May
31

The Grand Ole Opry & Gaylord Sold to Marriott

May 31, 2012 - By Trigger  //  News  //  14 Comments

As first theorized here in late April, Gaylord Entertainment, the parent company of the iconic Grand Ole Opry and radio station WSM, has been sold to Marriott International for $210 million. On May 16th, the company allowed a “poison pill” to expire, making the possibility of a sale a reality. According to a press release by Gaylord about the sale, the company will retain its Grand Ole Opry holdings for now, however will be reorganizing into an REIT, or Real Estate Investment Trust, meaning Gaylord is no longer an autonomous, shareholder-owned entertainment company, but a real-estate holding, and a subsidiary of the Marriott hotel chain.

The theory behind the sale and restructuring of Gaylord is to better manage the current Gaylord business that has gone from a company that predominantly owned radio stations, newspapers, and entertainment outlets, to owning 5 huge hotel properties in Nashville, Orlando, Grapevine, TX (Dallas), National Harbor, MD, and Denver (scheduled to open 2014). By restructuring into an REIT, Gaylord will receive certain tax benefits, and will be able to run more efficiently in a larger hotel corporate structure.

We are thrilled to be aligning with Marriott, an organization that consistently receives the industry’s highest praise among group customers and meeting planners.” says Gaylord CEO Colin Reed. “The REIT structure allows us to benefit from a more efficient tax structure, and establish a platform to grow our distinct asset base through organic growth of our existing portfolio and, in time, through strategic acquisitions. Moreover, we believe that by working with Marriott International, our shareholders will benefit from significant property efficiencies and corporate overhead reductions, as well as revenue synergies which include Marriott’s ability to attract and market to large group customers.

The press release from Gaylord about the sale expressly states the Grand Ole Opry and its real estate assets will remain assets of Gaylord.

Gaylord will continue to own and operate the Grand Ole Opry, Ryman Auditorium and other attractions as taxable REIT subsidiaries. Nothing will change at these iconic assets of the Nashville community, and Gaylord is fully committed to maintaining the legacy of these historic attractions.

However as Gaylord restructures into a real estate holding company over the coming months, an Opry sale could still be a possibility, if not a greater probably in the long term as the company continues to move away from the entertainment business.

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Barring a Grand Ole Opry sale during restructuring, this all could be bad news for friends of the Grand Ole Opry hoping for a return to the institution’s roots, or maintaining the roots that have been left in tact during Gaylord’s management regime. Becoming part of an even larger corporate structure, especially one not focused on entertainment, means even more focus of efficiencies and revenue, and less understanding of the Grand Ole Opry’s unique importance and place in the legacy of country music within the corporate structure The Opry finds itself in. The Opry’s business model was conceived nearly 85 years ago, and its viability depends on retaining certain values and traditions from that original structure that many times clash with today’s for-profit environment.

When Gaylord and Marriott talk about “significant property efficiencies and corporate overhead reductions, as well as revenue synergies…” this means The Grand Ole Opry could be be susceptible to even more rigorous oversight and revenue goals that do not reflect the institution’s original or core values. Even though Gaylord retains ownership in name of The Opry and its hotels in the larger Marriott structure, what Gaylord is selling is the rights for Marriott to manage Gaylord assets, including The Opry. And as Gaylord says in in the press release, it is not focused on entertainment as it restructures to an REIT, but is “focused primarily on group-oriented destination hotels in urban and resort markets.

Furthermore for communities like Nashville, this restructuring will mean job losses as Gaylord trims the fat, and eliminates redundant positions Marriott can already manage. The Marriott press release from CEO Arne Sorenson mentions, “We will continue to focus on building careers for Gaylord’s “STARS”, whom we will welcome to the Marriott family,” but positions will be cut as the two companies merge and attempt to benefit from business synergy. This move also has specific effects on Gaylord’s Denver, CO property still under construction. According to Gaylord, the scope of this property will be scaled down during this process, two weeks after an $81.4 million tax incentive was approved by local officials for the already controversial project.

14 Comments to “The Grand Ole Opry & Gaylord Sold to Marriott”

  • You’re right. They should sell the Opry to the Country Music HOF. They should sell it to them for a dollar.

       2 likes

    • Since Gaylord and Marriott are business, they are going to want to try and get something for an asset like The Grand Ole Opry and specifically for its real estate holdings. But the problem of trying to sell The Opry to another for-profit business, is that the Opry does not make any profit. So yes, aside from it’s real estate, it is probably worth about $1 on the market. But to country music and its fans, it is priceless.

      As poguemahone points out below, the naming rights are the reason The Opry remains in Gaylord’s and now Marriott’s portfolio.

         0 likes

  • I hate to say it, but the opry is pretty much a non-entity for me. I do find it curious they just recieved a huge public subsidy and becoming part of a REIT allows them to use certain tax loopholes. This is obviously a business deal. All about the Benjamins…

    Selling the opry to CMHoF would come with a price. The brand is too valuable. Even if the buildings all burned to the ground, the name still has substantial value, perhaps the most value of any asset the Opry has.

    The only way to find out how Marriott will handle this is to watch them. However, this is all about the Benjamins, and they probably won’t want to devalue the core asset of the name. On the other hand, you can do some pretty atrocious things to a name and still have the brand retain value if it has built up enough goodwill. Schwinn bicycles come to mind. Boy, do they suck now.

       1 likes

    • You’re right, the value of The Opry to anybody is in the name, and I hate to say that you are not alone in not caring very much what happens to The Opry. The very first story I posted on this it immediately got lumped in as a Reinstate Hank bit when it didn’t mention the movement even once. (http://tinycatpants.wordpress.com/2012/05/01/no-dead-people-are-members-of-the-grand-ole-opry/) Many folks are tired of The Opry AND Reinstate Hank because they’ve become so disenfranchised with the Opry, they don’t care if Hank gets reinstated or not, and in some cases, don’t want him to be because they don’t want him identified with that institution.

