What if Merlin sold off Alton Towers?

Would Alton Towers be better off on its own?

  • Yes

    Votes: 47 61.8%
  • No

    Votes: 29 38.2%

  • Total voters
    76

QTXAdsy

TS Member
Favourite Ride
Black Hole
The other night there, me and my non theme park friend were having a typical pub chat about the operations about the running of the Merlin parks and the various problems with them such as having a monopoly of the UK theme park scene and about the rather 'questionable' choices they've done over the last few years and even my friend saying how appalled he was of the running of the system and stating that the people who operate Merlin have all the business skills of Del Boy Trotter, TBF, that wasn't far off how I see them.

Of course, me and my friend love all these 'what if' scenarios and I believe that many of us on here have had our own many times, so then we came up with one such scenario, what if Alton Towers broke away from Merlin ownership or was sold off at quite a pretty penny, knowing Merlin, if they can sell off Alton for a quite a large sum of money, you can bet they'll do anything for £££.

I have mentioned this a few times on the forum, but the idea is quite an interesting one that has it plus and minus. Having an ownership that is based right at the park and not a hundred miles away, plus giving a bit of competition for Merlin and the new Paramount Park does make things look more interesting. That said, if Alton was running by itself, would it have enough money to keep up with the costs of running it year after year? Never mind installing new attractions.

So what do you think, would Alton be better off being on it's own?
 

haydn!

TS Member
Would Alton Towers be better off part of another group, possibly debatable, but would Alton Towers be better off alone? Quite possibly not.

Alton Towers (and most Merlin theme parks) invest considerably more money than they make each season. That's only possible because they have a larger parent to provide the financial support/stability needed to get that kind of cash. There is no-way you'd be seeing £30-40million being spent over 3-4 years like we do now.
 

CGM

TS Member
Big changes would have to be made to the way the park operates. Without the security of a parent company, investments would have to become more cautious and large coasters would probably be much more infrequent. It's also unlikely that the park would be able to afford the huge promotional campaigns that Merlin currently undertake (and as we know, even these aren't always successful).

With that said, I don't think this would undoubtedly mean entering a new dark age of dwindling success. Many people seem to laugh off the idea of Alton going at it alone, implying that without Merlin's investment it would suddenly drop to the level of Drayton Manor and Flamingo Land. However, I don't think that's necessarily the case for a few reasons:

1) The site - Alton is an amazing place for a theme park to be built. Set in the sprawling grounds of a spectacular ruined stately home and containing beautiful landscaped gardens full of curiosities, there are few theme parks worldwide that can boast such stunning surroundings. If you tried to build a theme park today under similar circumstances, it simply wouldn't be allowed. I think people underestimate how much of a factor the site is in the park's continued popularity. It's also worth remembering that the house and gardens had been a tourist attraction in one form or another for around a century before the park came along.

2) The location - It's a well known fact that Alton was chosen to be Tussaud's new flagship park because it was within easy reach of such a high proportion of the UK population. This hasn't changed and for Northern visitors in particular, it's the only large theme park that can realistically be visited in a day without the expense of having to stay overnight. I doubt that customers would stop visiting Alton for a day out just because the park changed hands.

3) It's Alton Towers! - There is no theme park in the UK with as much brand recognition as Alton. It built itself a reputation in the 80s and 90s for being the UK's premier theme park and this has remained to this day. Any new owners would also inherit well known sub-brands such as Nemesis, Oblivion, Air, Rita, Thirteen, The Smiler etc.

A period of low investment, new ownership and fresh ideas could be hugely beneficial to the park. It might mean that the park focuses more on improving the quality of the overall product rather than ploughing all of its resources into the next big addition whilst everything else falls apart. Building on the park's reputation this way may be a better long term solution than having to sustain public interest through constant big investments and marketing hype.

I think as enthusiasts, we often forget that the scale of investment is by no means an absolute indicator of quality when it comes to theme parks. In fact if you look at some of Europe's most successful independent parks such as Efteling and Phantasialand, they historically haven't added major rides all that frequently. When they do add something, it's usually well though out, fits perfectly with the park's look and feel and continues to attract custom for many years. I wouldn't have any issues with Alton adopting this investment model.

So yes, I do think that with the right management, Alton could survive by itself. In the long term, once the inevitably messy restructuring is in the past, it could even thrive. Unfortunately, I think that if Merlin did sell the park, the odds of finding the right buyer would be low.
 
