Why Anheuser-Busch InBev hasn’t sold its theme parks
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Will Anheuser-Busch InBev sell Busch Entertainment? A year ago, it seemed like a fait accompli that the combined company would sell its theme-park division, which include Busch Gardens and SeaWorld. Theme parks, it would seem, are the definition of “non-core” if you are a multinational brewer.
But InBev did not abide by the assumed script. And about eight months after InBev officially took control of Anheuser-Busch, the theme parks are with the company still. Our story today in the St. Louis Post-Dispatch examines why.
“We’re hearing nothing about a sale,” said Paul Ruben, North American editor of Park World magazine. “Primarily because there doesn’t seem to be a buyer out there with deep enough pockets.”
It’s a tough time for the theme park industry. Attendance is down or flat, whereas most normal years bring an increase of a couple percentage points. A number of parks have instituted price cuts - thereby sacrificing profits - in a bid to keep attendance up in a troubled economy.
All in all, parks “seem to be hanging in there,” said Gene Jeffers, executive director of the Themed Entertainment Association, a trade group for park operators. Jeffers said the industry’s decline is not “alarming.”
Be that as it may. In any case, potential buyers and sellers of parks are not exactly beating a path to each others’ doors in this environment.
But for a buyer who eventually ponies up the cash, “the Busch parks are money-making parks that are beautifully run,” Ruben said. “Anybody that owns them will make a decent profit.”
What if a buyer doesn’t pop up?
One option should be spinning off Busch Entertainment as a separate company, said John Gerner, managing director of Leisure Business Advisors LLC in Richmond, Va. To our knowledge, there hasn’t been much public discussion of that option.
“Assuming the economy improves soon, I wish they would consider rolling out Busch Entertainment” as an initial public offering, said Gerner. “There isn’t a quick exit for them at this point. I think Busch as an independent company could be a major player in our industry.”
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Jeremiah McWilliams is a native Virginian who came to the Post-Dispatch in early 2007 to cover beer and other consumer products. He previously covered manufacturing for the Virginian-Pilot newspaper in Norfolk, Va. He is a graduate of Washington and Lee University. 
Anyone remember Campbell-Taggert? AB successfully spun-off this subsidiary back in 1995. This is a possibility but tough to pull off in our current economy. I would love to see it happen because it wouuld be good for all involved.
Could it be they are not up for sale yet is because they make money?
InBev didn’t realize how much money these parks actually make. Plus they can’t get the right amount of money that they need right now. So, if you have no one giving you what you want and there really isn’t a market for the theme parks, they won’t sell. Trust me when the time is right, these parks will be sold fast. InBev isn’t in the theme park business.
The BEC parks are well run and make money. However, Inbev is a highly leverage international beer company that is focused on costs and expanding markets (less successfully). They can not get the price they want for the parks at this time despite the fact the parks are making money. Once the capital markets loosen up and the overall economy support growing amusement parks revenues, BEC will be sold or at least spun off to pay down the debt load at Inbev. If the debt load becomes unsupportable by Inbev operations, the parks could be sold off in a fire sale, but currently their financials are strong enough that they can hold off. BEC will be gone one day relatively soon.
What people don’t realize is that they have raised prices on admission and parking, plus some cuts here and there within the parks. Sounds to me like they are trying to get every penny they can before they flip it. People just don’t really understand how money hungry InBev really is. I know all companies are, but these guys take it to another level.
I’m sure Brito is cringing at the cost of the new Manta ride. It will be 40+ MM by the time it’s completed. This money pit will be unloaded at the first feasible opportunity. Sea World is a cross between a glorified Six Flags and a small town zoo. This is nothing InBev has any long term interest in.
The handwriting is on the wall.
Man,do I love my long neck Miller Draft,and they go well with a “Burrito”.