Disney and SeaWorld

There has been a lot of speculation over the weekend on the web and on the boards about Disney being interested in SeaWorld. 

So let's look at this a little more.  For this quick and dirty discussion we'll look at it from a strategic business perspective via a good ole' SWOT analysis (Strength, Weakness, Opportunities, Threats).

We'll start with Strengths if Disney were to buy SeaWorld from InBev.

Strengths:

1. Disney doesn't have a water based animal park per say, so this would clearly be a non-conflicting addition.
2. Takes out a competitor in the Orlando market 
3. In theory leaves Disney as the undisputed parks/resort destination in central Florida.
4. Has a strong brand
5. Gives Disney a boutique park without having to build it.

Weaknesses:

1. Not part of Reedy Creek, so comes with additional baggage not seen inside RCID
2. Has no real character development/story to energize with the studios, a Disney must these days outside of Shamu
3. Nowhere close to existing Disney facilities, increased transit times and associated costs to ferry customers.  These could be especially bad in traffic.
4. Adds a 3rd probably unnecessary water park
5. No fire sale (InBev wants MAXIMUM money, not a cheap deal)
6. Significant capital investment to renovate parts of main parks to Disney standards, plus re-training costs for employees, etc.
7. Only Orlando is close to a Disney area, but deal would end up with parks in San Diego and San Antonio. 
8. Might also have to deal with Busch Gardens and other properties outside of SeaWorld franchise, which may not be desirable.
9. Contract already in place for additional expansion in Dubai.  MAJOR cost to either go through with it or even back out of it.

Opportunities:

1. Chance to add significant deal with InBev for promotion and distribution of their products through the Disney parks
2. Ability to add another line of profitable plush and marketing to Consumer Products
3. Potential way to reach additional families, especially the hard to get capture Tween market in both boys and girls.
4. Significant addition to Disney Envionrmentality goals created with Animal Kingdom
5. A stake in other markets for potential DVC or other Disney regional entertainment properties.

Threats:

1. If Blackstone group goes ahead, makes them a much larger force in Orlando.  Other markets may not be as much of an affect (ala Six Flags and Cedar Fair, whom Disney doesn't really see as true competitors)
2. Dubai World group would suddenly be a competitor.
3. Potential other competitor in Candover Group.
4. Some potential customer loss from ticket tie in with Universal if Blackstone wins, but probably minimal.

So if you read all this, frankly unless it's a VERY cheap price, I would expect Disney's strategic plan to be a feint. 

Just like Google in the recent FCC spectrum auction, if you are in this position you never exit the board early.  Instead you stay around to defend you position, even if you have no end intent in acquiring the property.  Your plan is to play the game as a defensive measure protect your turf. 

Here that might be a number of things from trying to affect the packaging of the deal, to bidding to keep the price from being too cheap and creating a false economy of scale for the new buyer.  Some of that you have some measure of control over, other parts you don't.  But if you leave early, you'll never know.

Plus, if you are Disney you probably would prefer that it go to someone else OTHER than Blackstone, but even that's not a deal breaker I think.  The 3 park setup hasn't particularly hurt any of them.  The inevitable tie-in with Universal might pose a slight issue, unless you can influence the price and the terms to be very onerous to the buyer, just as Disney most likely tried to do with Harry Potter a little. 

Would they have done a Harry Potter deal?  For the right price, I'm sure.  But if JK Rowling is truly as hard to work with as the web leaked and the price was as high as it was, then you play the game to make sure the other guy doesn't get TOO good a deal. 

I don't think Disney has much to loose here though, even if Blackstone does end up with it.  At best it's addative to what they have already, so it's certainly not going to sink Disney World overnight and only in Florida.  It would take several years to shift the balance more away from Disney.

So that's my bet for Disney and SeaWorld.  At first blush it sounds cool, but when you look at it, it really only affects Florida . . .  and comes with a lot of expensive baggage to boot. 

If you have other thoughts to add to the SWOT above, drop me a line.