still needs a cash cushion in case its San Diego parks remain closed in 2021 and attendance continues to lag normal levels elsewhere around the country. And it's going to need to be sure that it can start repaying the money it borrows, even with shaky prospects for an economic recovery in the tourism industry. So it had better set aside a good chuck on this money for the very rainy days ahead.
But let's assume that the company could pull together something in the low nine figures to blow on a spending spree. Given that Disney and Universal can spend that much on a single attraction, fans ought to keep their expectations in check here when thinking about SeaWorld buying entire parks for that kind of money. SeaWorld's not going to buy anything among the Top 20 most-attended parks in the country. Heck, Swanson tried to set expectations lower than that, saying that the company was looking at water parks, hotels or Sesame Place-level parks.
So what's available there? Could SeaWorld buy one of the hotels around its property in Orlando in an effort to make that more of a true resort destination? Or should the company look to expand its footprint and buy into a new market? SeaWorld has water parks connected to all of its SeaWorld and Busch Gardens parks at this point. So any water or theme park acquisition likely would be in a new market for the company.
I'm sure that Theme Park Insider readers could nominate some candidates in or near their hometowns, so let's hear those in the comments. But in thinking about this, let's channel Buzz Price and think about feasibility.
I think the biggest "tell" in Swason's comments was his use of the Sesame Place brand. The company is converting its Aquatica water park in the San Diego area to the Sesame Place brand, which suggests how the company sees the current value of those two brands. Swanson's not talking about buying a new SeaWorld or Busch Gardens. But he is talking about acquiring a new Sesame Place. So let's think about markets where that brand best could work.
Personally, I would have loved to see Denver's Elitch Gardens become a SeaWorld-owned and operated Sesame Place, but the timing for that deal appears to have passed. Maybe Lakeside? Staying in the Rocky Mountain region, Salt Lake City's Lagoon offers great demographic potential for a family theme park, but perhaps too many thrill rides for the Sesame brand. Maybe SeaWorld could cut a deal with Cedar Fair for Kansas City's Worlds of Fun and Oceans of Fun? Or maybe Lake Compounce needs a savior?
Or, as I suggested earlier, perhaps this is all bluster and SeaWorld ain't about to buy anything. But Swanson has started the conversation. And with theme park owners across the country (and around the world) struggling during this pandemic, that conversation is only going to heat up until an industry recovery happens.
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When you can't pay for your new attractions, lay off most of your workers, carry huge debt loads and make headlines for manipulative board members making multiple new CEOs quit - do you have any credibility for a fish tale like this? This headline seems brought to us by the letters "B" and "S". :)
This park in my hometown recently became available (actually a few months before COVID-19 hit):
https://en.m.wikipedia.org/wiki/Fantasy_Island_(U.S._amusement_park)
It has 85 acres and an existing water park, The problem is, it would only be seasonal, due to being in the Northeast.
It’s also too big to convert to a Sesame Place, so they would probably have to go with some type of hybrid concept. It would definitely need a lot of improvements as well, including an expansion of the existing parking lot.
Another park that’s on the other side of the border, actually has a marine park inside it, desperately needs new Ownership if it will survive:
https://en.m.wikipedia.org/wiki/Marineland_of_Canada
There is a always a lot of controversy over the treatment of the animals, and the original Owner recently passed away. SWE would be the ideal company to take over the park, but I know there has been a lot of laws passed in Ontario recently that prevent any more acquisitions of marine animals, breeding, etc. So the future of this park pretty much has to be focused on phasing out the marine park.
While I wouldn't put it past SeaWorld to go for a waterpark or two where they could add a dozen kiddie rides and rebrand it Sesame Place, any amusement park large enough to be known outside its immediate area is probably way too big to even be considered. In my mind, somewhere the size of Gilroy Gardens would be the biggest I could see targeted, and anywhere with a major coaster is likely out. Personally, I suspect any purchase is one we'll have never heard of here until the deal goes through, but if you really want to look at possibilities, I'd search for medium-sized independent waterparks that were unable to operate this summer as potential options.
That said, I'd question the wisdom of a chain that seeks out new properties while letting attractions at their existing parks go unpaid, but SeaWorld hasn't exactly been making the brightest decisions as of late.
