Universal Orlando and Spielberg revise contract
In a move that spares Universal Orlando theme parks from a potential financial jam next year, Steven Spielberg has agreed to delay by seven years his option to demand a payout worth hundreds of millions of dollars under the terms of his long-standing consulting agreement.
The amended deal will make it easier for the company to renegotiate a heavy debt load that comes due in April and could ultimately net the director more money than he otherwise would have received.
As part of the agreement signed in 1987 with Universal Orlando, a joint venture between General Electric Co.'s NBC Universal and private equity firm Blackstone Group, Spielberg in perpetuity receives 2% of ticket sales and a portion of gross revenue from concession sales at the two Florida theme parks. He also receives a cut of gross revenue from Universal Studios Japan in Osaka, but not Universal Studios Hollywood.
Last year, Spielberg made about $34 million from the Orlando and Osaka parks for his work consulting on attractions based on movies he has directed and produced, such as “Jaws,” “Back to the Future” and “Jurassic Park,” according to a regulatory filing by Universal Orlando.
He also had the right starting in June 2010 to forgo his quarterly payments in exchange for a lump sum based on the future value of his deal.
That probably would have been a financial hardship for Universal Orlando, which has $1 billion in debt due in April that it is trying to restructure. In its last annual report, the company said that such efforts “could be adversely impacted” by the looming possibility of a huge payment to Spielberg, which it was not certain it could afford.
A public filing of the amendments does not explain what Spielberg is receiving in exchange for agreeing to delay his potential payout. However, it appears to be connected to a point that guarantees him a percentage of gross revenue from Universal theme parks currently in the works in Singapore, Dubai and two undisclosed locations.
In addition, the delay could prove more lucrative for Spielberg because attendance at Universal Orlando is expected to get a boost beginning next spring when a lavish attraction based on “Harry Potter” opens.
The deal amendment also states that Spielberg’s obligations will transfer to any new owners, a potentially important point because NBC Universal may be taken over by cable operator Comcast Corp. in a deal under discussion with GE.
Spielberg declined to comment through a spokesman.