Herschend to acquire Silverwood

Not one word about synergy and savings?

^ they get a bulk discount printing things with the word "wood" in it

They have all the wood now don’t they? There’s no other park (at least in North America) that has wood in the name is there?

It's amazing to me that Six Flags and United are struggling while Hershend is thriving. The blueprint on how to make regional parks print money is right there in front of them and it's just completely ignored.

Then again, it could just be the difference between making decisions that make the company better compared to making decisions to try and create shareholder value every quarter.

Touchdown:

There’s no other park (at least in North America) that has wood in the name is there?

Disney's Hollywood Studios is likely to escape their grasp.

(Also Glenwood Caverns, Universal Studios Hollywood, and a few dinky ones.)

(Also Oaks Amusement Park in Portland. And, ya know, Cedar Point.)

Maybe we are learning from HFE that private vs. public is really the better business model for amusement parks. Being a publicly traded company just seems to ruin everything because of short term, burn and turn, mentality.

We knew that before. When the Busch Parks were Busch Parks they were essentially shielded from the pressures of being a public company because they were drastically overshadowed by the beer business, and important to the Busch family as a PR front and thus run very differently.

This was true for Paramount Parks as well. A former GM back then told me that the directive from Viacom at the time was, "Just don't lose money." It was almost like a marketing expense that was supposed to zero-out at the bottom line.

CoasterDude316:

It's amazing to me that Six Flags and United are struggling while Hershend is thriving.

Just because they are acquiring parks like credits doesn’t mean they are thriving. For all we know they could be over leveraged and they may be biting off more than they can chew. I am concerned by the continued consolidation of the industry.

Touchdown:

We knew that before.

Indeed. Line must go up. The en****tification will continue until moral improves.

^ They took out a $1.1 billion dollar loan to finance all or part of the acquisition of Palace. I didn't think that Herschend was the type of company that ran with a huge debt load so this may be brand new territory for them.

Leverage/debt is incredibly common in a large number of industries. Financial crisis of 08/09 brought that to light. Companies were using lines of credit from lenders to provide liquidity and if lenders couldn't lend, companies can't pay vendors, make payroll, etc. Since that time (until very recently) interest rates were very low by historical standards and companies/people got accustomed/addicted to what was essentially free money. When interest rates rise, leveraged companies/people struggle. And that brings cries to reduce rates (though again, by historical standards -- at least more than the last 15 years or so) interest rates are not high. But at this point, deleveraging isn't easy (or even likely).

Also Disney (a public company) just posted a record 10 billion in operating income from Parks & Experiences (I wish we got the breakdown each quarter for each division inside P&E, but alas) but because of film cost and the dispute with YouTube and cable revenue the stock overall is down and and the biggest loser on the S&P. So being a piece of conglomerate pie has its advantages, but not always.

If Herschend were in a rough place, I don't think this would be happening. We would also hear about cuts to staffing, and there would be reports of poor experiences.