Volume 3, No. 3. February 14, 2003
Big
fish story
Pardon the pun,
but a sea change is at hand.
Ripley Entertainment is setting off on an adventure with its proposed takeover
of the bankrupt Ocean Journey Aquarium in Denver, Colorado (for details, see
Extra! Extra!).
However, if the company succeeds in turning the institution into a profitable
venture, look for more such transfers in the future.
“If we can make this work we’ll be out there looking at other aquariums,”
Ripley Entertainment President Bob Masterson said. “A lot of people would
like to find a private sector solution to a public sector problem. If we can
provide that, that’s great.”
Ripley’s has a good track record with aquariums, earning both aesthetic
and commercial kudos for the facilities the company built in Myrtle Beach, South
Carolina, and Gatlinburg, Tennessee. The Myrtle Beach aquarium became a benchmark
design for aquarium operators and builders, while Gatlinburg’s facility
was, at almost 2 million, the top drawing aquarium in North America last year.
Ocean Journey, the first existing aquarium the company has attempted to purchase,
represents a new set of challenges for the Ripley team. If the bid goes through
(it still must gain bankruptcy court approval), Ripley’s financial stake
would not be too burdensome: $4.5 million to purchase the assets and another
$8 million to $10 million in near-future capital improvements, Masterson said.
But Ripley would be under no obligation for Ocean Journey’s outstanding
$63 million debt, of which $57 million is owed to bondholders, $5.7 million
is owed the city and county and $335,000 owed to unsecured creditors.
“It’s going to be hard to overcome hard feelings from people who lost
money when Ocean Journey ran the business,” Masterson said. “That
has nothing to do with us. We’re just the people coming in salvaging the
business that’s in trouble.” The company has been warmly welcomed
by local government officials and endorsed by the bondholders.
However, Ripley definitely is taking over a fixer-upper. “I think the exhibtry
and theming are excellent, but they are not entertaining,” Masterson said.
“It’s lacking in entertainment value to keep people coming back. We
have to make some changes to do that.” He feels the aquarium needs a big
“wow!” when guests enter and an even bigger “wow!” when
they leave, both of which are currently lacking. At some point the company may
close the aquarium temporarily to make major enhancements, but for now he wants
to maintain operations.
Ripley’s other two aquariums has relied heavily on changeable exhibits,
spending $500,000 per exhibit “not counting market costs,” Masterson
said, “and then we market the dickens out of it.” The used exhibits
are sitting in a warehouse and available immediately for insertion at Ocean
Journey.
Masterson does not foresee large scale changes in personnel—“Part
of the assets you get are the skills of the people there,” he said—but
Ripley cannot us the 500 volunteers working there because, unlike Ocean Journey,
it is a for-profit venture.
Though not as dynamic as its other two markets, Denver does give the aquarium
a strong enough customer base, Masterson said. “There’s a lot of tourists
in Denver, but they’re not as concentrated in one area as they are in Myrtle
Beach and Gatlinburg.” His business plan looks to stabilize attendance
at 800,000 annually. “If you look at their numbers the first two years,
they did a million people in the first six months, and in 12 months they did
1.2 million. The people are there, they didn’t come back. They did not
perceive it as something they needed to come back to every year.”
If Ripley Entertainment can get people to come back to Ocean Journey and turn
the aquarium industry’s flagship financial failure into a profitable venture,
look to Ripley’s having a ready-made chain of government-funded aquariums
lining up across the land.
©2003, Minton Enterprises
LLC
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