An article I randomly found about Merlin by some people called MediaTainment Finance
Mostly basic stuff, but it has some data on visitor numbers, revenue, and future plans for Australia and possibly South Korea.
(sorry about the text being a bit squiffy, I had to try and alter it to put it on CF and might be better viewed direct - link is at the bottom)
THE CREATIVE CORPORATE
PROFILE
Merlin Entertainments Group, UK/Global
The UK-originated Merlin Entertainments
Group is a family-entertainment company in the out-of-home attractions business. The group,
which specialises in location-based, branded entertainment, received more than 41 million
visitors last year at its 77 attractions worldwide. It is second only to the Walt Disney Co, which
boasts the more formidable 120 million-plus visitors globally but the Disneyland parks have
been around since the 1950s. Merlin only launched in 1999.
Merlin’s attractions, which include theme parks and resorts, are ventures that it owns or manages on behalf of third parties. Its other properties are amusement parks, aquariums, waxworks
museums, horror-themed dungeons and the London Eye, the iconic observation wheel,
among others.
It is already the leading European company in the sector and it has embarked on an extensive growth strategy that includes North American and Asia-Pacific in the next two years.
The brainchild of CEO Nick Varney, Merlin’s launch was followed shortly by the opening of its
first Sea Life-branded aquarium and a couple of ‘dungeon’ museums.
Its expansion rate has been recession-proof and rapid, with the company reporting growth after the 2008 economic downturn. It aims to achieve its formidable global goals by building and rolling out its brands in short periods of time as cost efficiently as possible.
Its existing international brands are led by the Legoland theme parks, the Madame Tussauds waxworks and the Sea Life Centre aquariums.
Today, it is a quiet but major force in the creativity sector, using the best in waxwork sculpture, edutainment (the melding of entertainment and education) via its aquariums, roller-coaster
design and manufacturing, 3D and 4D movies and theatres, and architecture for the hotels at
its theme-park resorts. Its parks are used as venues for concerts by some of today’s highprofile pop stars. Although it eventually wants to be listed on the stock exchange, Merlin’s current accomplishments have relied on private equity.
Private equity thrills
With an estimated valuation of US$2.5bn-plus, Merlin is jointly owned by private-equity firms.
They are the US-headquartered Blackstone Group, which bought the company in 2005 and
now has 34%; UK-based CVC Capital Partners (28%); and Kirkbi A/S, the privately held familyowned investment company that owns Lego Group, the Danish maker of the world-famous
construction-toy bricks. It holds 36%. In addition, Merlin CEO Nick Varney and various employees have shares in the company. Past investors have included Hermes Private Equity and Dubai International Capital.
Revenues and income
The attractions business relies significantly on paying visitors. In 2010, Merlin saw the number
of visitors grow to 41 million-plus worldwide. This boosted group revenue to £800.8m, a
4.1% jump from the previous year. EBITDA (earnings before interests, taxes, depreciation
and amortisation) rose 8.5% to £255.8m. Merlin invested about £104m last year alone
on expansion; it had also spent more than £100m in 2009. That year, Merlin’s revenue
leaped 16% to £769m despite the global economic implosion in 2008. Ultimately, however, its expansion ambitions and the recession bit into Merlin’s strategy last year. The company postponed plans for a stock
-exchange flotation to raise a reported £1bn to slash debts. According to Bloomberg News,
that was when CVC Capital came on board and acquired a 28% stake.
The theme-park business
Operating theme parks and other types of amusement and leisure complexes is a capitalintensive business. Marketed effectively and operated efficiently, however, attractions lure in
repeat visitors.
Investors and operators need to consider various factors, including the hundreds of acres of expensive real estate for the sites. The locations should be easily accessible to
visitors and constructed to allow for structural expansion. Merlin’s sites worldwide are built on
either its own freehold real estate or leased lands. Other costs include the creation, design,
theming and marketing of rides, in a sector where operators are competing to have the
tallest roller coasters with mind-blowing drops, dizzying vertical loops and Formula-One
speeds. This inevitably requires impeccable health-and-safety standards.
