Funworld January 2010

SeaWorld Parks & Entertainment, formerly Busch Entertainment Corporation, traces its roots back 50 years to a little animal conservatory on a vacant lot next to former parent company Anheuser-Busch’s brewery in Tampa, Florida—a pet project, so to speak, of August Busch Jr.

“Pretty soon we had a brewery tour that got out of hand and became a theme park,” jokes Jim Atchison, president of SeaWorld Parks & Entertainment.

Over the past half century, that theme park, in turn, grew into an entertainment empire, with 10 parks across the United States that draw approximately 25 million annual visitors, including three SeaWorld parks and two Busch Gardens locations. So when an operation of that size goes up for sale, the ramifications ripple throughout the industry.

Belgian beer company InBev purchased Anheuser-Busch in November 2008, and the new owners made it clear theme parks were not their business and wanted to let BEC go. On Oct. 7, 2009, A-B InBev announced an agreement to sell the chain to New York investment firm The Blackstone Group in a deal worth up to $2.7 billion; the deal was finalized on Dec. 1, 2009, and Busch Entertainment Corporation on the same day officially changed its name to SeaWorld Parks & Entertainment. The company was purchased outright, and now joins Blackstone’s deep roster of attractions industry interests, including Merlin Entertainments Group and Universal Orlando.

Soon after the initial deal was announced, FUNWORLD spoke with SeaWorld’s Atchison to ask him about what it was like to live in corporate limbo for more than a year, and how the Blackstone purchase will affect the theme park giant going forward.

Editor’s note: This interview took place prior to Busch Entertainment Corporation’s name change to SeaWorld Parks & Entertainment. The name has been changed in the text for accuracy.

How does it feel to finally have this sale over with?
This is something we’ve been working on for quite a long time, but when we got to the announcement it was a big day. Blackstone is without question the owner and partner we would have handpicked. Fortunately we were able to end up in that boat. They have deep insights into the industry, and therefore we thought they would be the best stewards to leverage these great Busch brands with their strategy and vision, and take it to the next level. We couldn’t have been happier.

How long have you been working on the sale?
When the transaction was closing for the sale of Anheuser- Busch to InBev, I was able to meet with some of the new leadership, and we talked through the potential divestiture of BEC and got to work on it. We’ve been working on this for about a year, and Blackstone were the people I had circled as the best fit for us. It’s been a long haul, particularly when you consider the beginning of the economic crisis was with a banking collapse. It speaks to the financial acumen of Blackstone to be able to put together a deal like this.

What was it like for you and your team to operate your theme parks for that long knowing this was all up in the air?
I suspect it was easier for us than in some other organizations. I’m biased, but the team at SeaWorld Parks & Entertainment is a seasoned, veteran group. You’re talking about people who know the brands well, know the parks well, and have been through challenging times. If we didn’t have such a strong team, it would have been a more challenging task.

At the end of the day, we focused on the things that make any business in this industry successful: the guest experience, the morale of our employees, and the overall quality, safety, and cleanliness of our parks. We stuck to what we do best.

What made SeaWorld Parks appealing to Blackstone?
This is always [tricky] for me to be speaking on behalf of another company, but what Blackstone has shared with us and publicly is they never thought these parks would be for sale. I’m not sure many people 24 months ago would have said Anheuser-Busch would go away as we know it.

We are the second-largest player in the industry in the United States by revenue, with 25 million visitors a year. We’re a big part of the industry, and from Blackstone’s standpoint, they’ve communicated that they saw well-established brands with a homegrown I.D., and with a veteran management team who knew the business like the backs of their hands. From Blackstone’s standpoint, it was an opportunity to pick up what I think is one of the jewels in the industry. It was something that if you don’t go after it this time, it may never come along again.

What is Blackstone’s philosophy regarding SeaWorld Parks?
From Blackstone’s standpoint, they are looking to make sure we continue the things that have made us successful, and they want to add to that. They have a vision of investing more in the business; they have a vision of growing the business through new attractions; [our] interests are very much aligned. They want to continue the momentum we’ve had and add a lot of great strategic vision and thought and insight to help us leverage it.