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Poisson

TS Member
Favourite Ride
The Giant Squid
The owners need to be multiple silent investees with good relations to the 'owner' as such, and willing to spend to earn and cut prices to increase figures
 

Martin

TS Member
Imagine a world without Merlin
images


In all serious though, it's not really just Merlin that's the problem, it's the shady venture capitalist lizards pulling their strings and the sale. It depends who the buyer would be. If they got more owners like Blackstone then it'd just stay the same, if not get worse, but if the new owners weren't quite so cynically profit driven and were willing to invest more, then things would be better.
 

QTXAdsy

TS Member
Favourite Ride
Black Hole
TBH honest, if there will be a new owner for Alton, I'd would prefer it being more local based that owns Alton alone, rather than a large company like Merlin who own a chain of parks.

Though I do wonder what Alton's value really is right now, how much would it go for?
 

smudge

TS Member
Favourite Ride
Nemesis
Good question, I guess no one on here knows for sure. I'd guess at £600-700m.

*starts justgiving page*
 

CGM

TS Member
One thing that's worth considering is that Merlin don't actually own the park. One of the first things they did after they bought it was sell it to an investment firm and then lease it back. It's an accountancy trick that can have huge short term benefits but often has detrimental effects long term because of course, they don't actually own the property. Also, the new owners basically hold all the cards when it comes to negotiating a new lease.

I think Merlin currently has a lease that runs until 2042. If they sold the park, they'd be selling this. They initially paid over a billion pounds for the park itself. You'd think that the lease would be a bit less dear. Having said that, Merlin would obviously push up the price as much as they can get away with.

I can only see Merlin selling the park if the company suddenly loses interest in theme parks or if Alton hits serious financial trouble.
 

Ketz

TS Member
Merlin brought the whole Tussauds group for £1 billion, which is a very good deal.

I don't think towers would be able to invest as much as they have had in recent times if they weren't run by Merlin. That doesn't necessarily mean it would be worst off.

Unfortunately i think Merlin or a company with the same ethos will always run the park, no one will grab it and make it into a true world class destination. The only way I see Alton changing hands is if it is purchased by someone new who fancy a crack, somebody like Comcast for Universal. But alas it's not gunna happen.

Also isn't Merlin effectively owned by The Blackstone Group, who seem to have a history of running under achieving themeparks, Universal before Comcast, and Busch Gardens Seaworld now, both of which are having cuts much like ours here in the UK
 
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Alex23

TS Member
Seems like they have sold quite a lot of them already, this article is from Cityam

"Deutsche Bank has been left with a seven per cent stake in London Eye and Madame Tussauds owner Merlin Entertainments, after it offloaded a chunk of the company's stock earlier this week.

Shares in Merlin plummeted fro 425p to 419p after the bank issued a statement saying its holding had crossed a seven per cent threshold.

On Tuesday, Deutsche launched the sale of 156m shares in Merlin on behalf of buyout firms CVC and Blackstone.

The shares, which represented 15.4 per cent of the company, were placed at 417p, a 2.2 per cent discount to the company's closing price on Monday night.

Late on Monday, sources told City A.M. that the bank was struggling to place the block trade. It is understood today's announcement by Deutsche represents an aggregate position.

CVC and Blackstone floated Merlin in November 2013 for £3.4bn and has since been selling down its stake in the group.

Deutsche Bank declined to comment."
 

Dar

TS Member
Favourite Ride
Taron
Maybe that's their plan? Run it into the ground so it's essentially worthless, then buy the park back from Mr. Leslau et al at a rock bottom price!
 

jon81uk

TS Member
I am taking from my own post on the Cuts thread, but here is another question...
What if Tussaud's has never bought the park 25 years ago?


I think the park would be very different, Tussauds Studios really developed the theming (Katanga Canyon, Gloomy Wood, Forbidden Valley, Ug Land, X Sector) and of course John Wardley came up from Chessington and developed most of the decent 90s additions (Mine Train, Haunted House, Nemesis). Merlin then added in their expertise in making themed walkthrough attractions (Dungeons, sea life) and this led to Mutiny Bay, Sub Terra and other heavily themed stuff in the 2010s.
 
Surely, based on the fact that it's owned by Leslau, the value of Alton Towers is low anyway since Merlin don't own much more than the brand and the fixtures and fittings?

