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The movie-inspired rides, Harry Potter-themed lands, and growing collection of hotels that make up Universal Parks & Resorts have been performing well for parent company Comcast Corp. — so well that the cable and entertainment giant wants the segment to keep growing.
Stephen Burke, CEO of NBCUniversal and a senior executive vice president at Comcast, praised the performance of the company’s theme parks at the Bank of America Merrill Lynch 2016 Media, Communications & Entertainment Conference recently. The parent company owns parks in Orlando and Hollywood, bought control of the theme park in Japan last year, and has a lease agreement with Universal Studios Singapore. A Beijing park is due to open in 2020.
“The great thing about the theme park business, particularly the way we approach the theme park business and where we are in our life cycle, it’s sort of an ‘if you build it, they will come’ business,” Burke said. “If we keep investing in Florida, California, Japan, Beijing, and potentially other countries around the world, we can have significant double-digit [operating cash flow] growth for many, many years.”
Last year, operating cash flow for the segment increased to $1.5 billion, a 33.5 percent increase over 2014. Revenue increased more than 27 percent year-over-year to $3.3 billion in 2015.
That’s not what Comcast executives were expecting when the company bought a stake in NBCUniversal in 2009 and then acquired the rest of the company in 2013.
“Theme parks, which was a part of the company that we really didn’t spend much time even thinking about when we bought it, is now one of our favorite parts of NBCUniversal,” Burke said.
He said the parks are the perfect outlet for NBCUniversal’s intellectual property, including Despicable Me, Minions, and the characters in the DreamWorks portfolio, which the company acquired this year.
“It’s so perfectly complementary with the rest of the company,” Burke said. “Of all the businesses in some ways, I think over a 10- or 20-year period, it is the clearest vision we have for how to expand at a very rapid rate for a very long period of time.”
Next up is the Beijing resort, which was announced in 2014. It is set to open in 2020 with a theme park, entertainment complex, and hotel included in the first phase. NBCUniversal will own 30 to 40 percent of the park, Burke said, and “hundreds” of people are at work on the project now with models, drawings, and a planned list of attractions already set. Investment in the project reportedly tops $8 billion.
He said Universal has been told by Beijing officials that it will be the big U.S. theme park there, just like Disney is the big U.S. theme park presence in Shanghai with its new $5.5 billion Shanghai Disney Resort.
“Obviously, it is a tremendously challenging feat,” Burke said. “If you look at what the Walt Disney Company has done in Shanghai, it’s a wonderful accomplishment to build a beautiful park and spend that kind of money and work your way through all the obstacles to getting that park open and then have the park be full of satisfied people.”