Before yesterday's revelation that Viacom
He realizes what Viacom doesn't. The company's North American parks should very well be the core of any entertainment conglomerate. With more than 10 million guests clicking through the parks' turnstiles last year, why would a media giant not relish the captive audience as a way to funnel them to Viacom's broadcasting properties like CBS, MTV, and Nickelodeon?
I don't like this at all. From spinning off Blockbuster
If Viacom has failed to use these magnetic limbs appropriately, it can only blame itself. Yes, it stinks that its shares are trading lower than they did one, three, and five years ago. But landing a billion bucks to shore up its finances would come at the expense of relinquishing some great assets. And I'm not just saying that from a distance. In the summer of 2003, I went to three of the company's five parks and liked what I saw, but recognized that Paramount -- like just about every other amusement park chain -- is simply scratching the surface in synergistic potential.
Besides, who else is going to step up and start a bidding war here? Disney
While Cedar Fair would normally be good to scoop up at least one or two of the properties, the operator is still floored by the abysmal performance at Geauga Lake, which it acquired last year. In handicapping the odds with Screamscape's Lance Hart earlier this week, it was clear he would also write off Anheuser-Busch because it has not shown an interest in expanding its amusement park empire in ages.
Unless an overseas giant wants in -- which is always possible given the weak dollar -- that means that Viacom will be stuck with folks looking to take the parks private and that would be a mistake. Perhaps Don Snyder and Microsoft's
Any company that relies on sponsors and consumers as its lifeblood would be an idiot to dump properties in which folks are willing to line up and wait for something to happen. If it doesn't see that, I'd better see if I can locate a good collection tray.
Some recent amusement park stories:
- Paramount's new waterpark helped results last year.
- Six Flags had a strong finish to 2004.
- Then again, so did Cedar Fair.
Longtime Fool contributor Rick Munarriz took the family to Paramount's Carowinds, King's Island, and King's Dominion parks in June of 2003. He owns shares in Disney and units in Cedar Fair. The Fool has a disclosure policy. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.