Cedar Fair reduces annual distribution to $1.00, wants to sell Valleyfair and Worlds of Fun

I guess I'm going to have to find a way to get to Valleyfair! and WoF this summer. Major bummer.

We all knew the distribution cut was likely, but looking to sell VF and WOF? Both parks, the way I hear it, make their budget numbers, which indicates that they want to sell to reduce debt, not because they're dragging down the company. Great America was sucking ass even when it was a Paramount Park, and with the 49er nonsense, we already knew that was an albatross.

I would have liked to see the distribution cut to zero to pay down even more debt.

With the proposed sale of VF and WOF I think they are in deeper sh*t than they admit, with the 2012 deadline looming on the horizon. Even with 200 million cut off the debt, refinancing in 2012 will be a very dicey proposition.

With the Busch parks up for sale, I think they will have a difficult time selling the two parks as the market is saturated. Selling some assets is a must, but I'm very surprised to see Valleyfair on the chopping block as that park seemed to be a solid performer.

Will Cedar Fair change their name to perhaps Cedar King after the sale of Valleyfair?

Kinzel = In over his head

No surprise on the distribution other than that they cut it less than I thought they would. It likely keeps me from selling my units and maybe that is the strategy.

Selling WoF and Valleyfair (the park Kinzel cut his teeth on)? Well, that is a bit of a shock. I've been to VF once and never to WoF. I don't know what their potential is for growth. The sale to the 49ers seemed a forgone conclusion to me.

CF needs new leadership...and they need to look outside the company. This isn't a statement reacting to this press announcement. I've been saying it for a long time now and this just reaffirms my feelings.

Not Cedar-King,,,,Cedar-Knotts.

Both of those parks they want to dump are 'premium' parks, as in well maintained, many attractions, waterparks, and no deferred maintenance. They will want top dollar, and with Busch Parks on the market, it will be hard for those 2 seasonal parks to get serious takers for at least 6 months.

And another thing, those 2 parks, its not like they have serious competition across the street.

Okay, now I'm officially disturbed. When Cedar Fair is forced to follow the Six Flags model of selling off parks to reduce debt, this cannot in any universe be construed as a good thing. I'm surprised they're not cutting the dividend further.

Pete: I'm not sure the market's saturated. The amusement park industry as a whole fared rather well last year, especially local and regional parks. There's no indication yet that 2008 will prove otherwise, either. This is a time period where, despite one of the worst credit crunches in history, a park like HRP can draw multiple suitors. I suspect players will show up for both those parks, especially if the price is right.

One good thing. The housing and commercial construction markets are getting so hammered, no builder in their right mind will buy these properties to redevelop in the near future. VF and WoF will sell as amusement parks, or fester. Great America, who knows what could happen there.

And... who's going to want to buy those parks?

You don't think Paques Reunidos would be interested?

But yeah, this is a surprise and pretty indicative that things are worse than Cedar Fair has been letting on.

Worlds of Fun just got a big budget inverted B&M a few years ago and is on its way to that wooden coaster so many wanted to see there, and Valleyfair! was one of the originals which is the Fair in Cedar Fair, I didn't see this coming. Great America seemed obvious, but not those other 2 parks. I actually thought GL might have came before those 2.

Wow. I guess I'm not worried though. I don't see the parks being closed. And this could be a good thing for both parks. Worlds of Fun certainly has lost much of its charm since Cedar Fair took over. Too bad Busch isn't up for buying 'em.

It's a conspiracy! Cedar Point bought Valleyfair 30 years ago with intentions to sell it and destroy the competition! Bastards!

or

It's a conspiracy! Cedar Fair bought Worlds of fun 14 years ago with intentions to sell it and destroy the competition! Bastards!

(meh, it's still worthy of a chuckle :) )

If there's one lesson to be learned, it seems to be that slow and steady growth is the only way to go in the industry - both at the company and park levels. Once it all starts moving too fast bad things happen.

Wow, that even more reason now for me to get rid of their stock before there's nothing left at all. YIKES!

"That beautiful season, The Summer! Filled was the air with a dreamy and magical light."

This will probably be Geauga Lake's final season. Oh yea, I said that already.

Come on Dorney Park being sold to Hershey Entertainment!

Ensign Smith, The Six Flags comparison is a little dramatic IMO, Cedar Fair sees an issue down the road because attaining credit at this time is difficult where as Six Flags fell irresponsibly into debt and just kept buying more and more.

Selling off two profitable parks seems like a mistake, but as Agent Johnson mentioned, they are premium parks and will sell at a premium price if anyone wants to buy them.

Cedar Fair picked a horrible time to expand with the Paramount purchase. Not a good idea to take on that much debt right before a recession and banking crisis. Companies with huge debt loads are sweating during this recession. Cutting the distribution was expected and somewhat explains why the company's stock is at a 52-week low. FUN is trading near $6, down from a 52-week high of $25, which is more than the ~45% drop of the S&P 500 during the same period. Kinzel sold ~15% of his shares of FUN a few weeks ago. It's never good when a company's CEO is dumping his stock shares. With the current banking crisis, I would be surprised if CF could find a buyer for VF and WoF. It's hard to find financial backing for such a purchase. With the Busch parks also up for sale, it's hard to imagine who would come up with the capital. I guess I don't see VF or WoF selling anytime soon. Maybe I'm in denial because VF is my home park. The other thing is that VF is on the outskirts of the Twin Cities. I don't see VF being sold off to develop the land for another purpose. There is alot of undeveloped land just sitting around in that part of the city.

The reduction in annual distribution I think we all saw coming, and if anything it's a surprise that they cut it by a little less than half.

Now let me look at a map here for a moment...

(user visits cedarfair.com and looks at the home page)

The only possible reason for singling out Valleyfair! and Worlds of Fun has to be geographic. I've been to both parks, and yes, the parks have some problems. Most notably, Worlds of Fun and Valleyfair! are both in markets where there is really limited potential for growth in attendance, although of the two I think Worlds of Fun has more potential to grow into a regional resort destination along the lines of Cedar Point. The point remains, though...who wants to go to Kansas City?

If it were purely a financial matter, then why wouldn't Michigan's Adventure be on the "for sale" list? Although there may be enough Jourdans on CP's board to prevent that from happening...

I wonder if it isn't that Worlds of Fun and Valleyfair! are not contributing adequately to the company, but having those three parks in the middle of the country makes the whole enterprise that much more difficult and expensive to manage. In any case, I would also expect that Cedar Fair is interested in selling, but is not in any real hurry to do so. Serious inquiries only, and if the price isn't right, don't even bother...

--Dave Althoff, Jr.

sws...if we all had a crystal ball and we could all see the financial crisis coming then a LOT of companies wouldn't be in the situation they face right now. Few people really did see the banking crisis coming. So, let's not pin THAT on Kinzel and the gang.

There is plenty of real stuff to pin on Kinzel.

Dave may be on to something. There is probably a good reason Disney has been lax to expand into the middle of the country. If there is a long term plan to take what exists of Cedar Fair properties after the sale(s) and market them as Regional destinations then maybe Worlds of Fun and VF don't fit into that mold. (Agreed that Michigan's Adventure doesn't really fit there either...and probably Carowinds could be included on that list.)

Does this mean they'll halt construction of Prowler and move it to CP? :)

If these sales go through, I propose we have a Rename Cedar Fair With The Names Of The Remaining Parks contest.

e.g.
Cedar Kings, LP
Carominion, LP
Berry Point, LP
Soak Lake, LP

or perhaps my favorite,
Canada's Great America, LP