Six Flags posts $1.6 billion loss for 2025

super7*:

About six years ago, they used to count their season pass revenue over the first five visits so anything after that was considered zero revenue. If that’s still the case, then in their shortsighted minds, they were viewing all those season passholder visits at the holiday events as zero revenue visits. Which absolutely isn’t true because the revenue should be spread over all the visits that one person makes

Making my head hurt because by November nobody gives a @@@@ about unamortized pass revenue. . If they already amortized the Season Pass revenue earlier in the year, it has zero impact if they cut Winterfest. That cash was received and blown, it matters not whether you should have booked some revenue in December. (Yes in a perfect world you’d book revenue ratably over actual days used, but after 5/6 visits you’re talking about single dollars).

the calculus was/is “do winter events bring in more cash than you spend” and “how many season passes won’t get bought over winter and all next season if we cancel the winter event”.

Unless you’re saying that they normally book some of that new Fall pass purchase as revenue days (1 of 5 or 6), (2 of 5 or 6), etc., and thus new pass purchases (from Labor Day through Xmas) didn’t get any revenue recognized in Q4 because they were sitting under the Xmas tree and not yet activated?

if that were the case, they would have said that (huge amount of deferred revenue normally recogízed in Q4 now sitting on the balance sheet ready to hit the P&L in Q2). Yeah, that ain’t it.

So do they count meal plans the same way from revenue? After X number of meals they just don’t count them anymore as revenue? I’ve always wondered how they account for meal plans. I always found it interesting that the registers (at least at CF parks) range up the full price then zero-ed it out. Same with all-season drinks.

From Six Flags annual report:

Revenues from multi-use products, including season-long products for admission, dining, beverage and other products, as well as the
first 12-month period for membership products, are recognized over the estimated number of uses expected for each type of product. The estimated number of uses is reviewed and may be updated periodically during the operating season prior to the ticket or product expiration. The number of uses is estimated based on historical usage adjusted for current period trends. Membership products beginning with the 13th month following purchase are recognized straight-line. For any bundled products that include multiple performance obligations, revenue is allocated using the retail price of each distinct performance obligation and any inherent discounts are allocated based on the gross margin and expected redemption of each performance obligation. The Combined Company does not typically provide for refunds or returns.

ShaneDenmark:

the registers (at least at CF parks) range up the full price then zero-ed it out.

At KI they ring up a price that's around 75% of the real price then zero it out, same with drinks. There's a meal plan SKU they use. An $18 meal plus drink at Brewhouse rings up around $13 and $2 before the zeroing. Any accounting theories why they're doing that?

The $13 on the receipt is the approximate dispersion of what they account for per meal use. That value changes throughout the year to get the most accurate accounting possible.

But here’s the real story: A $99 meal pass, divided by $13 is about 7.6 meals per person for the season, requiring 3.8 visits at a minimum. So the park expects dining plan holders to visit less than 4 times. Passholders without a dinning plan visit less, closer to the 2-3 visit range.

But it can get way deeper than that. The actual cost to the park for the meal may only be $5.00. Which would mean that to truly lose money, the holder may have to eat 20x (ish.) And since the meal is "free," maybe they'll splurge on that $6 brownie or cookie that they otherwise wouldn't have bought. Or add the guac. Or have a beer. Or Maverick?

You also have the harder to measure value of having the plan holders in the food line, or eating at a table. When the venue looks busy, people planning on doing a pretzel for dinner may see it and say "Wow, lots of people in there, must be good," and decide to try a meal instead.

Of course, what really cracks me up is entering the park on a 6pm-12am day and seeing people lined up at Backbeat for easily an hour.

CreditWh0re:

how many $20 an hour employees are going to shuttle between two parks because of flexibility?

I only suggested it because I heard stories from my Uncles that they worked at Geauga Lake, and a couple of times got moved to Cedar Point temporarily. I could be misremembering what exactly they said, but I do know one of them mentioned helping an Evac on Magnum in 2005.

