Commentary

M&A activity heats up the entertainment space

The growth of M&A activity is to be expected given the vulnerability that some properties experienced during the global health crisis versus the rapid growth that many are enjoying during the still nascent recovery.

Image: Adobe Stock.

November 20, 2023 by Kevin Williams

A constant thread in much of the reporting in the entertainment sector of late has been the spate of mergers and acquisitions taking place, all reflecting the continuous growth of the business. One factor driving much of this activity, however, is the disparity in accumulated assets following the privations of the global lockdown, favoring some operations over others. As well as perception from investors towards attempting "landgrabs," as some corporations are seen as vulnerable.

A busy November

November kicked off with news of the latest notch on the bedpost regarding mergers with the announcement of a deal to see Cedar Fairs merge with Six Flags Entertainment — creating what has been valued as a $8 billion corporation comprising 42 parks and nine resorts. It was reported by The Wall Street Journal that this would be an all-stock deal amounting to some $2 billion.

Exact details on the deal are still to be revealed, although it was stated that this merger was undertaken to create a more robust operating model and a stronger revenue and cash flow generation profile. This is the latest attempt at discussions to merge since 2019. Some observers are stating this was undertaken to fortify a slowdown in consumer spending.

Soon after, Topgolf Callaway Brands Corp. announced it had acquired one of its competitors with the $29 million acquisition of the BigShots golf chain, owned by Invite, of certain locations and brands. This move will see the BigShot single site and franchise holding rolled into the Topgolf operation, with plans to apply the BigShot brand as a selected offering within selected venues, such as employing its "Toptracer" technology.

Likewise, Invite will promote the Topgolf brand across its traditional golf courses. A lot of traction has been witnessed in the "golf-tainment," seeing Topgolf itself being acquired by Callaway, which was completed a year ago.

The explosion in social entertainment regarding golf sees several mini-golf, shooting range and golf-simulator experiences receiving investment towards a new land grab.

Topgolf Callaway Brands also revealed the development of a mobile venue concept — the first of which will go into action at the McGowan Park Shopping Center in Dallas. The Topgolf Mobile venue, as it is known, will comprise 60 hitting bays, equipped with the Toptracer technology retained during the latest partnership, along with a nine-hole mini-golf course. This will be the first rollout of the concept, which is hoped to expand on the already established 95 Topgolf permanent venues business.

EVO Entertainment on the move

Developments in "cinetainment," along with social entertainment, have also gained momentum — an example of this was seen with the news that EVO Entertainment Group had acquired Austin, Texas-based chain Violet Crown Cinemas. This will see the chain continuing under its brand, now as part of the group which at the same time will see EVO Entertainment Group rebranding itself as Elevate Entertainment Group.

The group will operate a range of chains including EVO Cinema, EVO Entertainment, Elevate Rewards, ShowBiz Cinema and Times Square Grand Slam along with the new acquisition.

M&A was also seen in the bowling entertainment scene, with Hollywood Bowl Group PLC acquiring U.K. based Lincoln Bowl, adding to the 71 Hollywood Bowl Group venues currently operational. The management team confirmed, with this new acquisition, that the Lincoln Bowl facility will be seeing reinvestment and refurbishment to the 10-pin bowling facility, to follow the branding and theming of the operation, at the price of some £500,000 ($622,850).

One aspect of the new boutique approach to bowling will be refurbishing the bowling lanes to accept players using their own shoes without needing special footwear, along with enhancing the F&B offering of the location, as has been carried out across the chain's large operation.

M&A activity is a natural occurrence of the free market economy. In the entertainment sector, as in many other industries, the ebbs and flows are often intense.

(Editor's note: Extracts from this blog are from recent coverage in The Stinger Report, published in collaboration with the LBX Collective and publisher, Kevin Williams, the leading interactive out-of-home entertainment news service covering the immersive frontier and beyond.)

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About Kevin Williams

Along with advisory positions with other entrants into the market he is founder and publisher of the Stinger Report, “a-must-read” e-zine for those working or investing in the amusement, attractions and entertainment industry. He is a prolific writer and provides regular news columns for main trade publications. He also travels the globe as a keynote speaker, moderator and panelist at numerous industry conferences and events. Author of “The Out-of-Home Immersive Entertainment Frontier: Expanding Interactive Boundaries in Leisure Facilities,” the only book on this aspect of the market, with the second edition scheduled for a 2023 release.

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