Continued: Cedar Fair announces Geauga Lake will be water park only
As an enthusiast, this fact saddens me...but this is the reality. I'm not convinced that there are not possible scenarios where Cedar Point itself could be better utilized as a condo/mixed use entertainment district.
Year-round profit potentials with less reliance on weather fluctuations serving the entire community...yada yada.
I'm not saying that I endorse the sterilization of entertainment options...that has become the norm. I'm just saying I understand the concept. If I was a Cedar Fair stock owner, I would want them to consider the possibility that a peninsula in Lake Erie is a rather unique holding...one that probably is not reaching is maximum profit potential being used strictly as an amusement park.
Further frustrating the Browns situation was the fact that Modell turned down an opportunity to share a brand new stadium with the Indians, only to turn around later and use that new baseball only stadium as a bargaining chip (and later an excuse) for his own stadium. That can't compare at all to the Geauga Lake situation.
As a unitholder I am more happy with this decision than I am as a lover of amusement parks. Geauga Lake was weighing down the company before the Paramount purchase. That situation was made more dire by the purchase. But, as a unitholder if you asked me whether they should have skipped the opportunity to buy Paramount in order to shore up Geauga Lake or do what they did, I would unequivocally say they made the right decision. The Paramount parks will have a far more reaching impact on the company's bottom line than Geauga Lake ever would.
I absolutely think CF made mistakes with Geagua Lake and, if you really looked into all of those past posts you will find I was one of the first to be critical of those things. But, you have to deal with the here and now. What happened last year or even two years ago is irrelevant to today.
Heck, I had heard that GL numbers were up by mid-season and that some of the powers that be were pretty optimistic at that point. But, things change and the successful companies reevaluate and retool with those changes.
Public parks, libraries, etc aren't businesses. They need not make a profit in order to survive. They are, in effect, subsidized. What has been the results of subsidized amusement parks when those experiments have been tried? Failure. *** Edited 10/3/2007 3:02:05 PM UTC by wahoo skipper***
Why is an amusement park any different from a public park or a library? Or anything that serves as a cornerstone of the community, for that matter?
Rob: that's a good question, and I think the way people answer it provides the foundation for much of the disagreement on this thread.
I think the difference lies strictly in who owns the property. A publicly-owned facility (a park, a library, etc.) exists only to serve the public at a cost that is reasonable. It doesn't need to be profitable. What's more, it doesn't really need to break even; some costs above revenues are acceptable for providing a community service, where acceptable is judged by the members of that community.
Take, for example, Rye Playland. It is a municipal park, and so operates under different rules. The use of that park and land must always consider the welfare of the constituents who collectively pay for it.
Geauga Lake is owned by a private entity. In a capitalist market, that entity can and should do whatever brings the best return on investment. Serving the community plays a role in this process only to the extent to which it eventually brings profit. One could argue that anything less is a disservice to the private owners---the shareholders. The shareholders can decide to value things differently, as, say, Ben&Jerry's shareholders do, but that's the decision made by those shareholders, not some external ethical standard.
It is possible to change the rules on such a property, through eminent domain. The government pays the holder fair market value, and then can put it to use for community good, rather than strict profit.
Where you and I appear to disagree is that you seem believe the company must (or at least should) consider community welfare independent of profit. I do not believe it is necessary.
arw84 said:
OK, I have my one little comment as to how Geauga Lake competed with Cedar Point upon CF's purchase of GL. Since both of these parks are owned by the same company, how can they possibly compete with each other? All the profits (and lack thereof) go back to Cedar Fair in Sandusky regardless of them being parks in the same state. Saying that CP and GL were competing against each other is like saying that the McDonald's across town is competing against the one a couple blocks away. Money is still being sent to McD's HQ in Oak Brook, IL at the end of the day.
We've presented this fact several times but the conspiracy theorists simply refuse to accept,let alone aknowledge it.
I understand that all the profits go to the bottom line of Cedar Fair, but I don't think everything in this situation involves the "bottom line".
For instance, do you think Cedar Fair wants Geauga Lake or Kings Island, for that instance, to be voted "Best Amusement Park in the World" even ONE year in a row?
I don't think they do, which is why KI and GL patrons where concerned from day 1 about the acquisition by CF of their respective parks.
Sometimes, it is more than just about the money...
What color is the sky in your world? Seriously?
And, each park needs to stand on it's own. They aren't going to operate any of their business units at a loss just because the company's overall bottom line is in the black. They would be "more in the black" if an individual park weren't in the red.
Let's look at Castaway Bay as an example. They didn't buy the Radisson to eliminate competition. They bought they Radisson to add to their annual revenue. When the Radisson wasn't meeting their expectations they added the Castaway Bay concept and now, as I understand it, the hotel operates in the black year 'round (though obviously there is room to improve in the winter months).
If Castaway Bay had not succeeded I would absolutely expect they would have sold the hotel or torn it down to make way for something else.
At Cedar Fair, it is rarely, if ever, about more than the money. And, I'm not criticizing Cedar Fair. That can be said for any business. (Or at least any business that isn't on the verge of bankruptcy.)