Tommytheduck:

Of course, what really cracks me up is entering the park on a 6pm-12am day and seeing people lined up at Backbeat for easily an hour.

The meal plans have created a running of the bulls to the restaurants.

I was long gone before Cedar Fair acquired Geauga Lake, but I could envision a situation where GL employees could have been asked to work at Cedar Point, say for Halloweekends, and have been put up in housing. Less likely the reverse since Geauga Lake didn't have dormitories.

I think that would be the key to any "labor sharing" between parks. What typically happens, and did in the case of Cedar Fair + Paramount + Six is that those acquisitions were explained, in part, by being able to derive efficiencies in back of the house areas such as marketing, sales, purchasing, etc. However, those efficiencies didn't come without a cost themselves, and it does seem to be that we are being told today that, by not respecting the individual cultures/personalities/dynamics of each individual park, they may have inadvertently damaged those parks in the eyes of their target markets.

That certainly happened when Geauga Lake was acquired. Both Cedar Fair and Six thought they could go in and sprinkle their magic dust on that park to make it something bigger and "better" than it was. I think the folks in the greater Cleveland/Akron area just wanted their beloved park to be a periodically improved Geauga Lake that had the heart and soul of the park they grew up with. Cedar Fair and Six offered "New Coke" and "Pepsi Clear". NE Ohio didn't want either.

The first time I had Crystal Pepsi, ironically, was at Geauga Lake.

Crystal Pepsi! That's what it was called. That was the year of clear, of the "Clear Craze". You could get just about anything "clear". Clearly, it was a fad. Can you even find Zima anymore?

Zima had a limited return in 2017-ish, and I bought some to get drunk like a college girl. Remember Clearly Canadian? That's a thing again.

“The meal plans have created a running of the bulls to the restaurants.”

cows yes, bulls, not so much

Alexander James:

I only suggested it because I heard stories from my Uncles that they worked at Geauga Lake, and a couple of times got moved to Cedar Point temporarily. I could be misremembering what exactly they said, but I do know one of them mentioned helping an Evac on Magnum in 2005

Perhaps I was a bit harsh, but those two locations would have made sense at the time, especially midweek in early May, when colleges weren’t out yet.

today, there are no such park pairs that make sense. (Given the rise in international workers, lack of on-site housing etc.) again, CP’s unique dorm setup and proximity to GL would have made sense back in the day.

Speaking of dorms, I’d love to know where things stand with international students willing to come to the USA to work given the state of our politics. They are the lifeblood for getting parks fully staffed.

wahoo skipper:

Clearly, it was a fad.

GoBucks89:

From Six Flags annual report:

Revenues from multi-use products, including season-long products for admission, dining, beverage and other products, as well as the
first 12-month period for membership products, are recognized over the estimated number of uses expected for each type of product. The estimated number of uses is reviewed and may be updated periodically during the operating season prior to the ticket or product expiration. The number of uses is estimated based on historical usage adjusted for current period trends. Membership products beginning with the 13th month following purchase are recognized straight-line. For any bundled products that include multiple performance obligations, revenue is allocated using the retail price of each distinct performance obligation and any inherent discounts are allocated based on the gross margin and expected redemption of each performance obligation. The Combined Company does not typically provide for refunds or returns.

That seems to back up the "counting it over the first X visits" method. A few years ago that number X was 5. It may be more now given how much people seem to use their passes.

From an accounting perspective, you want to recognize revenue when its earned (which isn't necessarily when you are paid for it). And you also want to match expenses to the revenues the expenses created/supported. In an ideal world, the park would recognize the income from passes over the actual number of uses per pass holder. If you use a pass 10x in a season, 1/10th of the cost of the pass would be recognized as revenue each time you visit. And if I use a pass 5x a season, 1/5th of the cost of the pass would be recognized each time I visit. But that's too involved in terms of accounting. Plus people do not know how many times they will use a pass until the season is over. By the time the season is over, you have already released quarterly financial statements that would need to be adjusted.

