Discovery Zone

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Discovery Zone
Public
Traded asDZ
IndustryFast food and entertainment
FateBankruptcy
SuccessorChuck E. Cheese's
FoundedOctober 1989; 30 years ago (1989-10)
Kansas City, Missouri, U.S.
FounderRonald Matsch
Jim Jorgensen
Dr. David Schoenstadt
Defunct1999 (1999)
Headquarters,
U.S.
Area served
Worldwide
ProductsFamily entertainment centers
OwnerIndependent (1989-1995)
Blockbuster Video (1995-1999)

Discovery Zone (DZ) was a chain of entertainment facilities featuring games and elaborate indoor mazes designed for young children, including roller slides, climbing play structures and ball pits. It also featured arcade games. There was also a talking robot character named Z-Bop, who was the chain's mascot. Other than interacting with the children, there were certain buttons on Z-Bop that they could push, which made different sounds. The chain was founded by Ronald Matsch, Jim Jorgensen and Dr. David Schoenstadt in 1989. The first location was opened in Kansas City, Missouri in October 1989. An early investor and vocal supporter of the company was tennis player Billie Jean King.[1]

Discovery Zone was also notable for being the first corporate sponsor of the PBS children’s program Sesame Street.

History[edit]

Founded in 1990, Discovery Zone grew quickly, opening 15 stores in 18 months.[2] In April 1993, Blockbuster Video invested $10.3 million into Discovery Zone to purchase 21% of the company. And then in June 1993, Discovery Zone raised $55 million more when it went public on NASDAQ.[3] The stock rose 61% in the first day of trading.[3]

Under the leadership of then CEO Don Flynn, in July 1994, Discovery Zone bought 45 Leaps and Bounds stores from McDonald's for $111 million in stock and 57 franchised stores from Blockbuster Video for $91 million in stock bringing the total stores to almost 300. At the same time, Blockbuster bought more shares of Discovery Zone giving it 50.1% of the stock.[4]

Blockbuster Video, then a subsidiary of Viacom, took total management control of Discovery Zone in April 1995.[5] Viacom had plans to cross market Discovery Zone with its other businesses, such as Nickelodeon, Paramount Pictures, and Showtime. By the time Viacom took control of Discovery Zone, the company signed a deal with Saban Entertainment to include characters from the Mighty Morphin Power Rangers television series at the play centers.[6] Discovery Zone had also planned a new family entertainment center to compete against Dave & Buster’s, which was dubbed “Metro Zone”. The new complexes would have included dining, drinking, mini golf and VR games in addition to the indoor playground equipment that Discovery Zone is known for.[7]

Stretched thin by expansion, changes in management tried to save the company; however, Discovery Zone filed for Chapter 11 bankruptcy protection on March 26, 1996 in Wilmington, Delaware with debts of up to $366.8 million.[8]

On June 30, 1999, Elmsford, New York-based Discovery Zone Inc. abruptly closed half of their 'Fun Centers' and were unable to alert those with reserved parties.[9] 13 locations were sold to CEC Entertainment Inc, owner of Chuck E. Cheese's, who attempted to accommodate last minute party reschedulings over the following days.[9]

IPO and merger[edit]

Discovery Zone completed a successful IPO in June 1993 (led by Chris Bellios, Sam Jeremenko and Steven Noe) raising over $50 million. In 1994, Discovery Zone merged its operations with Blockbuster Video and its (now former) parent Viacom. Sumner Redstone managed to shift the assets to Blockbuster and move operations to Chicago. He told numerous college students at the 1995 annual meeting how "solid" an investment this would be. Discovery Zone filed for bankruptcy shortly after.[10]

Slogans[edit]

  • "Funbelievable Fitness For Kids"
  • "Zoned In"
  • "I'm Goin' DZ" / "Where Kids Wanna Be"
  • "You're Either In The Zone, Or You're Not"
  • "Exercise Your Right"
  • "Are You Ready For The New DZ?"
  • "Never The Same Fun Twice" (final slogan)

References[edit]

  1. ^ Anderson, Susan Heller (January 23, 1991). "Chronicle". The New York Times. Retrieved April 28, 2012.
  2. ^ "Discovery Zone".
  3. ^ a b "DISCOVERY ZONE SHARES RISE 61.4% IN FIRST-DAY TRADING". The New York Times. June 5, 1993.
  4. ^ "McDonalds To Unite Play Unit With Discovery Zone". Chicago Tribune. July 19, 1994.
  5. ^ "VIACOM'S BLOCKBUSTER UNIT TO RUN DISCOVERY ZONE". The New York Times. April 18, 1995.
  6. ^ "Viacom Toys With Discovery Zone Strategy : Entertainment: The new owner of the indoor-playground centers seeks to boost profit through repeat business". Los Angeles Times. July 5, 1995. Retrieved August 15, 2019.
  7. ^ "Viacom Toys With Discovery Zone Strategy : Entertainment: The new owner of the indoor-playground centers seeks to boost profit through repeat business". Los Angeles Times. July 5, 1995. Retrieved August 15, 2019.
  8. ^ Mills, Joshua (March 31, 1996). "Diary". The New York Times. Retrieved April 28, 2012.
  9. ^ a b "Discovery Zones out". CNN.
  10. ^ http://investing.businessweek.com/research/stocks/private/snapshot.asp?privcapId=27643 BusinessWeek profile

External links[edit]