Also needed are scalable ticketing systems to cope with long queues, retail outlets for selling
merchandise, restaurants and the need to constantly install new rides to retain the attractions’ unique source of excitement. A recent trend has been the addition of highquality hotels and other types of accommodation to create vacation destinations. This aims to encourage family visitors to spend more than
one day at the parks.
Legoland
Merlin has publicly positioned the Legoland parks to be central to its international ambitions
to compete against the Disney juggernaut. With more than 400 billion pieces of the iconic
Lego bricks sold worldwide since their creation in 1949, it seemed a no brainer to extend its
application to outdoor theme parks for young families with pre-school and school-age kids.
Denmark-based Lego Group opened the first Legoland in the Danish town of Billund in 1968.
Billund’s success motivated the group to roll out the concept abroad.
Billund was followed by Legoland Windsor in the UK in 1996. Legoland California opened for business in 1999, followed by Legoland Germany in Gunzburg in 2002. Seeing a demand for a water park, Merlin added one to the California site in 2009. Designed to entertain and educate, the parks’ rides and shows are either built from Lego bricks or made to look as if they are. Each Legoland has a miniland,
which comprises miniature but precise reconstructions of national and international landmarks, such as the England’s Big Ben clock and New York’s Empire State Building, made of Lego bricks. As these buildings are in the public domain, no copyright permission is required.
But negotiations with Hollywood’s Lucasfilm would have been necessary for the Star Wars miniland at Legoland California, which has six scenes from the Star Wars movies and Star Wars: The Clone Wars, the animated TV series. The parks feature interactive activities such as the ‘driving schools’ and the ‘fire academies’, where kids and parents drive Lego-designed cars or put out imaginary fires with Legothemed fire engines.
Additionally, there are the Lego Knights Kingdom, which re-enact the world of medieval
knights and castles. Other Lego-built ‘towns’ have Vikings, pirates, and ancient Egypt’s pharaohs for themes and the Duplo Gardens feature play areas made of huge Lego bricks for preschool children.
However, the Lego Group found it was out of its depth in the parks’ business and the
Legolands were sold in 2005 for a reported £250m to the Blackstone Group. Their operation was handed over to the enlarged Merlin , in which Lego retains shares. Since then, the vision for Legoland has
developed. Merlin has introduced Legoland Discovery Centres, which are smaller indoor
interactive versions of the parks. The Discovery Centre was first launched in Berlin, followed by
another in the German city Duisburg, in Schaumberg near Chicago in the US, in Grapevine, Texas, and in Manchester, north England.
Merlin’s strategy of streamlining its brands efficiently can be seen at Legoland Atlantis by Sea Life, a new attraction at Legoland Windsor. The £8m attraction combines the Legoland model with the Sea Life aquarium brand. Launched this year, it features the Legoland
Atlantis Submarine Voyage, which has a Legoconstructed submarine carrying up to 14 passengers travelling in a 1 million-litre water tank filled with 50 species of tropical fish, sharks, and rays. Merlin hopes to roll out the Legoland Atlantis concept to the other parks.
As part of a £30m refurbishment at Windsor, a 150-bedroom hotel will open in 2012 on 2.7 acres of land next to the park. The land is
leased from the Aprirose property-investment fund for 35 years, with the option to renew for
another 35 years. A fifth Legoland, costing more than US$100m, opens in the US state of Florida in October this year. It is expected to be Merlin’s biggest operation to date. Located in Winter Haven on the
now defunct Cypress Gardens park, the new 150-acre Legoland Florida will have 50 rides,
shows and attractions when it opens for business. It is a few minutes’ drive from Tampa and
Orlando, both popular vacation destinations.
European thrills and screams
In addition to the Legoland brand, Merlin owns and operates other parks. These include the
Alton Towers and Thorpe Park theme parks in the UK. They are popular among adrenalinedriven teenagers and young adults because of the death-defying roller coasters. With the family still in mind, however, visitors are given the option of staying at two hotels, a water park and a spa at Alton Towers. Other Merlin UK parks are the more family-oriented Chessington World of Adventures, and Warwick Castle.
