HBJ Would Consider Sale of Sea World

Harcourt Brace Jovanovich is willing to sell the Sea World aquatic park in San Diego and its five other theme and entertainment parks for $2.5 billion, HBJ Vice Chairman Robert Edgell said Monday during an interview with a newspaper in Duluth, Minn.

“I think (HBJ Chairman William Jovanovich) is fed up with the amusement and entertainment business,” Edgell told a reporter with the Duluth News-Tribune. HBJ officials confirmed Tuesday that Jovanovich had discussed the $2.5-billion figure with Edgell, but declined to comment further.

Amusement park industry observers, however, doubted whether any company would pay $2.5 billion for the six parks, even though the HBJ Parks Division is highly profitable.

“That seems like a very, very high price,” one amusement industry consultant said. Bally Manufacturing “for example, just sold its (nine) Six Flags Magic Mountain parks to Wesray for $350 million in cash.”

Edgell also told the Duluth newspaper that HBJ views certain Japanese firms that operate entertainment and amusement parks as a “perfect, potential” buyer for HBJ’s parks division. Edgell told the newspaper that some Japanese firms might be interested in acquiring the kind of parks operated by HBJ.

Edgell suggested that a Japanese firm could “replicate” the Sea World concept throughout Southeast Asia and elsewhere in the world.

HBJ owns Sea World parks in San Diego, Ohio, and Orlando, Fla. It will open a $140-million aquatic park in San Antonio early in 1988. The publishing company also recently acquired Cypress Gardens Park and the former Circus World, in Orlando.

HBJ refurbished the aging Cypress Gardens and has opened the “Boardwalk and Baseball” park at the former Circus World site.

HBJ’s parks division generated about 25% of HBJ’s $173 million in operating profits during the year ended Dec. 31. HBJ’s core publishing business generated nearly half of the company’s $969 million in 1986 revenue.

HBJ recently agreed to spin off a trade magazine publishing division to a new company to be headed by Edgell. That sale was forced by a recent recapitalization plan that thwarted an unwanted takeover by British Printing & Communications Corp.

That recapitalization increased the Orlando-based company’s debt load to $2.7 billion. However, Edgell told the Duluth paper that the possible theme park sale was not driven by that recapitalization.

Several Japanese firms might be interested in acquiring a U.S.-based theme park, according to an accountant who is familiar with Japanese entertainment companies. Tokyu Group and Seibu, two Japanese conglomerates, for example, own and operate parks throughout Japan, the accountant said.

However, “those companies might not be interested in buying and then managing multiple locations” around the United States, the accountant said.

Word of the possible sale came just days after HBJ removed top San Diego Sea World executives from their jobs and ordered killer whale trainers at its aquatic parks to stay out of whale tanks. The moves were in the wake of a highly publicized accident Nov. 21 that left a 27-year-old trainer hospitalized in serious condition.

During a Dec. 8 press conference in San Diego, Jovanovich said that the killer whales could be “educating and entertaining” without having human trainers in the tanks during performances.

Jovanovich also acknowledged that trainers at the San Diego park had been involved in about 14 accidents, some of which resulted in serious neck injuries.