PeteB
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In all seriousness, how much of a realistic possibility is this?
It's something which has crossed my mind before, but I do wonder if it's feasably possible.
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The Sinking Ship: (Un)Love Letters to Merlin
- Thread starter AstroDan
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In all seriousness, how much of a realistic possibility is this?
It's something which has crossed my mind before, but I do wonder if it's feasably possible.
WickerManiac
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A very real one.
The company are owned by shareholders. If the company continues its decline, as evidenced by the FTSE 100 they may vote to remove Varney and subsequently bring in new management or sell assets (such as AT) to re-coup capital.
PeteB
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I feel like we're in a time similar to the late 80's when Broome was bleeding the park dry, which ultimately lead to Pearson's Tussauds acquiring the park.
Bare in mind they were not a huge park operator at the time. They had mostly just Chessington and Madame Tussauds, so we don't necessarily need another highly experienced park operator to take over Towers, just a keen and well funded business who wish to invest in a leisure product and take it to the next level.
WickerManiac
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I notice with Towers that it's stuck in some kind of time loop:
1. Park owners start well, opening ambitious attractions and a real buzz about the place, off the back of previous poor ownership
2. Cuts become apparent, one of their attractions has a major accident, attendance and visitation drops.
3. Old management sell up and new folks come in. Go to step 1.
Rick
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As I posted earlier, they don't own the park. It's not an asset.
WickerManiac
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Correct - it is leased.
They do however own lots of intangible assets (brands, rights to produce, goodwill, etc.) along with their rides estate and buildings (excluding Towers and Gardens).
PeteB
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Would tend to agree but I don't feel like Merlin has really added much in the way of value to the park, not to mention that most of their additons have either been total failures or mediocre successes.
At least Charterhouse and DIC had some reasonable successes.
Matt.GC
TS Member
I certainly agree there are similarities in Alton's predicament to that of 30 years ago, and the events that followed that are certainly the only way out of the current situation too.
But I think it's different now. Towers needs a huge amount of investment, both capital and operational expenditure to get to a level at which it could stand on its own as an individual business. Towers was bought then as part if a wider group, that is unlikely to happen again. Theme Parks where a fledgling market back then, not so now. There's also Brexit looming and all the economic uncertainty that brings with it.
A management buyout wouldn't be able to raise the funds to invest into the park. It's also unlikely a current publicly traded company would either. That really only leaves Saudi Princes or Russian Oligarchs.
Rick
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Charterhouse - fair enough. DIC?! .... between their purchase in April 2005 and the sale to Blackstone in May 2007, DIC did the following:
- Rethemed Driving School by adding a corporate sponsor
- Close Toyland Tours
- ... reopen it as the (much loved ) Charlie and the Chocolate Factory
- Rethemed a pathway as Haunted Hollow
- Opened a new Crazy Golf course
- And we can't forget... created a kid's play area themed around excrement
Indeed - but I think that's a fairly tough proposition to a company's shareholders or to a bank if you are seeking investment. Goodwill, rights to produce and any brand other than that of the park itself are not particularly valuable.
The proposal would essentially be to purchase the lease to operate the park (with essentially no collateral against the loan) and operate it in a way that means that they could only invest by expanding and building on property that they do not own, in way that is more profitable than one of the world's leading operators of attractions that has synergies with a huge number of properties in the UK and further afield.
The comparisons between now and then are all well and good, but as @matthewgcole stated quite rightly, the market is very different. There is a reason why so many regional parks have gone - theme parks are very expensive to operate, with tiny margins and the appetite for them in this country is not what it was once was.
Matt.GC
TS Member
Indeed, what is known as "intangible assets". The Alton Towers grounds themselves are not what would be up for grabs, it's very hard to raise finance against intangle assets as their value is a matter of opinion rather than the cold hard facts of tangible assets (such as the value of real estate).
That's why it's unlikely Alton Towers will be bought. Even if they managed to get the funds together to finance the deal, a Management buyout is highly unlikely as they would certainly struggle to raise the funds needed to invest in the business to make it work. For Another PLC to buy the park, they would have to either raise funds against their existing assets or via a rights issue, both of which would be extremely hard to sell to shareholders.
So basically a private buyer or small consortium of private buyers with extremely deep pockets and a keen interest in the industry is the only realistic option.
That's why it's unlikely Alton Towers will be bought. Even if they managed to get the funds together to finance the deal, a Management buyout is highly unlikely as they would certainly struggle to raise the funds needed to invest in the business to make it work. For Another PLC to buy the park, they would have to either raise funds against their existing assets or via a rights issue, both of which would be extremely hard to sell to shareholders.