On continental Europe, there is Germany’s Heide-Park in Soltau, Lower Saxony; it has one
of the world’s steepest wooden roller coasters Colossos, which was built by Intamin and designed by Germany-based Werner Stengel; and several family-oriented shows. Gardaland is
arguably Italy’s biggest outdoor park with 32 rides including the new Raptor roller coaster
made by Switzerland-based B&M. In Italy, Merlin also owns the Aquatica water park in Milan.
Creativity in attractions
A significant amount of creativity and design goes into the development of an attraction.
Merlin, which has a creative director for its Making Merlin Magic division and plans to appoint a
creative director for the whole group, operates its own creative studios.
They commission or oversee some of Merlin’s most popular rides: Oblivion (made by B&M),
Nemesis (B&M),Thir3teen (Intamin) at Alton Towers; the KOBRA ride (by Zamperla) and the
Vampire roller coaster (by Arrow Dynamics and Vekoma) at Chessington World of Adventures;
Mammut (by Vekoma), described as Italy’s largest coaster, at Gardaland; the bloodcurdling Saw (by Gerstlauer) based on the horror movie, plus Stealth (Intamin) and Nemesis Inferno (B&M) at Thorpe Park.
The creative departments have to consider ticketing systems that can cope with the tens of
millions attending attractions. Like most park operators, Merlin installs “second-gate” attractions. These are smaller adjacent attractions that keep restless visitors fully occupied until the parks’ queues grow
shorter or are designed for those seeking alternative entertainment.The Merlin Annual Pass tickets cost between £156 and £684, depending on whether it is a premium or standard annual pass for individuals
or families of up to five. They allow unlimited access to any Merlin attraction for one year,
with some restrictions for the standard-pass holders. Ticket pricing has become a controversial issue for the industry. UK research by Gocompare.com in August indicated that more
than 50% of British consumers felt theme parks are overpriced. On average, a family could
spend more than £105 on tickets alone for a day out at a UK attraction. This does not include
the costs of food, drinks or merchandise. Those surveyed voted Merlin’s Alton Towers the most popular park, costing a family £100.80 in tickets a day. It was followed by Disney World
in Florida (£823 for five days); Merlin’s Thorpe Park (£105.60 a day), Universal Studios in Florida (at £597.96 for four days) and Disneyland Paris (£194 a day).
Merlin offers fast-track options for the most popular rides and privileges are given to hotel
guests. Visitors are always encouraged to plan in advance by using the websites where online
ticketing is also available. To retain the interest of demanding teenagers and rides aficionados,
Merlin is gradually installing interactive elements in its attractions. A video system has been added to Raptor, Gardaland’s new roller coaster in Italy. Users can capture their every scream on video and collect it when the ride ends.
At a time when developments in home entertainment are dominated by 3D TV, most park
operators, including Merlin, offer 4D cinema. This combines large-screen 3D formats with 7.1
surround-sound audio. 4D also incorporates sensory experiences where elements are injected into the theatre so that the spectators’ senses can feel the weather (snow or rain, for example), feel the earth move and smell a variety of scents based on the on-screen content.
The company works with specialists such as Centre Screen Productions, Sharp Cookies and
Principal Large Format to produce dedicated 4D films. In the UK, one Merlin 4D cinema is near
the London Eye while another is at the newly refurbished Blackpool Tower. The films’ narratives feature spectacular aerial shots of London as seen from the Eye and from the iconic Blackpool Tower respectively
While digital interactivity is gradually being introduced to Merlin’s activities, animatronics is not
new. The oldest exhibit at Merlin’s Madame Tussauds waxwork museums, made in 1763, is
Sleeping Beauty, a ‘breathing’ animatronic replica of Madame du Barry, the mistress of
France’s Louis XV.
Since then, the waxworks museums have featured a blushing Jennifer Lopez, Brad Pitt’s
squeezable backside, a dancing Kylie Minogue and the chance to stand on the ceiling with
comic-book superhero Spider-Man.
