Ryman Hospitality Properties closed its purchase of Block 21, a mixed-use property in downtown Austin that includes the ACL Live at Moody Theater, the home venue of the television program Austin City Limits, the company announced Wednesday (June 1). Ryman paid about $260 million for Block 21, which also houses the W Austin Hotel as well as retail and office space.
In addition, Ryman announced it expects its planned sale of 30% of the company’s Opry Entertainment Group to investment firm Atairos Group and media giant NBCUniversal will close during the second quarter. Opry Entertainment Group, Ryman’s country music-focused division, includes the Grand Ole Opry in Nashville and two downtown Nashville music venues: the Ryman Auditorium and the Wildhorse Saloon. Announced in April, the investments value Opry at $1.4 billion inclusive of the Block 21 acquisition. Atairos Group and NBCUniversal will invest an additional $30 million if certain performance targets are met.
“We look forward to leveraging our existing platforms and our proposed strategic partnership with Atairos and NBCUniversal to carry forward their good work as we position Block 21 and Austin as a destination for music lovers across the globe,” Colin Reed, Ryman’s chairman and CEO, said in a statement. Following the news, Ryman shares rose 6.3% to $94.94 on Wednesday and increased an additional 0.5% to $95.40 on Thursday (June 2).
The new investors could accelerate existing growth in Ryman’s entertainment division. Ryman received 84% of its $939 million of revenue in 2021 from its hotel and resort properties and just 16% from its entertainment division, which also includes the WSM-AM radio station and a 50% equity interest in Circle, a country lifestyle media network available to more than 70% of U.S. households through over-the-air and cable television. That share was up from 11% in both 2019 and 2020, and Ryman management has ambitions for more growth. But as Reed explained in an investor call on April 5, Ryman’s business structure — it is a real estate investment trust — “is not ideal” for its entertainment division. “This creates some challenges for us as we look to continue to grow this business and unlock its value,” he said.
Enter Atairos and NBCUniversal. In the second quarter of 2021, Ryman asked Morgan Stanley to help re-work its corporate structure and evaluate partners that could bring expertise and resources while being committed to preserving “the cultural integrity of the assets under our care.” Atairos and NBC Universal bring those qualities to Opry, said Reed, noting that they bring “patient capital, deep industry expertise, a vast network of resources, capabilities and relationships highly relevant to the Opry family as well as an international expertise.”
Atairos will invest about $278 million and NBC Universal will invest about $15 million. They have the right to purchase up to 49% of Opry Entertainment Group.
Ryman’s entertainment division also includes Ole Red, a chain of multi-level bar/music venues in partnership with country star Blake Shelton. Since 2018, Ryman has partnered with Shelton to open five Ole Red locations in Tishomingo, OK; downtown Nashville; Orlando; Gatlinburg, Tenn.; and, in May, the Nashville airport. A sixth Ole Red is slated to open in Las Vegas in 2023.