Merlin Entertainments: General Discussion

[Tim]

I don't expect most people on here to actually be visiting Legoland regularly. But it is odd that it often gets glossed over completely.

Yes sorry I did, no idea how I confused that in my head apologies!

Legoland produce a lot of revenue for Merlin, and my hope is that the Shanghai park, and others will eventually stop being a drain on financial resources and instead actually add to the business (which I think its likely with at least the Shanghai park). They have however chosen some odd places to put Lego parks and I'm just not sure how they'll work out.

So the Legoland Parks both "produce a lot of revenue" and are "a drain on financial resources"?
This is exactly what I mean. Those two things cancel each other out. They can justify building new Legoland Parks based on the success of the others.

 

[JAperson]

So the Legoland Parks both "produce a lot of revenue" and are "a drain on financial resources"?
This is exactly what I mean. Those two things cancel each other out.

No they don't. Lego parks as a whole are very successful, but these parks are incredibly expensive to design, build and get open. Therefore the new parks that are yet to pay off there considerable debt are a drain on resources and debt financing. Once they have created enough revenue to pay off this debt, they will be producing profit, which then gives the rest of the company more resources.

They can justify building new Legoland Parks based on the success of the others.

Just because something works in one place, with one set of circumstances doesn't mean that can be repeated. Spending that much money building something 'because it worked somewhere else' isn't a good reason to do it. They should have taken a much slower, more careful and considered approach to what and where they were building these parks.

 

[Tim]

I'm certainly not going to disagree that a more cautious approach should have been taken when choosing where to build new attractions. The Legoland parks are only the tip of the iceberg in that regard. Some of the midway attractions have been built in really bizarre locations.

No they don't. Lego parks as a whole are very successful, but these parks are incredibly expensive to design, build and get open. Therefore the new parks that are yet to pay off there considerable debt are a drain on resources and debt financing. Once they have created enough revenue to pay off this debt, they will be producing profit, which then gives the rest of the company more resources.

That would be correct, if the newest parks were being payed for by Merlin. But as was previously pointed out the new parks are being funded by outside investment, with Merlin being payed to design them, and then manage the operations.
You are of course correct that some of the parks are still paying off construction debts, but what I wanted to highlight is that their is justification for building new legoland parks, and their impact on the business is significantly overstated. If Merlin chose not to build a Legoland park it wouldn't suddenly mean Alton Towers gets a new record breaking coaster instead.