So, parks go with the average number of expected uses in a season. For some pass holders, 100% of the revenue from a pass will be recognized in the first quarter the park is opened (for some, it will be fully recognized in the first couple weeks of operation). And for other pass holders, 100% of pass revenue won't be recognized until the end of the season (they do not use their passes the average number of expected times in a season). If they visit say 2x in a given season (and the average expected use is 5x), the park will recognize 3 uses of the pass a revenue when the season is over.

If you sell 1 million passes at $100/pass, you will recognize $100 million in revenue for that season (ignoring the impact of passes sold toward the end of one season that are good for the remainder of that season and for the next season as well--for renewals I would expect they do not recognize any of that revenue until the following season but not sure how they account for new pass holders). Just a question of how you account for it and timing for recognition. They could recognize 1/4th of pass cost per quarter. But the seasonal parks aren't open in the 1st quarter and are only open 1 month of the 4th quarter. With 3rd quarter being prime operating season. So recognizing pass revenue equally over the 4 quarters in a year wouldn't be consistent with the realities of the operating season.

We have talked in the past here about how average usage is likely much lower than what many here believe. On average, expect people actively posting on a coaster site would be higher users than your average bear. Though I know that of the 25-30 season passes I have held for Cedar Point (either just for CP or one that covers other parks in chain as well), its rare the season I have visited 5x. With most being 2-3x. And a few were one visit. Don't think I ever bought a pass and didn't use it at least 1x.

It would be complicated for them to recognize the revenue over each visit of the pass. That would have to be done after the pass expires (in the case of season passes after December) and the entire year of financials would have to be restated. That would be a complicated process not only going back and restating financials but also just because of the large number of passes.

So its understandable why they count the revenue over an average number of visits. However, it doesn't give an accurate profitability for each operating day. I just believe as short-sighted as they have been about cost cutting at the cost of the guest experience, they probably have been as short-sighted as well about the holiday events since in most cases they have stopped counting pass revenue by that point...

Guys you’re over thinking it. Yes, GAAP requires a best effort attempt to match revenue and expenses, and the best way is to know exactly how many times Jim Bob will use his pass, and when, and allocate that revenue to those exact days (months/quarters/SEASONS).

They don’t have that perfect information and they won’t, so give up. By the time Thanksgiving rolls around I’m guessing that season pass holders have hit 2-3, or 10 uses. Even if you have perfect information, you’re talking about allocating 1/3, 1/4, or 1/11th of pass revenue to that new winter visit. We’re talking not zero, but damn near meaningless dollars when stacked against the binary Yes/No decision to have winterfest.

In my mind the easy analysis, which we all assumed they HAD done, was do you bring in enough new cash (food/skate rental/beverage/cookies/Igloo rental/ parking and incremental gate) to offset the event AND then figure out (subtract) if there’s a population of folks who won’t buy a pass for the next season November current year to December next year) if you fail to have a meaningful winter event. Ignore same season pass revenue that is unearned at that point. If you don’t open the gates in November ALL of the unearned revenue at 10/31 becomes earned (though unused at the gate) in Nov-Dec’s financials.

I suspect, though have no evidence beyond anecdotes, that the lame @ss attempt at a daytime Xmas event at Carowinds just antagonized everyone and failed to bring in volumes and new cash. That is specifically what they mean when they talk about re-evaluating winter events. I’m sure (well at least we hope, because how could they be so dumb if not) that they knew what the incremental cash inflow or outflow was for KD/GA/SFNE/SFoG’s events were and that’s why they cancelled them. It may well have been that they were just short on cash and couldn’t take the risk of hosting money losing events at several parks that were “marginal”, and so they took that risk of not losing cash when they might not have been realistically able to afford it. (That’s a hypothesis, that someone else raised up thread). There is a good chance that without that refinancing finalized, advisors or internals were saying “you can’t spend a dime more than essentials (see Capex deferrals) until we get that new money”.

Now that they’ve got breathing room, and convinced of their own abilities to improve results at legacy SF, they’re admitting (in advance) that the winter events may come back (albeit with a sharper pencil and an eye on profitability).