From the Orlando Business Journal
Four theme park take-aways from Comcast’s 3Q report
Richard Bilbao - Reporter - Orlando Business Journal
NBCUniversal’s parent company, Comcast Corp., knows it has something precious in Universal Orlando Resort and the rest of the company’s theme park business.
According to its third-quarter results, Comcast (Nasdaq: CMCSA, CMCSK) saw a 7.9 percent jump in theme park revenue, which can be attributed to openings of new attractions like Transformers, The Simpsons’ Springfield and more.
But there was more Comcast executives shared from a morning conference call with investors and analysts. Here are four key takeaways from the call:
1. Theme parks biz = Good biz
Comcast executives couldn’t be happier with the production coming from its theme park sectors.
“This is the largest quarterly operating cash flow in the history of the theme parks [due to] higher attendance at Orlando fueled by the successful opening of the Transformers attraction in Orlando,” said Michael Angelakis, chief financial officer with Comcast.
Operating cash flow for the quarter was $343 million, which is impressive at first glance. But the figure is staggering when you take into account the total-year operating cash flow of NBCUniversal’s theme park sector was $400 million prior to Comcast’s acquisition of the company in 2009 — this year, they expect to reach $1 billion in operating cash flow.
2. Execs reaffirm spring 2014 for Harry Potter II
Opening dates at a theme park can fluctuate anytime. But Comcast executives doubled down on the fact that Universal Studios Florida’s portion of the Wizarding World of Harry Potter will open in spring 2014.
Executives said the expansion should open shortly after the theme park unveils the 1,800-room Cabana Bay Beach Resort, which is expected to open sometime in March/April.
If that’s the case, it puts Orlando in a better position than even the first Harry Potter addition, which opened in June 2010. A spring opening of the expansion guarantees added hype for Orlando travel and should give a great boost to the summer tourism season.
3. Marriage of theme parks and film is still No. 1
Movies. The Universal theme parks were built on that foundation and Comcast doesn’t appear to miss that importance.
When asked by analysts how film will play into the company’s consumer products like the parks, executives said they have grown “increasingly bullish” and expect to continue to use the products as a strategic foundation for investing in the theme park — hence Harry Potter, Transformers and Despicable Me.
Executives did not mention the multi-year partnership between film companies Universal Studios and Legendary Entertainment announced in July, but that also reiterates the potential Universal theme parks have in terms of new investments.
Back during that announcement, Ron Meyer, president and COO of Universal Studios, said the company was “excited about what opportunities this will bring to our theme parks around the world.”
4. Spend big or go home
Comcast said capital expenditures at the company are on the rise. For the first nine months of the fiscal year, the company has spent $807 million in its NBCUniversal division with “increased investments” in the theme park sector. In comparison, the company spent about $476 million in the same time frame last year.
Executives said they expect to invest $1 billion total throughout the NBCUniversal brand.
Now, most of that money will still go into the construction of the Harry Potter expansion, but it does leave room for NBCUniversal to potentially make many rumored expansions become a reality.
For example, online chatter speculates that a King Kong attraction could make a return to Universal Orlando at Islands of Adventure. Rumors say Universal could be looking for land in between Jurassic Park and Toon Lagoon to build Skull Island — the home of the massive gorilla.
The full Comcast conference call is available on its investors site.