Joined: Feb 21, 2006 Posts: 4196 Location: Sanford, Fl
Posted: Thu Apr 09, 2009 3:12 am Post subject: Universal Studios in Financial Trouble?
According to this [url=http://www.orlandosentinel.com/business/orl-bk-universal-orlando-finances-040709,0,2569937.story[/url], Universal Studios Orlando may be facing a very series credit problem in the near future... It even lookings like they may default on several large loans...
I decided to post this as some what a response to all of the upset Disney fans out there. The Disney fans who are upset that Disney cancelled most of the WDW projects, scaled back the few projects that are going forward, and not adding any new rides in the near future. These are the fans that are angry at Disney for not doing anything, while Universal is spending money and expanding (new roller coaster, new Harry Potter land, etc...). Well, Universal may be expanding, but these projects could end up helping put Universal in some serious financial trouble.
Now, that doesn't excuse Disney for what they have done (cut backs, cancelled projects, etc...) but it shows that large scale expansion may not be the best idea right now... _________________ Up or Down North, South, East, or West An Adventurer's Life is Best!
Joined: Nov 09, 2005 Posts: 10426 Location: Swansea Mass.
Posted: Thu Apr 09, 2009 3:29 am Post subject:
I think Disney is taking the right approch at this time.
When the economy is not so good or even bad spending extra money on
exspanding and new rides isn't the best idea.
Keep spendng down while keeping your service levels up and your guests
happy is the smart play at this time.
Then when the economy gets better the bussiness hat took care of bussiness
will have the resources to improve and exspand then.
Just a little common sence, as long as they don't put Goofy in charge.
Universal is always in financial trouble, but this is newsworthy only b/c they spent a massive amount of capital to upgrade the park: Harry Potter, Rockit, New stage, etc.
G&E hasn't ponied up the dollars yet until the new fiscal year. This really isn't news.
Joined: May 27, 2007 Posts: 300 Location: Connecticut, USA
Posted: Fri Apr 10, 2009 7:08 am Post subject:
While I think Disney may be a little too cautious, I think they have been a lot smarter than Universal. Also, Disney IS in the midst of rebuilding DCA (Most of it NEEDS work) and just wrapped up the Hong Kong inveestment.
The Contemporary Hotel Additions and the two new cruise ships (does Tom get a royalty for that name?) also are costing a pretty penny.
Gee, it ALMOST sounds as if Bob Iger is doing a good job. Of course I would like to see the show schedule returned to normal so we can see Fantasmic more than once a month. Overall though, while they are a little over cautious, it seems as if they are doing well.
Most of Universal's problems are with competitive over-expansion rather than well timed. They did everything at once instead of pacing themselves. Having never read the Potter books, perhaps they could have let that one sit for a while.
Joined: Feb 21, 2006 Posts: 4196 Location: Sanford, Fl
Posted: Tue Aug 11, 2009 4:37 am Post subject:
Another update on the financial status of Universal, they have confirmed that they are working on the buy out of Steven Spielberg. This buyout could cost Universal millions of dollars and would allow Spielberg to work with other theme park companies:
Universal Orlando says it has begun discussions to address a potentially lucrative buyout clause in the consulting contract it has with famed director Steven Spielberg, a provision that, if exercised, could cost the resort several hundred million dollars.
During a conference call to discuss Universal's second-quarter earnings, Universal Chief Financial Officer Tracey Stockwell said "ongoing discussions..are being held" about Spielberg's buyout clause, which the Hollywood mogul can exercise beginning June 2010.
"We are hopeful for resolution in the short term," Stockwell added, according to a transcript of the call that Universal filed with the U.S. Securities and Exchange Commission.
Stockwell did not elaborate further. A representative for Universal Orlando, which is co-owned by NBC Universal and the Blackstone Group, could not be immediately for comment this morning.
It is the first indication that Universal is actively attempting to renegotiate the buyout terms with Spielberg, whose movie hits have inspired multiple attractions at Universal Studios Florida and Islands of Adventure, such as Men In Black Alien Attack and Jurassic Park River Adventure.
I bet they are asking Ol' Stevie boy to take less on the buyout .... " I know we promised you hundreds of millions steve, but you see... well..... we got this Harry Potter thing... and the well... The Simpsons kinda drained us a bit and well there was this fire in California..... would you take $10 and free admisssion for life??????"
interesting thought is the line about him being able to play with other parks after the buy out. If they let him go free market, this could be good for companies like Disney.
Other question... Could Universal get Spielberg to postpone buy out until economy improves by padding it?
Joined: Feb 21, 2006 Posts: 4196 Location: Sanford, Fl
Posted: Tue Oct 20, 2009 12:04 pm Post subject:
Time dwindles but optimism rises as Universal works to redo debt
Universal Orlando now has less than six months remaining until an April 1 deadline to refinance $950 million worth of debt, and the resort has yet to announce any new deals with either its lenders or with director Steven Spielberg, who holds a lucrative consulting contract with the resort that has complicated the restructuring effort.
Yet investors now appear more confident than they were just a few months ago that the resort will be able to complete the refinancing on time.
A check last week showed that all of Universal's corporate bonds were trading above 98 cents on the dollar. That's far higher than this past spring, when some of Universal's bonds had sunk below 30 cents on the dollar.
The rebound in Universal's bond prices largely reflect improvements in the overall debt market that have made it much easier for companies to refinance their loans.
Other developments may have also heartened Universal's bondholders. The most notable: The recently announced $2.7 billion purchase of Busch Entertainment Corp. by the Blackstone Group, which holds a 50 percent stake in Universal Orlando. ( General Electric Co.'s NBC Universal unit owns the other half.)
The Busch purchase, which involves SeaWorld Orlando's parent company taking on about $1.3 billion in debt, both provides further evidence of recovery in capital markets and helps demonstrate the value of destination theme parks.
The above blog post is from a few days ago, it was followed up by this one:
Universal Orlando amends agreement with Steven Spielberg
payments.
Universal Orlando fended off a potential cash crunch this week by extending a 22-year-old agreement with movie director Steven Spielberg.
Under its consulting contract with Spielberg, the filmmaker is entitled to a percentage of Universal’s gross revenue in perpetuity. But next June, Spielberg would have become eligible for an immediate buyout, which analysts said would likely have cost Universal several hundred million dollars.
That pending payout was complicating Universal’s efforts to restructure nearly $1 billion in debt that comes due next April.
Under the new agreement with Spielberg, which was disclosed in financial filings Tuesday, the director’s option to take a one-time payment is delayed until June 2017.
Spielberg's movie hits inspired multiple attractions in the resort's theme parks, including E.T. Adventure, Men In Black Alien Attack and Jurassic Park River Adventure.
In a separate announcement, Universal Orlando also said it plans to offer $400 million in senior unsecured notes and $225 million in senior subordinated notes in a private placement. The company said it plans to use the proceeds of the offering -- along with $900 million in credit – to retire outstanding senior notes that come due next year.
You cannot post new topics in this forum You cannot reply to topics in this forum You cannot edit your posts in this forum You cannot delete your posts in this forum You cannot vote in polls in this forum
Utilidors Audio Broadcasting / Utilidors.com / uabmagic.com are in no way affiliated with, endorsed or promoted by the Walt Disney Company or any of its subsidiaries.
All Music and requestable media Copyright the Walt Disney Company or their respective artists / Composers.
