Gaylord Shuts Down Internet Unit
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Gaylord Entertainment Co., owner of the Grand Ole Opry, said Tuesday it will pull the plug on its Internet unit, Gaylord Digital, which resulted in a negative operating cash flow of $16.8 million through the first nine months of 2000. Gaylord Entertainment said that contributed to its own negative operating cash flow of $10.9 million for the period.
The hotel and entertainment company said it will either close or sell the components of the unit by Dec. 31, and eliminate the positions of 85 Gaylord Digital employees. Gaylord anticipates the conclusion of operations will result in non-recurring charges of about $35 million net of taxes in fourth quarter 2000.
"This action at Gaylord Digital results from our previously announced strategic review and reflects our continuing efforts to focus on our core assets," said Dennis Sullivan, president and chief executive officer. "That review continues, and our over-arching goal is to immediately strengthen the profitability in all areas of our company."
Gaylord said it is in negotiations to divest Gaylord Digital components like e-commerce site Musicforce.com and Internet broadcasting site Lightsource.com. The company said proceeds from transactions concerning those components are not expected to materially affect the non-recurring charges.
As part of its restructuring, Gaylord has created a new organizational structure consisting of two operating groups -- a hospitality and attractions group and a music, media and entertainment group.
"For the past year, we operated with three groups -- hospitality and attractions, creative content and interactive media," Sullivan said. "Exiting Gaylord Digital narrows the scope of interactive media, and we believe it makes sense to integrate that group's remaining businesses with creative content."
Gaylord also cut 31 positions in other parts of the company.