Comcast To Add Fast & Furious Attraction At The Universal Studios Hollywood

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Comcast‘s (NASDAQ:CMCSA) Universal Studios Hollywood will host a new attraction based on its popular film series Fast and Furious. The theme park announced the plans to add a high-definition, 3-D feature to the park’s long-running Studio Tour tram ride by the summer of 2015. The studio will also open its new ride Despicable Me Minion Mayhem on April 12, 2014. [1] While theme parks are just a small part of the mammoth Comcast’s business, they help the company promote other products and services of NBCUniversal and bring in stable cash flows. Theme parks chipped in around $2.24 billion of Comcast’s $64.66 billion revenues in 2013. [2]

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The Fast And Furious-Supercharged

The Fast & Furious-Supercharged will be introduced as the grand finale to the celebrated Studio Tour of Universal Studios Hollywood. The studio said that this technologically advanced thrill ride will catapult guests into the high-stakes underground world of fast cars where they’ll join the cast in a harrowing escapade. The dynamic hydraulic-motion based ride will incorporate hyper-realistic special effects and 3D-HD imagery projected onto the world’s longest and most expansive 360-degree screen spanning nearly 400 feet in length to encircle Studio Tour guests in the Fast & Furious universe. [1] The Fast & Furious-Supercharged attraction is part of a larger expansion that will lead to the opening of The Wizarding World Of Harry Potter in 2016.

Theme Parks Are Important For NBCUniversal

Theme parks are part of NBCUniversal, which contributes 24% to Comcast’s value according to our estimates. However, theme parks generate just around $2 billion in revenue for the giant Comcast. While the proportion of revenue is lower for theme parks, it has a much wider meaning for NBCUniversal and Comcast as these theme parks offer a platform to promote films, media content and other related merchandise.

Theme parks represent one of the few areas of stable growth outside of cable television for media and entertainment conglomerates such as Comcast. Theme parks are vulnerable to swings in the economy and require costly and continuous investments in developing new rides and parks within the theme park.

For 2013, the parks supplied close to 10% of NBCUniversal’s total revenue but contributed more than 20% to its EBITDA (earnings before interest, taxes, depreciation and amortization). The theme parks revenues have grown at an average annual rate of over 9% in the past few years. We expect them to continue to grow higher at an average annual rate of a little under 6% and amount to $3.3 billion by the end of our forecast period in 2020. Even if these figures were to vary from our forecast, it will have a minimal impact on Comcast’s stock price due to its lower value contribution.

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Notes:
  1. Universal Studios Hollywood Makes Unprecedented Investment in Epic Theme Park Transformation, Universal Studio Hollywood Press Release, Apr 9, 2014 [] []
  2. Comcast’s SEC Filings []
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