Comcast (Nasdaq: CMCSK) is ready to take on Disney (NYSE: DIS) on both coasts.
In a deal that was widely expected to happen, the cable giant will acquire the remaining 50% stake in Florida's Universal Orlando resort that private-equity giant Blackstone (NYSE: BX) holds. The purchase will set Comcast back $1.025 billion, subject to adjustments.
The only real surprise here is the price tag. It was originally reported that Comcast would have to pay as much as $1.5 billion for the resort, which includes the Universal Studios Florida and Islands of Adventure theme parks, the Citywalk entertainment complex, and three hotels.
Comcast would've been nuts to pass on the chance to swallow the operations whole. Attendance spiked 20% last year, and that was with the magnetic Wizarding World of Harry Potter feature opening within Islands of Adventure halfway through the year. This should be another blowout year. Because of Comcast's NBC Universal acquisition, it just wouldn't have seemed right if it didn't own the central Florida attractions bearing the Universal banner.
It's not easy running an amusement park these days. Cedar Point parent Cedar Fair (NYSE: FUN) has been battling activist shareholders over the past year -- and losing from time to time. Six Flags (NYSE: SIX) emerged from bankruptcy last year. Indoor water-park operator Great Wolf Resorts (Nasdaq: WOLF) has a pair of properties that are now worth less than their underlying loans.
The outlook is rosier for Comcast. Its theme parks in Florida and California are open year-round, unlike many seasonal amusement parks. Its parks also serve as springboards to promote its own content.
Universal Orlando announced last month that it will replace an attraction themed with Viacom's (NYSE: VIA) Jimmy Neutron with one based on its own Despicable Me franchise. As long as the new ride's downtime isn't similar to my experiences with Comcast's broadband service -- yep, had another outage for nearly an hour this morning -- Comcast will come out ahead here.
Let's have some fun: Come up with some Comcast-themed rides for the resort. Share your thoughts in the comments box below.
