Universal delays huge potential Spielberg theme parks payout
In a move that spares Universal Orlando theme parks 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 a longstanding consulting agreement.
The amended deal will make it much easier for the theme park company to renegotiate a heavy debt load that comes due next April and could ultimately net the director even more money than he would otherwise have received.
As part of the agreement signed in 1987 with Universal Orlando, a joint venture of General Electric Co.'s NBC Universal and private equity firm Blackstone Group, Spielberg receives 2% of ticket sales and a portion of concessions at the company's two Florida theme parks. In addition, he gets a portion of revenue from Universal Studios Japan in Osaka, but not from 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 would likely have been a financial hardship for Universal Orlando, which has $1 billion in debt due next April that it is trying to restructure. In its last annual report, the company acknowledged 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 to Spielberg's deal does not explain what the director is receiving in exchange for agreeing to delay his potential payout, and a Universal spokeswoman declined to comment. However, it appears to be connected to a point that guarantees him a percentage of 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, already one of the richest individuals in Hollywood, as attendance at Universal Orlando is expected to get a boost beginning next spring when a lavish new attraction based on Harry Potter opens.
The deal amendment also spells out that Spielberg's obligations will transfer to any new owners, a potentially important point as NBC Universal may be taken over by cable operator Comcast Corp. in a deal under discussion with the media conglomerate's owner, General Electric Co.
Spielberg declined to comment through a spokesman.
--Ben Fritz and Claudia Eller
Photo: Steven Spielberg at the National Board of Review Awards in 2007. Credit: Evan Agostoni, Getty Images.