Carnival Cruise Lines is returning to Mobile, Alabama today. We’re excited about the return of a cruise ship to the historic and beautiful Azalea City, home of America’s first Mardi Gras celebration. (Hey, I’ll bet you thought Mardi Gras started in New Orleans?)
But in the midst of this enthusiasm, a word of caution is in order.
Mobile’s recent history with Carnival has not been financially beneficial. Five years ago Carnival Cruise Lines shafted the City of Mobile for $20 million. After enticing the city to spend over $20 million for a cruise ship terminal facility, Carnival pulled its ship out of Mobile after a short tenure. Carnival abruptly left town without even the good manners of a courtesy notice to city leaders.
It was a “Wham bam, thank you ma’am” without the “thank you.”
Carnival Corporation and PLC (its sister corporation) comprise eleven individual cruise line brands, operating a combined fleet of 96 ships. Brands include Carnival, Cunard, Holland America, Princess, Seabourn and four others.
Carnival Corporation was initially formed in 1972. After achieving its position as one of the world’s most popular cruise lines, the company made an initial public offering of 20% of its common stock in 1987. This provided an influx of capital that allowed the company to begin its expansion through acquisitions. In 1989 its first acquisition was the premium operator Holland America Line. Others quickly followed.
The CEO and owner of controlling interest in Carnival is Micky Arison, son of the founder. Arison was born in Israel of Romanian ancestry and now lives in Miami as an American citizen. Forbes lists him as one of the world’s wealthiest individuals.
In 1988, Carnival Cruise Lines expanded into airlines with the purchase of Pacific Interstate Airlines, which was subsequently renamed Carnival Air Lines. This venture ended ten years later in bankruptcy court with creditors holding the bag.
Micky Arison’s companies are not ideal corporate citizens.
Arison also owns the professional basketball team, Miami Heat. Miami area governments built Arison a $250 million dollar waterfront stadium several years ago in exchange for a rental agreement. At 10 years into the rental contract, thanks to “creative” accounting by Arison, Miami had received no rent for the stadium, according to a columnist for the Miami New Times.
Please Mobile, Alabama leaders, keep your eyes wide open. Don’t give away the keys to the city this time in exchange for a potentially worthless promise from Arison.
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William Bruce works in business mergers and acquisitions. He is an Accredited Business Intermediary and currently serves as president of the American Business Brokers Association. He may be reached at (251) 990-5934 or by email at Will@WilliamBruce.org.