Blackstone Group To Sell Its Share In Universal Orlando
ORLANDO (CBS4) - There could be a shake up in the land of Harry Potter and superheroes to our north. The private equity firm Blackstone Group LP, which owns 50 percent of the Universal Studios theme parks in Orlando, has offered to sell its stake back to the other co-owner NBC Universal Inc.
Cable giant Comcast Corp., took control of NBC Universal in January by buying a 51 percent stake in the company; General Electric Co. owns the remaining 49 percent interest.
Universal City, which does business as Universal Orlando, reported in a Monday regulatory filing that NBC Universal has until June 12 to accept the offer. If NBC Universal rejects the offer, Blackstone will have 270 days to sell the Florida theme parks to a third party, the Securities and Exchange Commission filing said.
A sale would have huge implications for the theme park resort since some of their most importand licensing contracts, including the one with Warner Bros. for the rights to Harry Potter, have clauses which state that Universal could lose those rights if it is acquired by a new owner.
Moody's Investors Service also said that director Steven Spielberg, who has a consulting agreement with Universal Orlando, may have the right to sell his agreement to a potential third-party buyer. Moody's said starting in June 2017 Spielberg has the right to end the consulting deal and receive a one-time payment equal to fair market value of his stake in the parks and all other "comparable projects."
According to the Orlando Sentinel, the resort could potentially even lose the right to the name "Universal". However, any sale would almost certainly only happen Universal could provide assurances to a new buyer that it could maintain licensing rights to it most profitable properties including Potter.
The Blackstone Group, which has owned its stake in Universal Orlando for 11 years, said Tuesday that it has benefited from the sale of Harry Potter-themed products and exclusive vacation packages featuring early entry to the Harry Potter attractions.
Universal Orlando is currently having its strongest financial run in its history; it reported record attendance, revenue and profit after last year's opening of the wildly popular Wizarding World of Harry Potter in its Islands of Adventure park.
Blackstone Group, which owns SeaWorld in Orlando, Fla., manages $140 billion in a portfolio of real estate, hedge funds, private equity and related businesses. In February, the New York company reported its best quarterly earnings result in nearly four years.
NBC Universal owns the nation's fourth-ranked TV network, NBC; the Universal Pictures movie studio and related theme parks; and a bevy of cable TV channels including Bravo, E! and USA.
(©2011 CBS Local Media, a division of CBS Radio Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press and The Orlando Sentinel contributed to this report.)