What do you gain from the deal?
One of the biggest advantages we get from Blackstone is they have a wealth of knowledge and background with others in the industry, and other related industries. They’re going to bring an awful lot to the table. Previously, our access to people whom we could share the nuances of our business with and get counsel when we were looking for outside input was limited to the best beer minds in the world. At the end of the day, we got some great new access that we previously never had.

Will your business model have to change at all and adapt to Blackstone?
Blackstone purchased 100 percent of the stock of BEC. Even within Anheuser-Busch, BEC was largely a standalone operation. We didn’t have a lot of overlapping or embedded functions within A-B—just some of the back-of-house stuff. But for the most part we’ve been relatively independent, and Blackstone has communicated the desire to maintain that. So from a business model standpoint, it’s our same 10 parks doing what we’ve been doing, operating as we’ve been.

Ironically, we moved our headquarters to Orlando long before the rumor of InBev purchasing Anheuser-Busch came up. I moved into the job of president of the company in 2007, and I asked to move the headquarters from St. Louis to Orlando, and we did. In hindsight, that ended up being very fortunate because we were out of St. Louis when InBev showed up.

At the end of the day, Blackstone wants us to maintain the model we have. They want to offer great opinions, strategies, and resources to help us grow.

How will the Busch brand and legacy interact with SeaWorld Parks as you move ahead?
I’m very proud of my many years of service with Anheuser- Busch. Much of the DNA we have in SeaWorld Parks I would credit to Anheuser-Busch—certainly our focus on quality, our discipline about execution, our long-term vision and focus, how we treat our employees. These are all lessons we’ll take with us moving forward.

We also still have a formal relationship with Anheuser- Busch. We will have the “Busch Gardens” names at our two parks; there’s a lot of equity in those names, and I wouldn’t be quick to walk away from them. We will continue to have the “Here’s to the Heroes” military admission to our parks, and that will be sponsored by Anheuser-Busch. We will always have a strong relationship with Anheuser-Busch, but it obviously will transform into a different one as we move forward. But we’re leaving as friends and colleagues.

Will your guests notice anything significantly different about the parks under Blackstone?
No. Our goal is to make sure the guest experience that has made us successful—an emphasis on quality, safety, the overall guest environment, and creating unique experiences—we want to make sure the guests still see that. There’s nothing about this transaction that would change that whatsoever. A lot of changes we have are back-of-house things. We have to establish a tax-and-treasury group, an audit group, a legal team…the guest isn’t aware of those things. Hopefully we’ll only see our parks getting better every day and every year as we continue to invest under Blackstone.

Will your philosophy regarding attraction investment change at all?
We’ve had great discipline in how we invest in our parks. We do our homework and are methodical in our research. We are obsessed with having attractions that aren’t doubles or triples, but home runs. We put a lot of thought, effort, and planning into everything we do; sometimes that takes a bit more time, but the guest sees [the difference] at the end of the day.

“Manta” is a good example—that wasn’t just dropped into the middle of SeaWorld Orlando; there are a lot of nuances about that attraction that make it different. We will continue to focus on those nuances and have the same methodical, dedicated approach to how we invest in the parks. Blackstone will clearly aid that; they have great vision and a knack for strategy.

We’ve made big investments in our parks over the past several years, and we will continue to make big investments. We’re already working with Blackstone on this moving forward. You will see big attractions coming out of our parks in the coming months and years. It will be very much on the scale of things we’ve done before, if not more.

How does having Blackstone as your owner position SeaWorld Parks for the future?
It makes for a very bright future. As big as we are in the industry, we were only 10 percent of Anheuser-Busch’s earnings and 4 percent of Anheuser-Busch InBev’s earnings. So we clearly had a parent company that was knee-deep in another industry altogether.

With Blackstone, we see an opportunity to grow our business organically through what we do currently and their willingness to expand the business and look at other opportunities to grow. We’re a bit unshackled now, I guess, and it’s an exciting time for us. We have butterflies, but it’s not about being nervous, it’s about being excited that something big is happening. That’s a great feeling, and if you can have that every day you show up at work, you have a great job. I feel that, and I think our team does, too.

Contact Senior Editor Jeremy Schoolfield at jschoolfield@IAAPA.org.