Close Magic Mountain? Residents Aren't Thrilled
rc-madness said:
Destroy parks as a means to improve the rest is not only sick logic, it’s a lie.
You see this happen all the time in business. Stores and factories close and employees get laid off when a company hits hard times in an attempt to keep the company solvent.
It's particularly tough when its an industry that trades on nostalgia like amusement parks, when the company feels its time to pull the plug on a property that nearby residents grew up with like Magic Mountain or Astroworld. It's more sad than sick. The nation has seen countless parks come and go.
Unless you know of some way to raise a lot of money and bail the place out, you just have to accept it.
I would love to buy SFMM!
Vincent Greene said:
Way to take what I said out of context! Have you ever heard of corporate raiding? They takeover a troubled company, run it the rest of the way down, and then sell the parts at a profit.
I took nothing out of context. This "corporate raiding" you refer to is not only bad business in this case, it's obviously not what is going on here. If you think it is, then you haven't been paying much attention.
-Nate
Something about how this all went down feels predetermined sometime ago. Is Shapiro being paid under the table to push this through? Wouldn't be the first time Six Flags management took money to decrease the value of one of their parks. Who knows, but something really stinks about how this is all coming down. No flagship park announces closure months after some big attraction expansion. *** Edited 7/6/2006 12:15:37 AM UTC by rc-madness***
I digress...
No effort to fix the park though Shapiro has stated plainly what it would take; a few more family attractions. He has done nothing of the sort at any park.
Considering this year's CapEx was already decided, set in stone and in some cases those improvements already begun by the time Shapiro took control of SF, how exactly is he responsible for the lack of family attractions/additions?
Sometimes it's easy to forget that this guy has only been in charge of the train wreck for 7 months.
coasterdude318 said:
Vincent Greene said:
Why is everyone so convinced that Shapiro wants what's best for Six Flags?Because that's how business works. When you're in charge of a publically-traded company, you do what's best for the company or you lose your job. Who else do you think he's really trying to benefit here? It's not like he gets a cut of the check from selling SFMM.
-Nate
That's an oversimplification - when you're in charge of a publicallly-traded company, you do what's best for the shareholders. That isn't necessarily what's best for the company longterm.
For instance, as noted in another thread Shapiro just bought 500,000 shares of SF stock. If he can convince the market that he's saving the company and shares increase $2, he makes a cool million. Then he sells, and where the stock value goes from there isn't his problem any more.
SF is in trouble because the old management went out and bought park after park after park in order to increase market share, and total chainwide attendance. That pleased the stockholders, and the value of stock went up. What didn't increase was the return on dollar investment on the chain as a whole. They traded profitability of the park operation for short-term stock value increases.
For now, five or six parks are for sale. If sold, they'll produce enough money to pay the interest on SF's debt for this year. Next year they'll try to sell five more, then five more the year after that until the whole chain is liquidated, or SF's creditor banks force them into bankruptcy, whichever comes first.
Give it five years, and none of the SF parks will be operating, unless someone actually buys one to operate it.
They're selling to streamline the company and eliminate the dead weight that no longer fits the 'new' corporate profile.
(EDIT - meant in response to the last post on the previous page)
*** Edited 7/6/2006 12:47:13 AM UTC by Lord Gonchar***
rc-madness said:
Whatever you have against the mismanagement of the park, save that frustration for the people making the decisions for the last 10 to 15 years. It's idiotic to say the park is unfixable. That's what Shapiro wants you to believe.Destroy parks as a means to improve the rest is not only sick logic, it’s a lie.
From what I understand of this park, it has almost no flats, and what they have is ancient. Do you know how much the average flat is? Try around $500,000. An advanced flat? Around $2 million and up. A kiddie flat? That'll be another $100,000.
It would take a lot of money to get the park up to speed right as far as to what would qualify as a family park, right? That's money Six Flags doesn't have right now. If they do 'destroy' SFMM (your words, not mine), many other parks may benefit. SFSTl got a 'brand new' attraction out of S.T.O.P., and Shapiro was responsible for its theme. If SFMM was a beloved park that everyone gloats about than I would be as upset as you are.
When I was going through "The American Rollercoaster" by Scott Rutherford recently, it is slightly upsetting to see, for example, the two-page spread of Riverview Park and its seven coasters (of which six are visible). But it's gone, and there's nothing I can do about it, or the other coasters or parks that closed down in the book. Some things are completely out of my control.
Lord Gonchar said:
That only works if you believe the sales are to pay off debt. They're not. (I don't think)
Did you read that in one of their press releases?
The banks have given them a deadline to make this year's payment on the existing debt. They are scrambling to either a) come up with the money or b) have signed contracts that demonstrate when the money will be available.
The only aspect of company profile they're particularly concerned with right now is making sure that it doesn't yet include the word 'bankruptcy'.
The problem they have is NOT profitablility; it's that the amount due on their debt each year exceeds any possible company profit many times over. And the extent of their debt far exceeds the value of their total assets.
