The 1998 Tussuads Bidding War

[Bert2theSpark]

I've just stumbled across an article from 1998 when Pearson was selling off Tussuads.

Link Here

THE FAMOUS London waxworks, Madame Tussaud's, was put on the block yesterday in an auction of tourist attractions that includes the London Planetarium and Alton Towers.

The Tussauds group, which runs the sites, was put up for sale by Pearson, the media group whose interests range from the Financial Times to Baywatch.

Pearson said it had decided to put the group up for sale after receiving a number of offers for the group. Marjorie Scardino, Pearson's chief executive, said: "We have decided that this is a good time to test whether Tussauds might be even more valuable to a new owner. They will have to offer a good price to convince us that it is." Analysts said the business could fetch more than pounds 300m.


Pearson took over Madame Tussaud's in 1978. Despite competition from other London venues, the prospect of seeing film stars, politicians and leading sportsmen and women recreated in wax has continued to pull in visitors from all over the world. Last year, Madame Tussaud's was London's top tourist attraction, with 2.8 million visitors.

Apart from the London branch, there is a smaller version of the waxworks in Amsterdam and Tussauds is also planning to open new outlets in New York and Las Vegas.

Alton Towers, in Staffordshire, which Pearson bought in 1990, recently launched Oblivion, the world's first vertical roller coaster. Visitors to the park can also enjoy an ice show that features Beatrix Potter's Peter Rabbit.

Tussauds also runs the London Planetarium, which is next door to Madame Tussaud's on Marylebone Road, and the Rock Circus complex in Piccadilly. Other theme parks include Chessington World of Adventures, and Warwick Castle, a historical museum that hosts medieval battles.

Earlier this month, Tussauds agreed to buy the Thorpe Park complex in Surrey, and just yesterday it sold its 40 per cent shareholding in the Port Aventura theme park outside Barcelona for pounds 58m. All in all, the Tussauds venues attracted 12.9 million visitors last year and made a profit of pounds 22.3m.

Analysts reckon the group could attract a number of high-profile buyers. Time Warner, the US media giant, might be interested, as might Universal, the Hollywood cinema group.

In Britain, First Leisure, the nightclub and wine bar operator that also owns Blackpool Tower, may be interested. Rank, the Hard Rock Cafe owner and bingo operator, is also understood to have had a close look at the business.

But industry observers say the Tussauds management team is most likely to win the auction, with the support of a team of venture capitalists.

It may seem puzzling that Pearson wants to sell such a successful business. But the group has recently decided that it wants to concentrate on its media assets, which include financial and educational publishing as well as television. Since Ms Scardino took the helm 18 months ago she has sold off the group's ailing computer games business and its consumer publishing arm. Pearson's stake in the Lazard investment banking group is likely to be the next to go.

Wax Facts

1. Some 2,400lbs of wax has been used in the 365 figures.

2. Sculptors require more than 150 measurements of a subject's face and head to create a life-like portrait.

3. About 500 million people have visited the attraction.

4. It takes six months and costs about pounds 20,000 to make a figure.

5. The building survived a fire in 1925, an earthquake in 1931 and some of the worst bombing of the Blitz in 1940.

6. Only real human hair is used on figures.

7. Joanna Lumley is the most touched waxwork.

8. The most photographed figures are those of Diana, Princess of Wales, and Arnold Schwarzenegger.

Interesting to know that Warner Bros and Hard Rock Cafe were part of the bidding war as well as Universal.

And for those interested that £300 mill back then is worth ~£500 mill (Obviously the asset value has changed since then though).

I wonder what have happened if Hard Rock Cafe, First Leisure, Warner Bros or Universal managed to get their hands on Alton Towers.

 

[JB1985]

We shall never know

Interesting find though - I would have thought Universal would have been amazing

 

[Robert.W]

I can just imagine it now... "Universal's Alton Towers" or something like that. Kind of glad they never got it though, probably would have had too many IP's for my liking... and I imagine they'd have sold it off at some point, maybe to someone even worse than Merlin... we'll just never know.

 

[Rick]

Universal would have been interesting but I think it would have taken Alton in a bit of a different direction - who knows! Their foray into the European market was somewhat brief.

I would have liked to have seen what Granada would have done with Alton, at one time.

It's difficult to know who was looking with serious intentions of making a bid and who just wanted to glance at the books when they were open.

There are a lot of companies who have had a romantic view of the industry and have bought into a park or a chain only for it to be a disaster as the complexities and risks became apparent.

 

[Matt N]

There are a lot of companies who have had a romantic view of the industry and have bought into a park or a chain only for it to be a disaster as the complexities and risks became apparent.

Would Six Flags' foray into Europe be an example of this?

 

[Rick]

Would Six Flags' foray into Europe be an example of this?

I guess that's the opposite. Six Flags were well versed in the industry. They had a strategy that wasn't working in the US that they decided to duplicate in Europe.

