Busch Entertainment Corporation - Company Profile, Information, Business Description, History, Background Information on Busch Entertainment Corporation



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History of Busch Entertainment Corporation

Busch Entertainment Corporation is the entertainment subsidiary of Anheuser Busch Companies, Inc., operating nine theme parks in the United States and maintaining an equity position in an amusement facility located overseas. Busch Entertainment ranks as the third largest theme park operator in the United States. The company owns Busch Gardens in Tampa, Florida, an African-theme park, and Busch Gardens in Williamsburg, Virginia, which replicates 17th-century European villages. The company owns SeaWorld parks in San Diego, California; Orlando, Florida; and San Antonio, Texas. Other properties include water park attractions in Tampa, Williamsburg, and Langhorne, Pennsylvania, where Adventure Island, Water Country USA, and Sesame Place are located, respectively. Busch Entertainment also operates Discovery Cove, a reservations-only attraction in Orlando that offers guests the opportunity to interact with marine animals. Through a Spanish affiliate, Busch Entertainment owns 13.3 percent of Port Aventura, S.A., which operates a theme park near Barcelona, Spain.

Origins

When Eberhard Anheuser, with the help of his son-in-law, Adolphus Busch, began brewing beer in 1852, the sole focus of the company was beer. A century later, after holding sway as the "King of Beers" for decades, the company could entertain other business interests. Busch Entertainment became one of those extracurricular interests, a subsidiary devoted to managing the brewer's diversification into the amusement park business. The move into what became the entertainment facet of Anheuser Busch Companies, Inc. was made by August "Gussie" Busch, Jr., and from the start one of the primary objectives of running an amusement park was to use it to promote the brewer's brands of beer.

Eberhard Anheuser passed day-to-day control of the company to Adolphus Busch in the 1870s, marking the start of a Busch family dynasty that continued into the 21st century. Adolphus Busch died in 1913, leading to the appointment of his son, August A. Busch, as the leader of the nation's largest brewing concern. Adolphus Busch III was next in line, guiding the company until shortly after the end of World War II, when August A. Busch's son, August A. "Gussie" Busch, Jr., was named president, inheriting a company renowned for its aggressive and effective advertising. August Busch, Jr., embraced the legacy handed to him and threw himself into promoting the company's brands, restoring the preeminence of Anheuser-Busch, Inc., as it was then known, after the company briefly relinquished its lead in the industry following World War II. One of the ways August Busch, Jr., sought to promote the company's beer labels was by opening an entertainment park. In 1959, 20 years before Busch Entertainment was formed, August Busch, Jr., opened a complex in Tampa named Busch Gardens. It was "Gussie Busch's idea of combining a bird garden and beer garden," August Busch, Jr.'s great-granddaughter said in an April 25, 1994 interview with Amusement Business.

The original vision of August Busch, Jr.'s entertainment attraction changed markedly over the years. The theme-park arm of Anheuser Busch would be neither a bird garden nor a beer garden, but the tie-in of operating amusement parks with the promotion of the company's beer brands did exist from 1959 forward. The Tampa Busch Gardens was expanded in 1962, one year before the company broke ground on a second Busch Gardens in Los Angeles. More pertinent to Busch Entertainment's future was the opening of a Busch Gardens in Williamsburg in 1975. The Los Angeles Busch Gardens did not last, but it was historically significant because it reflected the company's commitment to developing further its theme-park branch. The Williamsburg Busch Gardens, as the concept of the company's theme-park business evolved, offered a different attraction than the Tampa Busch Gardens. In Tampa, guests were treated to an African-themed park that contained one of the largest collections of wildlife under private ownership. Williamsburg offered an interpretation of 17th-century Europe, featuring representations of village-life in Germany, France, England, and Scotland.

As Anheuser Busch's theme-park business matured, it grew through internal development and through external means, blossoming into a chain of facilities that were either established by the company or acquired from other operators. Before further development of the theme-park business continued, the existing assets were organized into a distinct entity. In 1979, 20 years after "Gussie" Busch opened Anheuser Busch's first park, Busch Entertainment Corporation was formed as a subsidiary, giving the former division the corporate structure to accommodate its growth. Expansion resumed the following year, adding considerably to the managerial duties of the new subsidiary. In 1980, the same year Italy was added to the roster of cultures on display in Williamsburg, two new parks were added to Anheuser Busch's entertainment subsidiary, both developed by the company. In June, Adventure Island Water Park was opened, a 36-acre attraction featuring water-play areas that was situated next to the 335-acre Tampa Busch Gardens. The following month, the company unveiled Sesame Place in Langhorne, Pennsylvania, a family-oriented park jointly developed with The Children's Television Workshop, the creator of the seminal television show Sesame Street.



SeaWorld Acquisition: 1989

Busch Entertainment entered the 1980s organized as a distinct entity under the Anheuser Busch corporate umbrella. The company had four parks under its control when the decade began, a total that would more than double by the end of the 1980s when Busch Entertainment's management set its sights on a company created by four graduates of the University of California Los Angeles (UCLA). During the early 1960s, the group of graduates discussed building an underwater restaurant, an idea that was not technically feasible, but one that led to the founding of Mission Bay Research Foundation in 1963 and the development of a concept capable of becoming a reality. Backed by an initial investment of $1.5 million, the UCLA graduates built a marine zoological park on 22 acres along the shore of San Diego's Mission Bay. In 1964, the park, staffed with 45 employees and featuring a Japanese village, a Lagoon Stadium, and a number of dolphins, seal lions, and two seawater aquariums, opened to the public, marking the debut of SeaWorld.