The music element
Recording artists and concert promoters use Merlin parks as concert venues. This year
alone, the Black Eyed Peas performed at Alton Towers. The park also hosted the Alton Towers
Live extravaganza with UK hit-makers JLS, McFly, The Saturdays and Eliza Doolittle, while
Peter Andre played at Thorpe Park. The X Factor winner Alexandra Burke and
runner-up Olly Murs had gigs at Warwick Castle in the summer and the Soul Sunday event had
the cast of Thriller Live, the London West End theatrical show, perform Michael Jackson songs
in a tribute.
The Merlin Midway
Realising that not all family members would want to participate in the tall, fast and steep
rides and roller coasters, Merlin developed a series of stand-alone Midway attractions. Smaller in size than the theme parks, they tend to be indoors, interactive and educational and located
at a region’s recreational district. The Legoland Discovery Centres mentioned above are a
typical example; a new one opened at DallasFort Worth, Texas, at the Grapevine Recreation
Mall this year.
Additionally, the Midway ‘second gates’ can be placed next to large theme parks to occupy
visitors not remotely interested in the parks and hence generate a second entry-gate revenue
stream at the same location. An example is the one planned for Legoland Florida, which is
scheduled to open in October. Future Discovery Centres include installations
in Tokyo, at the US cities of Atlanta and Kansas City next year, followed by New Jersey later on.
The popularity of the Madame Tussaudswaxwork museums, another Midway brand,
confirms that even today’s young video-games and social-media addicts are drawn to the tactile
and tangible in entertainment.
The waxworks’ entertainment value has been their ability to allow visitors to get up close and
personal to some of the world’s famous contemporary and historical personalities without the
intervention of body guards and other security.
Merlin employs waxworks sculptors, who are
mostly based in London and are part of the Merlin Magic Making division. They invite the real
-life personalities to be measured, photographed and analysed for their unique physical qualities.
The personalities often supply the required clothing or designers are hired to make replicas.
Using wax, clay and chicken wire, among other materials, the sculptors create virtual doppelgangers. And since fans are encouraged to touch these figures, the sculptures need to be as
physically sturdy and robust as possible. Each waxwork costs about £150,000 and takes up to
four months to produce.
There are now 12 of Madame Tussauds globally: in London, New York, Hollywood, Las
Vegas, Amsterdam, Hong Kong, Shanghai, Washington DC, Berlin, Bangkok, Vienna and, in
September 2011, the UK’s Blackpool. A 13th opens in Sydney, Australia, next year.
The personalities selected are a combination of the world’s state figures, including presidents,
Hollywood stars and local luminaries. For example, the Vienna museum features replicas
of Sigmund Freud, Albert Einstein and Mozart, while the Sydney edition will have doubles of
actors Nicole Kidman and Hugh Jackman.
In terms of copyright, Merlin has needed no
image rights to recreate the rich and famous who consider their selection an honour. The only time
an image-rights issue might crop up is if the subject is portrayed as a well-known fictional
character in a specific setting from a movie, for example.
Last year, Merlin introduced the Madame Tussauds Award with London’s Wimbledon
College of Art to support student artists and sculptors showing great promise.
The Sea Life Centre brand is one of the first attractions Merlin launched when it was still a
small operation located in the coastal town of Poole, in Dorset, south England.
Each Sea Life Centre comprises a large aquarium filled with rare species of sea life and
mammals to offer the best in ‘edutainment’.
There are now 36 sites worldwide. These are installed in either fixed locations at Merlin’s own
parks or a third party’s theme park like Disneyland Paris. London’s Sea Life is the result of
Merlin’s acquisition of the popular London Aquarium in 2008. After a £5m refurbishment, it
was reopened in 2009 and is marketed with another Merlin attraction, the nearby London Eye.
Wheels, eyes and towers
Merlin owns the world-famous EDF Energy London Eye, Europe’s tallest Ferris Wheel 135
metres (443 ft). With more than 3.5 million visitors annually, the London Eye is considered
the UK’s biggest paid-for tourist attraction.