"Build it (to a level thay you can't afford or maintain) and they will (not) come"

 

[Matt N]

I guess that's the opposite. Six Flags were well versed in the industry. They had a strategy that wasn't working in the US that they decided to duplicate in Europe.

"Build it (to a level thay you can't afford or maintain) and they will (not) come"

Six Flags' strategy back then was to build massive coasters every year, wasn't it, or something along those lines?

Anyway, it would certainly have been interesting to see what any of the above companies could have done with Tussauds, or whether we'd even have seen the parks bought by Merlin had another company bought Tussauds?

 

[Rick]

Six Flags' strategy back then was to build massive coasters every year, wasn't it, or something along those lines?

Pretty much. And more so, buying parks and throwing $100m at the ride line up for little return. It was insane.

Anyway, it would certainly have been interesting to see what any of the above companies could have done with Tussauds, or whether we'd even have seen the parks bought by Merlin had another company bought Tussauds?

That's a little harder to call. If a park operator had bought them you'd have to wonder if they would have sold them.

One of those scenarios that's hard to work through because what happened has happened and everything else is just an assumption or a flat out guess.

 

[rob666]

Universal would have been interesting but I think it would have taken Alton in a bit of a different direction - who knows! Their foray into the European market was somewhat brief.

I would have liked to have seen what Granada would have done with Alton, at one time.

It's difficult to know who was looking with serious intentions of making a bid and who just wanted to glance at the books when they were open.

There are a lot of companies who have had a romantic view of the industry and have bought into a park or a chain only for it to be a disaster as the complexities and risks became apparent.

I'm glad Granada didn't take over...I remember skytrack...what a cock up that was.

 

[Rick]

I'm glad Granada didn't take over...I remember skytrack...what a cock up that was.

My back has never been the same either, BUT - a company trying to conquer something never been done before, from the epicentre of coaster innovation (Adlington, Lancashire) - it's very much in the spirt of what Arrow did, albeit not quite as successfully.

 

[rob666]

What, you actually got to ride the thing?
By the time I heard it was definitely open, it was actually closed!
Throughput of 30 people per hour was the best statistic.

 

[Rick]

@rob666 Indeed. I have some video on VHS somewhere, I'll dig it out one day.

 

[ChristmasPud]

"Build it (to a level thay you can't afford or maintain) and they will (not) come"

Or Merlin's successful strategy - throw £40m at an esoteric idea for a declining park, in such a way that cannot be maintained because the park's budgets are so squeezed (but that's someone else's problem) and only a few will like it. Ensure every new attraction is grey and serious because that's what the statistics say people want, until you have a grey run down park that fewer people want to visit.

And don't forget, overcomplicate things that have worked for years by overstructuring how your company designs & develops parks, until in-house projects become unaffordable, then give all decision power to short-sighted marketing departments and they will (not) come.

 

[Rick]

There's elements of truth in what you say @TakeYourMedicine but a fair amount of enthusiast folklore too.

If you take Ghost Train as an example, I genuinely think that at its best it's a phenomenal attraction - it certainly has some of the best set pieces ever seen in a UK park. The overall product has a lot of flaws - but I am largely supportive of being bold when it comes to creating new attractions.

The whole thing stinks of when people deride politicians for a 20 year old decision with two decades of hindsight. Tiresome.

 

[ChristmasPud]

The whole thing stinks of when people deride politicians for a 20 year old decision with two decades of hindsight. Tiresome.

For Ghost Train, I thought it at the time (having gone in with no hype and an open mind, ready to just have fun), and the redo that didn't tackle the core issues, and it was only a couple years ago, not 20. It turned out exactly as anyone who had looked at the big Merlin projects leading up to then could have predicted.

Most the public seem to think the same, which is weird because your usual claim is that 'Merlin do what the public want'. Well the ride has just become an expensive white elephant for Thorpe Park, like most Merlin's big projects.

The concept of the trains and how 'the illusion' and movement was meant to work was amazing, and I'm also really supportive of being bold. That in principle is amazing. But again, arrogant strategy and hurredly making decisions, without really having a handle on the entertainment factor, meant that it turned out poorly.

Merlin is a financial and marketing company, they operate and develop theme parks because they have to, it's a chore for them and they want to find as many ways to thin it out as possible, ultimately at the cost of the guest experience and value of their parks.

Wicker Man however I have really enjoyed and funnily enough that's the one that they had to take a leap of faith and ignore the marketing to do.

But would the parks have been better sold to a different company? I don't know. Initially Merlin taking on the parks from the investment banks is what saved them really. Merlin would have you think the way they run themselves is the only way parks can be successful today, but I think only according to their definition of successful. ie as fuel for their global expansion and biggest response to marketing.

 

[Rick]

@TakeYourMedicine I think the public like VR, so much so that at Alton they're willing to wait over an hour for Galactica when they could walk right on to Air.

I'm glad they tried something new, I am disappointed that they haven't found a way to make it perform consistently.