I am very much of the opinion that there is far too much of a monopoly on the UK theme park industry and can't actually think of a single country in the world which operates in this manner. Merlin will happily continue to plod along in their current manner until Paramount London becomes the massive success which I seriously hope it will be. This could mean big changes in Merlin but they'll hang on to Alton Towers. What I thinkw ould be far more interesting would be if one of either Thorpe Park or Chessington were to be sold off. That way, the local neighbour which was still part of Merlin would really have to buck its ideas up as it would finally have that bit of much needed local competition.
 

EuroSatch

TS Member
Leslau own the land that Alton Towers is built on. They don't own the park. It's the same as if your house is leasehold or freehold. All the rides and buildings (ie assets) built on it are owned by Merlin.

Blackstone are a private equity firm who own shares as if a private individual, not a controlling party. They provided the finance to help Merlin but out the portfolio.

I imagine it would be fairly cheap to buy the park, but would involve acquiring all the debt and goodwill of the balance sheet, so it would not be a preferable deal unless backed with investment to assist the purchase.

I hope Merlin do consider selling the park. It needs to be recognised for more than just a money spinner, and I don't imagine Merlin are getting the return they hoped for, hence the blind cuts without consideration for how it impacts on the brand
 

Ketz

TS Member
Surely, based on the fact that it's owned by Leslau, the value of Alton Towers is low anyway since Merlin don't own much more than the brand and the fixtures and fittings?

I am very much of the opinion that there is far too much of a monopoly on the UK theme park industry and can't actually think of a single country in the world which operates in this manner. Merlin will happily continue to plod along in their current manner until Paramount London becomes the massive success which I seriously hope it will be. This could mean big changes in Merlin but they'll hang on to Alton Towers. What I thinkw ould be far more interesting would be if one of either Thorpe Park or Chessington were to be sold off. That way, the local neighbour which was still part of Merlin would really have to buck its ideas up as it would finally have that bit of much needed local competition.

If you think about it, around the world you find clusters of parks, together drawing in crowds. Orlando is the main example, 9 parks in a very small area, plus many more smaller amusements. It's a common phenomenon, with restaurants employing that tactic for years. So you may find both parks actually increase in attendance with the extra theme park tourists in that area. Alton is a little too far to benefit, but with the amount of large cites close to Alton they shouldn't get too effected.
 

jon81uk

TS Member
I guess the USA has some monopolies on theme parks but there are also a lot more small parks too.
Disney operate six parks in US.
Six Flags has several parks.
Busch-Seaworld has five(?).
Universal three parks.
Merlin have two legolands.
And I think there are a few other groups that run more than one park in the US.
In the UK Merlin runs four parks including Legoland. As far as I know all other parks are sole operating? BPB used to own a few (Southport) but I know they got rid of them.
 
That's kind of the point I'm making though. The USA has various large groups running parks. Obviously Disney are the biggest but other large companies such as Six Flgas, Universal, Seaworld etc can compete and stand up on their own two feet. In the UK, Merlin do have a monopoly. All four of the major UK parks are run by Merlin and I dare say that they would want to get their hands on Paultons and BPB if they could too. The smaller independant run parks around the UK really struggle to compete and know full well that they could never hope to be as major players as the Merlin parks are. This, to me, seems unfair. In the USA there is far more diversity and it keeps all operators on their toes becasue they try to out-do the competition. Merlin know full well that other UK parks aren't a massive threat to them.
 

Ketz

TS Member
You really can't compare America cus of its size, there are areas in America much like the UK that only has one themepark company and no competition.
 
True but I still think that Merlin's heavy dominance of the UK market is more extreme than in most other countries around the world. I also find it very interesting that the vast majority of Disneyland Paris' international visitors are from the UK despite the fact that Germany is within easy driving distance. I can't help thinking that perhaps this is because Germany has a far more diverse and better quality offering of theme parks than we do here in the UK so people are less tempted to go elsewhere than people in the UK. Here our mainstream theme park market is pretty much dominated entirely by Merlin who offer a far less appealing and worse quality theme park offering than the German parks, or parks in many other countries for that matter. Personally I put this down to lack of competition. Marlin don't need to wow people in order to stand up to their competitors particularly since their only real competitors are Paultons, Drayton and maybe Blackpool, none of which are anywhere near as significant or well known as the Merlin parks.
 
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