Busch Entertainment: a colossus with feet of clay?

There is an old French adage that says the best soups are made in the oldest pans. If Busch group parks are often classified among the best in the world, it is because they owe much to their past. But history is constantly rewriting itself and the doubts surrounding the future of the world’s fifth-ranking operator provide a timely reminder of this.

To understand the history of Busch Gardens, we have to start with the history of its founder. Adolphus Busch was born in 1849 in Germany into a family of wine-growers and brewers. In 1857, he left his native country to go and live in Saint Louis in the Missouri. There he met his future wife Lilly Anheuser, also from a brewing background. When his father died, he used a part of his inheritance to make inroads into the brewing industry, and bought up a share of his father-in-law’s business. The Anheuser-Busch group was born. Busch brought innovations to the industry, introducing pasteurisation, and refrigerated transport. With a beer that was potentially sellable all over the United States, Busch made healthy profits.

For the wealthy industrialists of the era, philanthropy was common. To this end, he transformed more than 5 hectares of his winter property in Pasadena in California into a superb garden and opened it to the public in 1905. The vast landscaped botanical park contained a whole host of statues and scenes from the world of the tales of the Brothers Grimm, authors who came from the same region in Germany as Adolphus Busch. The park was soon reckoned to be one of the most beautiful in California, hosting stage shows, charity events and egg hunts at Easter. The garden was also the setting for a number of films such as Gone with the Wind.

The garden was initially designed by the great Scottish botanist, Robert Gordon Fraser, and continued to expand up to the death of Adolphus Busch in 1913. It remained open to the public up to 1937 and, after the Second World War, it was offered to the city of Pasadena, who turned it down. It was thus divided up and turned into residential properties, like another famous pleasure garden in Paris, one hundred years earlier (read “A Tivoli in Paris”, Loisirs Attractions n°1).

The Anheuser-Busch group meanwhile stepped up its activity and developed its communications considerably with great success; in 1957, the group became the largest American brewer producing 11 billion bottles per day. Budweiser, the “King of beers”, became an icon of the United States.

Transformation

In 1959, August “Gussie” Busch Jr., grandson of Adolphus Busch and company CEO, took up the idea of a pleasure park, and used it as a promotional tool for his brand. The first Busch Gardens were created—a landscaped, ornithological park located next to the brewery in Tampa Bay, Florida. Visiting the garden was free and also included beer tastings. When the brewery closed, the park spread out and set itself apart by introducing an African feel with exotic animals. In 1965, the Serengeti arrived in Florida.

Spurred on by the success of this initiative, the group opened a second park of the same kind in 1964 near the Van Nuys brewery in California, not far from Adolphus Busch’s historic garden. The gradual transformation of animal parks into attraction parks took place in the 1970s. In Florida the first attractions—mainly transport and water rides—arrived in 1973 in the “Stanleyville” theme zone, two years after the opening of the first Florida Disneyland park. The first rollercoaster, the Python, an innovative Corkscrew Arrow of the era, opened in 1976.

While promoting their brand, Anheuser-Busch seemed to be leading the way with their new model of landscaped, zoological attraction parks. So the group attempted to apply it elsewhere around the country. In 1971 the group’s third park was inaugurated in Houston, but it closed two years later, due to problems making profits. This failure did not disturb the group’s strategy however, and they went on to open Busch Gardens: The Old Country, in Williamsburg, Virginia, in 1975. This time, the park drew its themes from the European continent, offering a number of attractions such as the Loch Ness Monster roller coaster. The following year the Florida park was renamed Busch Gardens: The Dark Continent, echoing in the European theme of the Virginia park.

In 1979, Busch Gardens in Van Nuys in turn closed and Anheuser-Busch concentrated its efforts on the two remaining parks, which met with resounding success. The same year, the Busch Entertainment Corporation (BEC) subsidiary was created turning what was once a group division into an entity in its own right, capable of managing its own growth and development. 1980 saw the arrival of an Italian section in the Williamsburg park, and above all, the opening of two new parks: an aquatic park in Florida and a park targeted at families based on the Sesame Street television series in Pennsylvania.




