Yesterday, news broke that involved Gaylord Entertainment, the company that owns WSM and the Grand Ole Opry. Gaylord's stockholders, at their annual meeting on Thursday, voted to make it more difficult, if not impossible, to extend beyond mid-August a poison pill that the company has used up to now to ward off a hostile takeover. The vote comes as Gaylord explores ways to increase shareholder value, a process that analysts said could lead to a sale of the company in parts or whole, or possibly spinning off some properties as part of a reorganization plan. One Wall Street money manager has talked of putting Gaylord properties in a real estate investment trust or REIT to monetize those holdings and help boost the hotel chain's stock price. Another opinion is that Gaylord will pursue something other than a sale, perhaps creating a separate real estate investment trust.
Cris Blackman, who runs Empirical Capital Management of Hendersonville, said he wouldn't be surprised if Gaylord's largest stockholder, TRT Holdings Inc, tries to scoop up the company. TRT, a fund controlled by Texas billionaire and Omni Hotel owner Richard B. Rowling, controls a 21.8 percent stake in Gaylord, plus two seats on the board. Or, Blackman said, Gaylord could spin off properties and create a separate company for its convention booking operations, which could then also book business at non-Gaylord properties to win additional revenue.
The reason for concern is several. First, we know that the hotel and resort operation is the primary business that Gaylord is in. With the exception of WSM, the Opry, the Opry House, Ryman Auditorium and Wildhorse Saloon, they have sold off everything entertainment related over the years. And we all know what they wanted to do with WSM several years back. The second concern is that in all the media coverage yesterday and today on this news, all of the speculation had to do with the hotel business. Nothing was stated or mentioned about the Opry or WSM. Third concern is that TRT Holdings are the ones involved in the new Nashville Convention Center and the Omni Hotel that is being built in downtown Nashville that will be connected to the Country Music Hall of Fame and the Convention Center. And finally, TRT Holdings has made it known over the past year that their real interest in Gaylord is with the hotel and convention business. I also read a report somewhere that mentioned that Richard B. Rowling, while based in Texas, is not a real fan of country music.
I think many of us can remember the uncertainty that Opry fans went through in the 1970s and early 1980s when National Life was taken over by American General. At the time, American General wanted nothing to do with the Opry or Opryland and Bud Wendell spent a majority of his time finding a buyer for the Opry and related properties.
I know many of us have strong opinions on how Gaylord and it's management has treated the Opry. But we also have to remember that Gaylord has kept the Opry going. Look at what happened when WWVA in Wheeling was sold to Clear Channel and Live Nation took over Jamboree USA. At the time, it was the 2nd longest radio program in the nation and it wasn't long after that when Jamboree USA was shut down. WLS changed format and new management ended the National Barn Dance. The Opry is the last of its kind. Who is to say what a new owner might or might not do.
Could WSM and the Opry be sold? I really think it is a possibility. If the primary business of the company is the hotel and convention part of it, then you would think the entertainment division could be sold off. And with WSM a 50,000 watt, clear channel station, it could bring lots of cash to a company that is struggling. Where does the Opry fit in? Good question. In my thinking, WSM and the Opry are tied together and I think it would be hard to put a value on the Opry alone. WSM can survive without the Opry but I really wonder if the Opry could survive without WSM. And what value would the Opry have without a 50,000 watt radio station to broadcast the show?
I know it has been mentioned before regarding who might buy the Opry. One idea that has come up many times is a non-profit trust that would preserve the show. That would be a great idea but it would take a substantial investment to pull that off. Gaylord just is not going to give the Opry away. They would be looking for some fast cash. After what Live Nation, the country's largest concert promoter did to Jamboree USA, do you really want them to purchase the Opry? Disney has been mentioned in the past but I have heard nothing on that front.
The rest of 2012 could be very interesting for Gaylord and the Opry. The bad news is that with Gaylord trying to move its stock value up, there will probably be more cuts at the Opry and little spending done to improve the show. Whatever decision Gaylord makes, I hope it will be the right one and the Opry will be preserved and put into good hands. But whose hands those might be, I do not know.