      But somebody has to care dammit. The fact that nobody cares, including the people that own The Opry is all the more reason to care in my opinion. That said, I can’t blame anybody for not caring.

      This isn’t the first time I’ve cared more about a country music institution than it cares about itself. One can makes the case that without the Grand Ole Opry, country music as a legitimate American genre of music doesn’t exist.

         3 likes

      • I don’t think you can make that argument, really. There were plenty of other similar programs way back– the Old Dominion Barn Dance and the Louisiana Hayride come to mind, I know there were others, some specializing more in Country Blues like the King Biscuit Flour Hour. The Opry happened to be the one that came out on top. If not the Opry, it would have been another program. And music is a pretty capable creature; it can survive without institutions (it seems to be surviving pretty well as the record labels go into the toilet). You can certainly make the argument the Opry has an effect on today’s music; but country would still be legit with or without it. It might be a bit different.

        At this point, the name has so much value I suspect the Opry will survive, though. Too much equity, even for the business types to really mess with. They may be souless robots, but they’re smart souless robots. Or we can hope.

           0 likes

  • The best hope for the Opry is a entity meant to showcase country music is the hall of fame option but if it becomes a shell in a larger game of chess this could not end well.

       1 likes

  • this doesn’t bode well. follow the money. then follow the skim. somewhat harder to do.

       0 likes

  • Might as well take the Rymon Auditorium and ship it off to Branson Mo. That shit is dead and gone.

       1 likes

  • [...] The Grand Ole Marriott   [...]

       1 likes

  • Wow how strange they would do that, big biz , I haven’t followed the country scene for awhile , I see a lot of new artists, Shocking they would sell that amazing.

       0 likes

  • I was doing a little research about this subject recently trying to figure out the current situation, and I’m pretty sure this article is off base.

    If I understand correctly, Ryman Properties (formerly Garloyd) basically has two factions: the resort/real estate properties and the entertainment properties.

    Ryman/Gaylord simply sold Mariott the rights to *manage* the resort and real estate properties, but they continue to be owned by Ryman/Gaylord.

    The entertainment properties, which include Ryman Auditorium, WSM-AM, and the Grand Ole Opry, are still both owned and operated solely by Ryman/Gaylord.

    Ryman Properties is not a subsidiary of Marriot, and Marriot has no direct control over any of the entertainment properties such as the Opry.

    Maybe you already knew all that. It took me a long time to figure it out, as a lot of the information on the internet is confusing. For example, the Wikipedia page is muddled, making contradictory claims in seperate sections of the article. I think the part with the heading “Properties” has the correct information.

    The best source I could find was the company’s own website.

    http://rymanhp.com/about-us/

    Still, at the end of the day, I agree with the concerns written about in this article a year and a half ago. We still have the problem of a “real estate investment trust” owning beloved musical institutions,

    Personally, I think Ryman Properties’ intentions are good, and overall I think the entertainment properties continue to be quite well run. Ryman Auditorium is thriving as a cornerstone of the contemporary Nashville scene, and the guided tours there are excellent and full of great history. WSM’s playlist isn’t perfect, but it is by far the best country station in Nashville, with Eddie Stubbs, classic country tracks, and actual listener requests.

    Of course, the Opry itself is a whole ‘nother can of worms, but I think it is doing pretty well considering the circumstances. I suppose the fact that it continues to exist at all is not to be taken for granted. Some of the performers are frustrating, but I realize it’s a for-profit show broadcast on a dying medium in the context of a crappy musical landscape that is beyond the show’s control. However, if pop-country radio was forced to mirror the Opry’s musical lineup, it would be a big improvement. Obviously the dream would be to have the Opry owned by some kind of non-profit group or at least an institution that could take a more curatorial role in presenting the show.

       0 likes

    • Make that “Ryman Hospitality Properties.”

         0 likes

    • I thought I made it pretty clear up above that this was the case.

      “The press release from Gaylord about the sale expressly states the Grand Ole Opry and its real estate assets will remain assets of Gaylord.

      Gaylord will continue to own and operate the Grand Ole Opry, Ryman Auditorium and other attractions as taxable REIT subsidiaries. Nothing will change at these iconic assets of the Nashville community, and Gaylord is fully committed to maintaining the legacy of these historic attractions.”

      However, it is my assertion, and was also the assertion of one of the investors in Gaylord, that the restructuring would cause a lack of focus on the Gaylord assets tied to the entertainment business. I really would have to go back and re-read everything on this subject to understand exactly what you’re saying is wrong here, but fundamentally, regardless of who the owner in name is, if The Opry is owned by a real estate company, they are going to be beholden to their upper management and The Opry will suffer.

      I wrote a ton of articles on this subject (that incidentally, very few people read, and even argued with me if it was relevant), but here is one that may help clarify why the Marriott management structure could be a problem:

      http://www.savingcountrymusic.com/top-investor-wants-grand-ole-opry-spun-off-from-gaylord

         0 likes

      • Thanks for reading my long-winded comments and replying.

        I wasn’t aware of this issue when it was happening and figured out about this stuff when I was simply wondering whether Gaylord still owned the Opry or not.

        Like you I’m surprised more people aren’t interested in this. I realize many people don’t bother listening to the Opry anymore, but hell it’s an American tradition. I can also say that the future of all of these properties is crucial to Nashville as a city, especially the Ryman, which was almost lost once due to stupidity.

           0 likes

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