They might actually have a chance if they went ahead and filed for Chapter 11 reorganization; based on what they actually own and/or control, they might get some relief from their debts. The bottom line is that their total assets are valued at half or less or their existing debt; they can dance on the knife's edge for a while, but in the end somebody's gonna get cut. *** Edited 7/6/2006 1:09:04 AM UTC by GWHayduke***
Intamin Fan said:
If they do 'destroy' SFMM (your words, not mine), many other parks may benefit.
But not likely; anything they get from selling the park will be dedicated to reducing their debt, not to any improvements to the other parks.
Intamin Fan said:If SFMM was a beloved park that everyone gloats about than I would be as upset as you are.
It's the biggest thrill park on the west coast, which ought to count for something. Look at the southern California alternatives: Disneyland, great for small kids; Knott's, an excellent small park but limited by its size; and Legoland, where you can play with plastic blocks. Understand that losing MM leaves a gaping hole in the SoCal theme park market, one that's not likely to be filled ever again because of the outrageous land values. (When MM was built, it was far out of town on cheap land. To find comparable land today you'd have to go halfway to Las Vegas.)
GWHayduke said:
Did you read that in one of their press releases?
Heh, no. But I'm guessing your info didn't come from one either. :)
Lord Gonchar said:
GWHayduke said:
Did you read that in one of their press releases?Heh, no. But I'm guessing your info didn't come from one either. :)
You can bet you won't hear it from Shapiro - at least not in so many words!
But you can find part of it in this article from the Los Angeles Business Journal:
"The company said it's close to violating terms of $1.04 billion of its loans and is negotiating amendments with its banks. It will boost spending this year by $15 million on top of a $45 million increase already planned to hire staff and lure back customers. The company has about $2.1 billion in debt, owns 3,500 acres of excess land that it's looking to sell, and is hoping to drop debt down to $1.6 billion. Shapiro also told media that the company probably won't meet its earlier forecast of $340 million in earnings before interest, taxes, depreciation and amortization this year."
*** Edited 7/6/2006 1:27:54 AM UTC by GWHayduke***
Unless I've missed something it has nine.
The last new flat the park received was an Intamin Condor added in 1986 if I recall correctly. It was on the infamous ride rotation program and only lasted one year. Yes, folks...twenty years without a new adult flat ride!
Not counting the kiddie flats SFMM has a carousel, rotor, round-up, and bayurn curve that date from the park's opening in 1971. The himalaya, yo-yo, tilt-a-whirl, and swing ship were all added in the late 70s and early 80s. The park's original scramber was damaged by a falling tree recently [2004 or 2005] and was either repaired with new parts or completely replaced.
The park has removed many flats and non-coaster rides including two octopus-type rides, enterprise, looping starship, crazy barrels, skywheel [Intamin ferris wheel similar to one recently removed from Hersheypark], bumper boats, two steam trains, two sky rides, a transportation ride called The Dragon, and a walk-thru house of illusions. The park's original Le Mans Speedway car ride was was moved to a new location, shortened by at least 75%, and received antique cars. And let's not forget the park's monorail still sits SBNO.
An opportunity has arisen for me to visit the park with my sister, her two boys [ages 6 & 8] and my parents tomorrow. Look for a trip report to follow.
*** Edited 7/6/2006 1:31:07 AM UTC by Mamoosh***
Somehow this statement just doesn't ring true...at all. ')
GWHayduke said:
That's an oversimplification - when you're in charge of a publicallly-traded company, you do what's best for the shareholders. That isn't necessarily what's best for the company longterm.
Of course not, but I never said longterm. By your own admission, Six Flags is scrambling to stay together right now. Dumping the necessary improvements into SFMM isn't an option they can afford to take. I'm not sure what else you're trying to recommend (other than filing for Chapter 11). If profits were flowing in from SFMM we wouldn't even be having this conversation. But that's not the case, and there's no sense in keeping a huge drain on your company when you're already up a creek.
For instance, as noted in another thread Shapiro just bought 500,000 shares of SF stock. If he can convince the market that he's saving the company and shares increase $2, he makes a cool million. Then he sells, and where the stock value goes from there isn't his problem any more.
Sure it is, because he's still leading the company, and he's still accountable for where that stock value goes. Sure, he may personally make some money, but running a publically-traded company isn't about toying with its stock so you can make money (personally) off it. That's illegal.
People are running around and screaming as if it's so unfathomable that Six Flags is considering cutting SFMM loose, and that the result of that will be a chain reaction that will eventually lead to every park being sold. Don't forget that SFMM is a unique situation. He's cutting the parks that are hurting the company more than helping it. He's not cutting them just for the sake of doing so.
anything they get from selling the park will be dedicated to reducing their debt, not to any improvements to the other parks.
Except who is going to be interested in buying all of those used coasters? They may be able to sell off one or two of the coasters, but if there's one thing they learned from SFAW, it's that the majority of the industry had little interest in snatching up used rides. I think this management realizes you can't just go several years without adding anything new, and if they're suddenly going to have a whole boatload of free attractions to distribute to their parks, you better believe they're going to jump on that.
-Nate
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