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Paramount Parks to be Divested


The Interpreter
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The parks are for sale as a chain, the chain is for sale, not each park seperately and yes KBF is somewhat withing "competitive" range of PGA, but Bonfante Gardens is even closer, Paramoun probably manages that park to keep competition like Cedar Fair from coming in, aquiring it, deleveloping it and competing.

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If the parks are for sale as a group then probably an investment firm is the only potential buyer. As someone else mentioned, Blackstone does have the buying power. Might be interesting since they own 50% of Universal parks and Legoland parks. They could still turn one or two of the biggest parks into a Universal label or/and add lego themed lands at each park. This would help them expand the lego end of the business without needing to build new parks.

Not to start and arguement but I dont see how KBF and Great America are in the same markets. They are almost 400 miles apart. That would be like saying PKI and Six Flags Great America in Chicago are fighting for the same market.

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They don't own 50% of Universal parks they own 50% of the Universal Orlando Parks. GE is the owner of Universal. If you want PKI to be Universal it will have to be bought by GE.

GE would have to buy the other 50% of the Orlando parks before I think they would take on more parks.

GE on CNBC said they didn't want out of the parks but was worried about the 50% that Blackstone has at Orlando.

I seen that Star Trek The Experience attraction is going with the parks so the rights must go with them. Star Trek The Experience wouldn't be much good with out the rights.

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You all are still assuming that it is going to be bought by a group already in the theme park industry... Like Universal, Disney, Six Flags, Cedar Fair etc. I think the only one of those who could buy the parks is Universal - and they probably wont. It will more than likely be a group we haven't really heard of.

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With that kind of news breaking and the virtual sale of the parks eminent, I suppose that will put a limit on what is being invested with NU. I can't see Paramount or Viacom investing a lot into the parks when the sales are basically in the works.

If the sale is to take place by middle of the year, the only numbers that really count are last years.

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Most likely an Investment group of some kind. It could actually be really good for the park. They could run the park and license Paramount brands. To us, this will probably mean very little - except bigger and better rides in the future than Paramount is capable of giving us.

The company will stay pretty much the same - it will just be owned by a different parent company. Look at Universal - it is owned by an investment firm - not Universal Studios. I think this can only be good news for us. Knowing you guys though you are probably going to panic... So - I would say don't worry about it - you won't see that big of a change. But go ahead and panic - not much else to do in the offseason. laugh.gif

I think Klockster said it best...I just hope Bigger and Better rides come outta this deal.

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Hopefully someone whose primary focus for revenue-generating is in family entertainment! This may sound ridiculous, but I hope it's picked up by people who happen to be PKI fans. I'd like to see Kings Island become the benchmark, flagship park by which all other parks are compared (including the Disney parks).

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Keep in mind that as part of CBS - we aren't getting anywhere near what we make in profits. Meaning that the money we make in profit goes back to CBS - then CBS lets us have a little bit of it. With a private group - CBS would get the money for the licensed theming - but then the profit made by the Paramount Parks, for the most part, would go back into getting better rides and maintaining the ones we have - at the same time earning a sizable profit for the investment group. Then also, CBS doesnt have to worry about running the parks. So everybody wins! Especially the theme park goers!

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Let's not fool ourselves into thinking that if an equity investment company buys the parks, they're going to look at it as some "pure" calling and run the parks with the same love we've all always wanted to... By definition, an investment company buys an asset, improves its value, then sells it later (either whole or in pieces) for a profit... There's no "love" involved. If it's announced that the parks will be purchased by Blackstone (or KKR, Madison-Dearborn, Texas Pacific, Morgan Stanley, or a slew of others), that's exactly what their exit strategy will be...maybe not today or tomorrow, but at some point. That's just the fudiciary responsibility of their management...

As far as operating the parks with "love" is concerned, the best thing to have happen in that regard would be a group of former KECO people getting the financing together to buy the parks...second to that would be CF. (Although, as I've said...they'd have to risk leveraging everything they have to do it...which wouldn't be very "fudiciarily" responsible to their unit holders in my opinion...)

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Let's not fool ourselves into thinking that if an equity investment company buys the parks, they're going to look at it as some "pure" calling and run the parks with the same love we've all always wanted to... By definition, an investment company buys an asset, improves its value, then sells it later (either whole or in pieces) for a profit... There's no "love" involved. If it's announced that the parks will be purchased by Blackstone (or KKR, Madison-Dearborn, Texas Pacific, Morgan Stanley, or a slew of others), that's exactly what their exit strategy will be...maybe not today or tomorrow, but at some point. That's just the fudiciary responsibility of their management...

You are absolutely correct. Unfortunately, it seems as though they'll improve the profitability through budget cuts rather than by improving the poduct itself. It's a quicker and cheaper way of doing things...

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You are absolutely correct. Unfortunately, it seems as though they'll improve the profitability through budget cuts rather than by improving the poduct itself. It's a quicker and cheaper way of doing things...

Actually that is likely a cost prohibitive proposition. It's more likely that a company that would want to purchase a group of amusment parks is looking to branch out or become involved in this type of business.

By no means is any park or group of parks an "easy sale." Someone looking to "flip" a business would not buy into a group of parks for the mere fact that it would be too difficult to realize a return on their investments.

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Cedar Fair, Cedar Fair! Sadly, that happens we will lose the Nicktoons(oh well), and possibly Scooby-Doo sad.gif .

Well the person the buys Paramount Park's can still use Nicktoons and Scooby with the rights. I thought I read some where they Blackstone whated some new Lego lands.

Edited by Vortex
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^

^

Of course, the same argument could be made about a chain of 100+ full-service hotels...not real easy to sell. Yet Blackstone bought Wyndham Hotels for over $3B, then "flipped" them to Cendant less than six months later...

Boston Ventures bought a huge stake in Six Flags in 1995, then flipped their investment three years later in 1998 by selling SF to Premier Parks...

Granted, both are unusual situations... And I don't completely disagree with your point--usually an investment of that size takes years to mature so that the purchasing company makes a return on the investment. And, of course, selling a chain of parks isn't going to be like flipping a house...

But, having worked around, for, and with investment companies for years, trust me that they always have an exit strategy. It's just the nature of The Beast...

Of course, we still don't even know who has got their check books out at this point biggrin.gif Maybe someone (thing?) who really does care about the theme park business will buy them... But recent similar sales (i.e., Legoland Parks) make me wonder...

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In response to Rollernut`s post about Paramount Parks not owning the land that Great America sits on. That is correct, but they have a long term lease agreement for the land with the city of Santa Clara. They signed a 50 year lease on the land back in 1989, so the park should be safe until at least 2039.

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In response to Rollernut`s post about Paramount Parks not owning the land that Great America sits on. That is correct, but they have a long term lease agreement for the land with the city of Santa Clara. They signed a 50 year lease on the land back in 1989, so the park should be safe until at least 2039.

Yes, but that lease is with Paramount Parks, a parent company could cause it to be terminated.

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Yes, but that lease is with Paramount Parks, a parent company could cause it to be terminated.

Depends on how the lease is written.

Remember, it's possible that the parks are being sold individually - in groups or as a whole.

I could forsee Canada's Wonderland being sold to a Canadian Conglomeration and the remaining US Parks being sold to a US Entity.

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I don`t think that whatever company which buys PP will sell off any land. For that matter, I doubt that there will be any drastic changes that occur to the parks this season. Whomever the new owner is of the parks, they will most likely implent changes, if any, next season.

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