Spielsberg's buyout clause 2010 from Universal

During tumultuous times, Universal is facing an uncertain future with large debts and 20% decrease in park attendance. Universal must refinance it's $1 billion debt by April 1, 2010 while lenders know that Steven Spielsburg, could exercise a buyout next year.

As an exclusive consultant for Universal, Spielsberg's whose name is on different attractions could exercise a lucrative buyout in 2009. Currently, Spielsberg receives a percentage of revenues each year grossing nearly $20 million including comparable projects around the world.

Lenders must factor in the potential buyout when determining whether to restructure Universal large debt. These problems could affect Universal's plans to build theme parks both in Dubai and Singapore.

It behooves Universal to renegotiate their contract with Spielsberg making it easier to acquire loans from potential lenders. If Spielsberg were to exercise his buyout next year without waiting for Dubai & Singapore attractions to come online, it could be detrimental for Universal.

Now that Seaworld is for sale, Universal's owner GE may be considering a purchase of the theme park to help increase revenues against declining park attendance.