SeaWorld was a success from the start. During its first year, the park, operating as a private partnership, drew more than 400,000 visitors. In 1965, the first killer whale was brought before audiences, the first of numerous attractions added to the popular marine zoological park. In 1968, SeaWorld offered its stock to the public in a bid to raise capital for expansion, leading to the establishment of the second SeaWorld in Aurora, Ohio, in 1970. A third SeaWorld, located in Orlando, Florida, followed, debuting in 1973. SeaWorld proved to be a replicable concept, capable of thriving in markets as dissimilar as San Diego and suburban Cleveland. Harcourt Brace Jovanovich, Inc., a publishing and insurance firm, seized the opportunity to acquire SeaWorld in 1976. Under Harcourt Brace's ownership, SeaWorld in 1988 opened the world's largest marine theme park, a SeaWorld located in San Antonio. The 250-acre, $170 million park took three years to plan and build, and it would be the last SeaWorld project overseen by Harcourt Brace. Saddled with debt, the company was forced to sell its four SeaWorld parks and another park, Cypress Gardens in Winter Haven, Florida.

A bidding war for Harcourt Brace's park assets began in 1989. Among the interested suitors were MCA, Inc. and Walt Disney Co., but Busch Entertainment came away with the prize, paying $1.1 billion for the four SeaWorld parks, Cypress Gardens, and Orlando-based Boardwalk and Baseball, a combined amusement park and baseball stadium that later was closed. The acquisition added more than $500 million in revenue to Busch Entertainment's annual total and gave the company a powerful new vehicle to promote its other parks and its parent company's beer. A little more than a year after the acquisition was completed, the company announced plans to invest tens of millions of dollars in a new master plan for the San Diego SeaWorld that included horse stables for Anheuser Busch's iconic Clydesdale horses and a new Anheuser Busch Hospitality Center, complete with a beer garden and an exhibit area about the history of Anheuser Busch, patterned after similar centers in the company's other parks.

Busch Entertainment entered the 1990s facing increased competition from its rivals. Six Flags, Inc., Universal Parks & Resorts, and Walt Disney Parks & Resorts, the largest players in the industry, represented formidable foes, forcing Busch Entertainment to expand and to consistently revamp its attractions, shows, and rides. The company also faced competition from family entertainment centers and Las Vegas attractions, among others. "The industry is changing," a Busch Entertainment executive observed in an April 25, 1994 interview with Amusement Business. "There are more smaller entities in the picture." The company kept pace by continuing to expand, acquiring Water Country USA, its 10th park, in 1992. A 450-acre complex located near the Williamsburg Busch Gardens, Water Country USA featured more than 30 water attractions. The addition of Water Country USA and record attendance at the Tampa Busch Gardens enabled the company to draw more than 19 million people to all its parks in 1993, an all-time high.

Busch Entertainment in the 2000s

Busch Entertainment was able to register record growth during the recessive early 1990s, but when the next economic downturn loomed the company did not rest on its laurels. The beginning of the 21st century brought economic conditions that did not encourage leisure travel, prompting Busch Entertainment to implement marketing strategies to promote visits to its parks. The company began its new marketing program in 2000 with the introduction of Florida Fun Cards as a way to boost its rolls of season pass holders. Florida residents, who constituted the bulk of the company's season pass holders, were offered the opportunity to obtain a seven-month pass for the price of a single admission. The promotion proved to be highly successful, flooding the parks in Florida with visitors and leading the company to introduce a marketing program for all its parks. Busch Entertainment began issuing Passport cards in 2001, a program with Bronze, Silver, Gold, and, in some areas, Platinum tiers that offered an ascending level of rewards, such as early entry or line-jumping privileges. The company's tiered loyalty program dramatically increased the number of season pass holders and gave the company a vast database of names, addresses, and telephone numbers to aid in its marketing efforts. "That Passport card gets in people's pockets and some will come back and some won't," the editor of a trade publication explained in a September 2, 2002 interview with Amusement Business. "Busch looks to see who uses it and hits them up next year by saying for $20 more you can get free parking and discounts on food and beverages. The next year they'll work their way up and pitch Platinum."

The introduction of Busch Entertainment's tiered loyalty program and its success occurred at a welcomed time. The influence of the economic downturn was exacerbated by reverberations from the terrorist attacks of September 11, 2001, which dealt another debilitating blow to amusement park owners because of anxieties about flying. By relying on Passport to boost season pass rolls and by targeting marketing in areas within a 500- to 600-mile radius from its parks, Busch Entertainment prospered during difficult times. Aside from adopting a new, more focused marketing stance, the company also made several other important moves during the first years of the decade. The Aurora SeaWorld was sold to Six Flags in early 2001, replaced by another property, Discovery Cove. Located in Orlando, Discovery Cove was unique in that it was a reservations-only park. Situated adjacent to the Orlando SeaWorld, the park offered its guests the opportunity to interact with marine life, featuring swims with dolphins, explorations of an aviary, and snorkeling along a coral reef.

As Busch Entertainment prepared for its future, the company was supported by nine, well-established theme parks. The properties generated record earnings in 2004, the 45th anniversary of Anheuser Busch's entry into the amusement park industry. The profits generated by Busch Entertainment provided its parent company with $173 million in operating profits, not a major reward for a company that netted $2.2 billion in 2004, but the value of the amusement parks as a promotional tool added an intangible worth to the contributions of Busch Entertainment. Its relationship with its parent company aside, the company ranked as the third largest theme park operator in the United States, an impressive industry standing that the company likely would not easily surrender in the years ahead.

Principal Subsidiaries: Busch Entertainment Company International, Inc.; SeaWorld, Inc.; SeaWorld of Florida, Inc.; SeaWorld of Texas, Inc.; Port Aventura, S.A. (13.3%).

Principal Competitors: Six Flags, Inc.; Universal Parks & Resorts; Walt Disney Parks & Resorts.

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