Vortex ride Delayed at SW

[aaronm]

4 minutes ago, Jdude95 said:

We've seen before what happens when a theme park is taken over by people who aren't in the business of running a theme park *cough* ardent leisure *cough*

Valid point, though I think Macquarie/Ardent is definitely the "worst case scenario" example. It can go the other way as well - SeaWorld/Busch did pretty well under Blackstone ownership. It's great that we finally have people who understand theme parks running VRTP but the chain still isn't as profitable as it should be which doesn't bode well for the future of the parks under the current management team. They can only blame disappointing results on the Dreamworld accident for so long...

[DaptoFunlandGuy]

1 hour ago, joz said:

if the only thing that is being hyped at a park isn't open I'd be bummed.

But Joz, it wasn't the only thing being hyped! They had a nighttime water fountain  spectacular in the lake that they were telling everyone about (if you pay extra, only on certain nights, may already be sold out because a whole bunch of people got free passes). They had carnivale!

You should not be bummed! You should hand them your wallet and be thankful there is a park willing to take as much of your money as possible!

32 minutes ago, aaronm said:

Curious what you're basing this view on? PEP pumped a stack of money into Hoyts right after they bought the business. Most of these private equity firms are looking to grow the value of their acquisitions and sell them off for a profit, which generally involves serious capital expenditure. Any interim operating profits are a bonus. I suspect that the parks are probably more likely to see major additions under private equity than they have as semi-public companies.

Did they pump a stack of money into the business? or did they leverage assets and take on debt to fund the makeover?

Most private equity firms seek to squeeze the money out of the business. decisions are made based on "how tight can we squeeze" rather than "what will make our guest's day better?"

The end game of private equity is to make as much money as possible. They don't have experience in running specialised operations - like theme parks. They'll keep on existing management, tied to 'earn-on' contracts, or they'll find a guy who knows how to run a theme park who is currently out of work (a big red flag in itself) to do it. OR they'll bring in an airline safety specialist, or a food and beverage and hospitality manager - because its all tourism and leisure right?

Once they have extracted the purchase price out of the business, anything else they do with it really doesn't matter because everything else is profit. the second it stops supporting itself, and starts losing money, and therefore, requires more capital injected to keep it running - they'll cut their losses and sell up shop, and at any price to any buyer, because they've already made their money back.

(See also: Dick Smith Electronics - a business bought for $115M from Woolworths, but Anchorage only paid $10M, and in a splendid demonstration of corporate accounting, managed to float the business a couple years later for $520M, only to see it fold a few short years later.)

As you say - they aim to sell them off for a profit. In many cases, the whole is worth less than the sum of its parts, and we could see each park, asset and business sold off separately, which at the very least, means far more expensive annual passes for those who like to visit all the parks on the coast.

10 minutes ago, aaronm said:

It's great that we finally have people who understand theme parks running VRTP

Thats definitely a matter of opinion.

To continue on - if they do cash splash based on loading debt onto the business, and then they can't flip it, if they've made their returns on the business, the only thing left to do is liquidate.

If only there was a global economy downturn, an outbreak of a viral disease, and the collapse of a national air carrier to blame things on, it'd be a perfect exit!

[Jdude95]

22 minutes ago, AlexB said:

If only there was a global economy downturn, an outbreak of a viral disease, and the collapse of a national air carrier to blame things on, it'd be a perfect exit!

Anyone checked on Jetstar recently? They still holding up?

[Zanstabar]

59 minutes ago, themagician said:

Foundations have been laid

Fountain Reaccs Only

[aaronm]

47 minutes ago, AlexB said:

As you say - they aim to sell them off for a profit. In many cases, the whole is worth less than the sum of its parts, and we could see each park, asset and business sold off separately, which at the very least, means far more expensive annual passes for those who like to visit all the parks on the coast.

I'm not sure the parks business would be split up. The most logical separation would be to sell off WnW Sydney, which has already been done. The GC parks are definitely worth more as a group, and are arguably a more reliable operation than the volatile film production/distribution companies - IMO that's the most likely split in the event a private equity firm decides to divvy up the group.

[Jdude95]

1 hour ago, aaronm said:

I'm not sure the parks business would be split up. The most logical separation would be to sell off WnW Sydney, which has already been done. The GC parks are definitely worth more as a group, and are arguably a more reliable operation than the volatile film production/distribution companies - IMO that's the most likely split in the event a private equity firm decides to divvy up the group.

Except that random marine park that is 40 minutes down the road and not attached to the same mega property that the other theme parks/studios/event venues are housed on.

[Slick]

5 hours ago, Jdude95 said:

Except that random marine park that is 40 minutes down the road and not attached to the same mega property that the other theme parks/studios/event venues are housed on.

I'd almost agree, but the hotel is "Australia's only theme park resort" and is a real money spinner for the chain.

[DaptoFunlandGuy]

On 31/01/2020 at 1:52 PM, aaronm said:

I'm not sure the parks business would be split up. The most logical separation would be to sell off WnW Sydney, which has already been done. The GC parks are definitely worth more as a group, and are arguably a more reliable operation than the volatile film production/distribution companies - IMO that's the most likely split in the event a private equity firm decides to divvy up the group.

...and those volatile film production/distribution companies occupy a large chunk of land right in the middle of the theme park "precinct". They currently work together harmoniously, with the many trades cross-utilised between the studios and the parks, and facilities shared. If they were owned by separate companies, there would be a loss of symbiosis that currently exists on the oxenford lot.

[aaronm]

1 hour ago, AlexB said:

They currently work together harmoniously, with the many trades cross-utilised between the studios and the parks, and facilities shared.

If these synergies are as incredible as you're suggesting it's a shock that they don't seem to translate into noticeable financial results for the company.

But my point was more in response to the suggestion that there would no longer be a single annual pass for all three parks - it seems far more likely that any eventual split of the group would be down the film/theme park lines, rather than selling off individual parks. 

[DaptoFunlandGuy]

A fair point - however my point has always been that the private equity firms are always going to do whatever generates them the most money regardless of the legacy they leave behind.