So basically a private buyer or small consortium of private buyers with extremely deep pockets and a keen interest in the industry is the only realistic option.
WickerManiac
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All I will say is brace yourselves.
Next week the website will be updated.
The opening times, cuts, ride line-up, are quite horrific.
Hold on. You won't have seen anything quite as bad as the 2018 season. Ever.
Next week the website will be updated.
The opening times, cuts, ride line-up, are quite horrific.
Hold on. You won't have seen anything quite as bad as the 2018 season. Ever.
themeparkfan
TS Member
Is there any more rides they can cut?
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Matt N
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Do you have inside info or something? Now you've said this, I'm hopeful that it will be similar to the 2017 season, but part of me thinks that if it is as bad as you say it's going to be, then I can see a WW3 style situation unfolding, similar to when Blackpool demolished Wild Mouse.
themeparkfan
TS Member
So what can go? I'm worried enterprise maybe gone and maybe blade (why spend all that money on paint )maybe duel will be closed and what about spinball? How exciting just 8 rollercoasters and only 3 kids can go on and then they will be too scared on two of them.
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I thought that and can see this happening
Poopoohead
TS Member
I thought the opening times for 2018 were already on the website, or are they being changed?!
The calendar is there but it doesn’t give you the actual open / close times
Altonadvocate1
TS Member
I'm no Merlin apologist. I've given them plenty of stick on these pages and no doubt will again.
Fact is AT would have folded after The Smiler incident if they were not part of a wider group.
Merlin, like any other company love profit. They have some very clever people working for them and if the kinds of investment that we love to talk about would bring a return, they would have allready done it.
Fact is, a business model with huge investments every year, an enourmous entertainments budget, parades through the grounds every day would not see a return on investment in The Staffordshire countryside. If it did, these things would allready have happened.
It's easy as enthusiasts to want all these expensive things to happen, but I suspect that if we went to University for years, earned a PHD in business, then assumed a decision making position within Merlin we would realise these things are not feasible.
I love a day at AT, it's a fantastic day out. Could it be better still with a massively increased investment budget... Yes... Would it mean that AT would still be there in ,20 years... Probably not.
I do not understand these individuals who want AT or Merlin to have a bad year. This would not make the park better and I am skeptical that new park owners would either.
Perhaps it's time for one of us to go to Uni for a few years to get a PHD and multiple professional qualifications in business, land a job at Merlin to sort out all the issues overnight.
Not as easy as it sounds. Would love someone to prove me wrong though. One of our noisy negativists for Director of Merlin Entertainments in a few years. I wish you sincerely the best of luck, and hope you can put everything right.
Fact is AT would have folded after The Smiler incident if they were not part of a wider group.
Merlin, like any other company love profit. They have some very clever people working for them and if the kinds of investment that we love to talk about would bring a return, they would have allready done it.
Fact is, a business model with huge investments every year, an enourmous entertainments budget, parades through the grounds every day would not see a return on investment in The Staffordshire countryside. If it did, these things would allready have happened.
It's easy as enthusiasts to want all these expensive things to happen, but I suspect that if we went to University for years, earned a PHD in business, then assumed a decision making position within Merlin we would realise these things are not feasible.
I love a day at AT, it's a fantastic day out. Could it be better still with a massively increased investment budget... Yes... Would it mean that AT would still be there in ,20 years... Probably not.
I do not understand these individuals who want AT or Merlin to have a bad year. This would not make the park better and I am skeptical that new park owners would either.
Perhaps it's time for one of us to go to Uni for a few years to get a PHD and multiple professional qualifications in business, land a job at Merlin to sort out all the issues overnight.
Not as easy as it sounds. Would love someone to prove me wrong though. One of our noisy negativists for Director of Merlin Entertainments in a few years. I wish you sincerely the best of luck, and hope you can put everything right.
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MakoMania
TS Member
We're not being unreasonable though, we just want Merlin to deliver to a standard that is comparable to what other large theme parks offer. We're not asking for completely unrealistic things here, it is clearly feasible as countless other parks have shown, including Alton Towers themselves under previous ownership.
I just think that people are getting tired of every year being worse than the one before.
Read this earlier, thought it fit Merlin well:
Writing in the Observer, the Prime Minister said top executives had too often reaped "big bonuses for recklessly putting short-term profit ahead of long-term success".
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