EDF Energy, the utility company, has sponsored the London Eye for three years
starting this January. It will synergise the Eye’s high profile with its role as a sponsor of next
summer’s Olympic Games in London.
The London observation wheel’s popularity is now crucial to Merlin, which has trademarked
the use of the word “Eye” with attractions.
Authorities in Kolkata discovered how protective Merlin can be of the trademark when
they announced plans to launch a Calcutta Eye observation wheel in India. Merlin’s lawyers
have written to the authorities pointing out the “Eye” is an observation-wheel brand that
belongs to only Merlin.
In northern England, Merlin recently joined forces with Blackpool Council to help revitalise a
declining Blackpool after many failed attempts, and to reposition it back to its roots as a seaside
family-holiday destination. Blackpool is now undergoing a £350m regeneration programme
that is funded through a mixture of government grants, European funding and private
investment.
At the strategy’s heart is the £40m restoration and redevelopment of the iconic Blackpool
Tower and surrounding buildings.
This involved the Council taking the Tower into public ownership in 2010, the first time its 117
year history.
Originally completed in 1894, the Tower stands at 158 metres (518 ft) tall and is one of the UK’s
most famous landmarks. Merlin has taken over the management of the Tower and this project.
This includes bringing three more of its global brands to Blackpool: Madame Tussauds
Blackpool opened in April 2011; in the Tower itself is Merlin’s Blackpool Tower Dungeon; and
the Blackpool Tower Eye observation deck comes complete with a 4D preview cinema and
its new floor-to-ceiling SkyWalk giving a bird’s eye panoramic view of the coastal town.
They join the Tower’s famous Ballroom, circus and Jungle Jim’s , the kids' adventure
playground. In addition to the existing Sea Life aquarium, they give Merlin eight attractions in
Blackpool, the most in any one of its markets worldwide. In September, the Tower’s new look
was unveiled to coincide with switching on Blackpool’s famous winter illuminations.
Merlin’s biggest competition in Blackpool is the Blackpool Pleasure Beach theme park, one of
the biggest in Europe, which recently added a kids area called Nickelodeon Land, based on
Viacom’s global children’s TV network.
Another Merlin observation tower, the 425-ft Orlando Eye, is planned for the US$100m
I-Drive Live tourist complex being built to boost tourism in that part of Florida from 2013. It will
be joined by a local edition of the Sea Life Centre and Madame Tussauds. Legoland
Florida will be nearby.
Merlin’s other future plans include hotels at Legoland California and Thorpe Park in two
years’ time, another Legoland in Dubailand and a Pepsi-sponsored Globe Observation Wheel in
New Jersey.
The Asia-Pacific connection
To kick start its long-term presence in the AsiaPacific, Merlin recently acquired a portfolio of six
attractions from Australia’s Village Roadshow. Completed in March, the acquisition comprises
attractions that complement Merlin’s Sea Life and Eye operations.
In Australia, the attractions are the Sydney Aquarium, Sydney Tower Observatory and
Skywalk; the Sydney Wildlife World; Manly Oceanworld, and the Hamilton Island Wildlife
Park. The New Zealand element comprises Kelly Tarlton’s Antarctic Encounter &
Underwater World.
Cash will be spent to bring them in line with the Merlin branding strategy. Moreover, the
company will add new entertainment such as the Sydney Madame Tussauds next year.
In other parts of Asia, Merlin has opened a temporary Madame Tussauds site in Tokyo to
be followed by Legoland Malaysia next year. There is also going to be a Legoland Discovery Centre in Tokyo in 2012.
The Korean connection
Merlin is in talks with private investors and the national and local governments to extend its
brands to South Korea. A possible site for a new Legoland could be in Chuncheon City, 40 miles
away from the capital Seoul. It is well-known for its reliable public transport system and popular
resort islands on lakes.
Source:
http://jaykaymediainc.com/uploads/portf ... 3final.pdf
