Comcast (Nasdaq: CMCSA) (Nasdaq: CMCSK) is coping with cord-cutters. Now it wants some more skin in tackling line-cutters.
The cable giant is interested in acquiring all of the Universal Orlando resort in Florida, in news that was originally reported by entertainment blog The Wrap but confirmed on Tuesday by The Orlando Sentinel.
Comcast already had a 50% stake in Universal Orlando -- which includes the Universal Studios Florida and Islands of Adventure theme parks, CityWalk entertainment complex, and three third-party managed hotels -- through its NBCUniversal acquisition.
This wasn't necessarily Comcast's idea. Blackstone (NYSE: BX), the private equity giant that owns the other half of Universal Orlando, filed to sell its stake back in March. If Comcast didn't agree to buy it out by June 12, Blackstone would be free to sell the entire park (including Comcast's stake) to a third party.
Comcast's price tag will reportedly be as much as $1.5 billion. That may be a hefty sum, but Comcast really couldn't afford to lose the resort. NBCUniversal owns its original California park outright, and if Comcast wants to challenge Disney (NYSE: DIS), it will need a physical presence on both coasts. Disney and Comcast also have a few parks abroad, largely through licensing deals.
Regional amusement park operators Cedar Fair (NYSE: FUN) and Six Flags (NYSE: SIX) run their gated attractions for profit, but Universal and Disney use their costlier theme parks to promote their films, television shows, and characters.
Universal Orlando has settled into a good groove these days. Attendance soared 20% last year, fueled by the turnstile-twirling excitement over the opening of The Wizarding World of Harry Potter. A change in ownership could've threatened the licensed attractions and rumored expansion, but all will be as smooth as frozen butterbeer once Comcast no longer needs to consult with its other partner.
Why did Blackstone even present this ultimatum? Maybe it just wanted the resort all to itself. Blackstone will open a Legoland theme park an hour's drive away from Universal Orlando in October, and it also owns the nearby Sea World and Busch Gardens attractions.
Things will definitely get interesting between the two theme-park mavens. Disney and Comcast have had a lucrative relationship in cable programming for years, but all is fair in love and war when turnstile clicks are involved.
Is Comcast making the right decision, or should it not be doubling down in Florida? Share your thoughts in the comment box below.