The modern age

An important turning point for BEC came in 1989 when they bought four zoological parks in Texas, Florida, California and Ohio for more than a billion dollars. At the time, Walt Disney Co. was also interested in two of them. The new acquisitions gave BEC a chance to promote their brand as well as that of their parent company, as well as to improve income by 500 million dollars.

The 1990s were marked by increased competition from other operators and a host of new attractions, in particular a range of first class roller coasters. It was also the period when BEC tried to get a foothold in the European market, going into partnership between 1997 and 2000 with Universal and Tussaud for the “Port Aventura” project on the Spanish coast.

The trend continued after 2000. The new Discovery Cove park, created in Florida, is a unique environment offering lucky visitors the chance to encounter marine life in almost natural conditions. Increasingly large investments have been put into each site, the biggest of which offers visitors genuine innovations. When it opened at the Busch Gardens, Tampa Bay, in 2005, Sheikra was the highest freefall roller coaster in the world. The same year in Williamsburg The Curse of DarKastle also opened, a hi-tech dark ride combining dynamic effects with 3D. Today only two other examples exist, both at Universal Studios (Spiderman).

At the end of 2007, the group announced that it was pooling all parks under the banner “World of Discovery” and moving its headquarters to Orlando, in Florida. Shortly afterwards early in 2008, it announced, with great pomp and ceremony that it was intending to open four parks in one go, in 2012 (Busch Gardens, Sea World, Discovery Cove and Aquatica) on an artificial island in the shape of a killer whale integrated into The Palm complex in Dubai. The announcement came on the back of a series of announcements from other rival leisure groups such as Universal or Six Flags. Several months later, though, events began to cloud their horizon.

The moment of doubt

In June the Belgian-Brazilian group, InBev, the world’s second largest brewer, launched a takeover bid for the Anheuser-Busch group, the world number three, in a bid to become world leader. After summer-long negotiations, the takeover was officially announced for September after a shareholder vote, casting doubts on the future of the BEC subsidiary, evaluated at 2.5 billion dollars. InBev intends to break up subsidiary assets in order to finance the buy out. The crisis on the stock markets and the credit crunch mean that, as we go to press, there has been no expressed intent to buy out BEC. There are a number of hypotheses surrounding the issue though.

The first is that the subsidiary, alone or in partnership, will be taken over by the Busch family itself, who is very attached to this division. The second involves a buy out or cash injection from the Blackstone investment fund. To Blackstone, BEC could provide an important outlet for its own leisure group, Merlin Entertainment, and its products. Legoland, Dungeons, and Tussauds could also develop in the United States and an interesting partnership could start up between the Sealife and Sea World concepts. Furthermore, Blackstone owns 50% of the Universal park in Orlando, so its intervention in BEC would make it a direct competitor with Walt Disney in Florida. The final plausible hypothesis concerns the Spanish group, Parques Reunidos, who, with the backing of its shareholders Morgan Stanley and Standard Life, would also be in a position to put in an offer and make its presence in the United States felt after the buy out of the Kennywood group at the start of the year.

Disney has also emerged among the interested parties capable of backing the project. The group would like to add the Sea World parks in Florida and California to its cruise destinations. The Six Flags and Cedar Fair groups, however are heavily in debt and do not appear to be in a sufficiently solid financial situation. In passing, the American RSPCA has even offered to buy out one of the Sea World parks, in order to free its inhabitants!

Up to a year ago, Busch Entertainment Corporation, a seasoned group with the backing of an equally seasoned parent company, seemed to be in good shape. The group own quality, profitable parks, and it has announced important plans for growth. The threat to the group has finally come where it was least expected—from the parent company. Today, in a period marked by crisis, the future of the group seems to be hanging in the balance.