Posted Wednesday, October 21, 2009 11:35 AM | Contributed by Jeff
Universal Orlando, co-owned by NBC Universal and the Blackstone Group, said in a regulatory filing on Tuesday that Steven Spielberg had agreed to delay a buyout option in his consulting contract until 2017. What Universal had to give him to agree to the extension is unclear.
Read more from The New York Times.
I still don't understand this contract. The podcast guys discussed this a few weeks ago and I agree that it made sense when the Florida park was in development and opening since they had a few Spielberg films they wanted to bring into the parks. I just don't see how it continued to be relevant into the 90s and now.
Though, we don't really know what this whole "consulting" thing meant for Spielberg in the first place. What experience in theme parks does he have that he could really have brought to the table in the deal?
Well, seeing as Jaws, ET and Shrek are prevalent in the parks I am guessing Universal wasn't ready to shut down those attractions.
I'm just glad they skipped the "Schindler's List" and "Saving Private Ryan" rides.
But does ending his consulting contract nuke the licensing for the existing attractions, Wahoo?
From what I understand that Spielberg can ask for a buy out that would be in the $250Million range, so Universal rather extends his contract instead
Yes, we've all read the articles.
Doesn't look like they extended the contract itself at all because it doesn't appear from what I have seen to have an expiration date. However, Spielberg had the right in June 2010 to put his rights under the contract back to Universal so that rather than getting annual payments (reportedly in the tens of millions per year), he would get a lump sum which appears to be worth several hundred million dollars. Doesn't seem like its likely he would exercise that option in the near future because of the new planned Universal parks and Harry Potter attraction in Orlando which will presumably increase he annual payouts under the agreement going forward though they may not be included in the formula for calculating the put/buyout price for some period of time. Universal couldn't take that risk because it needs to refinance $1 billion of debt before it matures in April 2010 and the lenders would impose costs (higher interest rates, higher fees, more restrictive covenants, etc.) if Spielberg continued to have the right to put his rights during the term of the refinanced debt. By getting Spielberg to agree that he will not exercise his right until 2017 (presumably with compensation to Spielberg for agreeing to defer), Universal has effectively kicked the can down the road a few years on the issue.
You must be logged in to post