Right now, I'm stunned that a company in as rough shape as Sea World would be considering buying anything rather than focus on what they have.
One company’s crisis is another’s opportunity. This is potentially the biggest oppurtunity since the Great Recession.
Eventually, Covid 19 will pass. Some can’t see that now, but it will. Question is, who’s gonna be left? I have to give credit to anyone thinking about expanding during this crisis, because they see what others can’t and have the stones to at least potentially act on it.
Competing with Disney/Universal is a bit of a fools game. They have too much money. It’s not about beating them, it’s about finding opportunities that advance the company. If there is an otherwise profitable operation out there that lacks the capital to weather the storm, then I say go for it. Don’t be early 2k Six Flags dumb, but also don’t miss the boat if there is one.
Just a thought, but SeaWorld could move internationally. There are small chains like our VRTP chain in Australia (who run our Sea World park - notice the space) that are in the market for buyers. VRTP also have water parks including the Wet’n’Wild in Las Vegas and have started to invest in Asia. It wouldn’t be an awful time for an American company to pick up some cheap OS property to spread some risk.
In a perfect world they'd have more cash and would buy my home park, Six Flags Over Texas, away from Six Flags. I'd support that even though it's the original and the reason the chain is called what it is. But Six Flags treats the park as an afterthought even though it has the highest attendance outside of the big 3 (which makes sense really as those parks are located near the 3 largest metro areas in the country and Over Texas is located in the 4th largest). Would like to see a company that actually gives its parks cool rides to take over my home park. Oh well....
@nrainone - SFoT is treated pretty well compared to its peers. It typically receives one of the better new attractions every year. It was the second park in the chain to get a Justice League, and will open one of the more unique water rides when Aquaman Power Wave finally debuts. SFoT does have some unique challenges when building new attractions in that being one of the older parks in the chain, they have to respect the original design and layout of the park, and typically have to remove or relocate attractions to add anything "big". That significantly adds to the cost, which partially explains why SFMM, SFGA, and SFGAdv typically are above them in the food chain. I actually think that SFoT has one of the better and diverse ride collections in the chain, and they've done a good job trying to maintain the aesthetic of the original park while infusing it with newer rides and IP.
Robert, you definitely read my mind when you mentioned the park nearest me, Worlds of Fun. Cedar Fair has been trying to sell it for over 10 years, and it has been about that long since the last major ride (Prowler) was built. It used to be the best park in the Midwest, but Silver Dollar City has left it in the dust.
I’d rather see Disney buy SeaWorld and upgrade it to a US branded DisneySea but of course the marine animals vs the land animals might be a bridge too far :(
https://www.thestandard.com.hk/breaking-news/section/4/148233/Lawmakers-approve-HK$5.4b-bailout-for-Ocean-Park
Ocean Park Hong Kong is perfectly suited for a SeaWorld buy out. It was losing money but it has nearly finished building its hotel and new water park. All the debt is cleared by HK govt. It is looking for new management and a new direction and if SeaWorld wants to take it off HK govt's hands and turns it into a private enterprise, I think there will be no objection from anyone. SeaWorld can probably buy it at a very good price.
What about the former Schlitterbahn Kansas City? That park was the site of the worst accident in water park history and may be stigmatized because of that. Cedar Fair had the option to buy that park for a bargain basement price as an add-on to the Schlitterbahn parks they did purchase. Cedar Fair declined which has left the park abandoned and available. A complete re-branding and re-imaging could work. And the price tag would be a bargain.
I can’t imagine Cedar Fair would ever consider that since they already own Oceans of Fun in the KC area, and they have been trying to sell that park for over a decade and get out of the KC market entirely.
SeaWorld Parks & Entertainment Inc. is just the basic level. (Operations) The real main owners behind everything are still Zhonghong Group and Hill Path Capital LP, who took over shares from the Blackstone Group in 2017 and thereafter, right ? Anyway, for any huge investment company, the best moment to buy assets (such as business real estate property, a theme park..) at the lowest possible price due to circumstances, is a long term investment, regardless of eventual short term losses.
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The only “big” park in Washington is Wild Waves, and I can only wish that it would be bought by Sea World and given a refurbishment with theming and better rides - then I’d actually go!