One investment I made principally in the major Covid drawdown in March of 2020 was in Ryman Hospitality. It’s a hotel company that owns the Gaylord hotels, which are group / convention specific hotels. Discussion of that business is for another day.
Ryman also has incubated a country music focused entertainment business segment which includes live music venues (Ole Reds, Austin City Limits Venue, Grand Ole Opry in Nashville, etc.) and a country music digital streaming business (Circle). The country business is booming as it is already well above 2019 levels of business and just announced a new Ole Red music venue right on the Vegas strip next to Caesar’s Palace.
Here’s a broad view at country music statistics for the US, showing good tailwinds despite what many (read: anyone who doesn’t like country) may think:
Yesterday, Ryman announced that it recapitalized its country music entertainment division with both equity and debt. It sold 30% of the equity for ~$300M and took out a $300M term loan at the entertainment level, ultimately to dividend ~$600M up to the parentco / hospitality business. This valued the business around 17-18x EBITDA.
Ryman lost ~$600-700M in 2020/2021 due to Covid shutting down its business in totality (zero conventions) – so in large part this gets them back to normal with respect to their balance sheet. The buyer was effectively NBCUniversal / Comcast – so it’s a strategic buyer with deep pockets and a strong interest in growing the business.
All in all, I’m happy Ryman is back on its front foot, and continues to own 70% of the business. If they spin off the country business, it’s one I likely will not sell, and perhaps buy more of if the price is right.
Disclosure: We own shares of RHP, this is not investment advice. Do your own work.