Ok, one exception to the last statement. Chik-fil-A. They don't operate on Sundays even though they could make more money doing so. It is a model that works for them.
Jeffrey R Smith said:
As an enthusiast, this fact saddens me...but this is the reality. I'm not convinced that there are not possible scenarios where Cedar Point itself could be better utilized as a condo/mixed use entertainment district.
That scenario certainly was contemplated in the late 1950's. The owners of Cedar Point (George Roose and Emile Legros) were essentially forced to drop plans to turn the property into a residential development. There was a very real possibility that the State of Ohio would use eminent domain to take the Cedar Point beach for use as a state park, so they attempted to turn the park into an 'Ohio Disneyland'.
http://en.wikipedia.org/wiki/Cedar_Point
I've been saying that all along. Again, a public company is best off being clear in its intentions. I bring up the Oracle buying PeopleSoft example again.
HAMMER said:
Cedar Fair did NOT shell out $145MM to shut down a competing park. Management's failure to fully realize that the departure of Sea World as an attendance draw doomed any plan turn to around Geauga Lake is costing them money (in revenue, asset write-downs and lost of unit price) and damages their reputation among the investment community.
The dirty little secret there is that even being closed one day, it makes exponentially more than the old restaurant ever did. It's still disgusting. :)
wahoo skipper said:
Ok, one exception to the last statement. Chik-fil-A. They don't operate on Sundays even though they could make more money doing so. It is a model that works for them.
Jeff - Editor - CoasterBuzz.com - My Blog
I will guarantee you that CP will always, ALWAYS receive the record-breaking or ground-breaking coaster/ride.
I am not saying this is a negative thing, I just think CP is the big enchilada for CF. I am sure there are some KI people out there who worry about the same thing.
This is certainly my opinion, but I don't think I am the only one who feels this way.
And also, I was a season passholder for GL, and I visited about 15 times last year, and about 10 times this year. I also raved about GL to my family and coworkers, so I did my part!!
I will guarantee you that CP will always, ALWAYS receive the record-breaking or ground-breaking coaster/ride.I am not saying this is a negative thing, I just think CP is the big enchilada for CF.
This is that distorted cause-and-effect thing that gets cited WAY too often.
You're implying that CP is the big enchilada because it gets the rides.
I'd argue that the truth is CP gets the rides because it's the big enchilada.
See the difference?
Now, I would not be surprised if someday a park like King's Island (maybe KD) took the lead as the #1 Cedar Fair park. Is it likely? No. But, I woudn't rule it out. King's Island has room for growth, has not really got into the resort business and has some large metropolitan areas to draw from (Cincy, Dayton, Columbus, Louisville, Lexington, Indy).
Enthusiasts put a lot more stock into "The Best Amusment Park on the Planet" than Cedar Fair does. Is it a nice accolade? Sure. Does it mean that much more at the admissions gate? Not really.
Brian Noble said:
Where you and I appear to disagree is that you seem believe the company must (or at least should) consider community welfare independent of profit. I do not believe it is necessary.
I'd say that's a fair assessment.
The weird thing is, I don't completely disagree with you. A lot of my opinions about this whole situation have to do with my personal beliefs about how this all went down. Unlike some others, I don't believe a real effort was put forth to reverse the flow of red at Geauga Lake- two years of medicore effort followed by two years of stripping the bones bare doesn't strike me as close to being the best that Cedar Fair could do. People can debate that all they want and I respect their point of view, but no one has come forth that suggests their information is factual or definitive.
If Geauga Lake was losing money year after year, there's no way I'd expect Cedar Fair to keep the park on life support. I'm not an idiot- I know that any part of a business that hemmorages money on a regular basis is best cast aside. However, considering that an amusement park means more- and to more people- than a big box store or a fast food joint leads me to believe that a greater effort would have been doing justice to something that has a functional value and an emotional value. Not to sound morbid, but if you have an old dog that needs surgery to keep it alive, you have two options: put it down, or spend the money with the intent of giving it a chance. From a financial standpoint, it probably makes sense to put the dog down but money is only one factor in that decision. I know someone's going to come out and say that I'm comparing apples to oranges, but to do that is missing the point I'm getting at. It's about addressing the bottom line with respect to those with a financial interest in the company while acknowledging the business they are in and any decisions made are inevitably going to have potential emotional ramifications.
For the sake of this debate, I won't even get into what Cedar Fair should have done when they made this decision, as in giving people one last chance to visit the park, putting into place a plan to relocate the Dipper, etc. I feel we've beat that horse to death, unless someone else has something to add.
Like I said, I see where our differences lie and I also see that we may not be as far apart as you think. Right now I'm more of the mindset that I'd be able to respect this decision a little more if it seemed that Cedar Fair was giving it 100% instead of 50%.
Lord Gonchar said:
You're implying that CP is the big enchilada because it gets the rides.I'd argue that the truth is CP gets the rides because it's the big enchilada.
I'll argue that it's both. Cedar Point gets big rides because it's a major attraction. Yet what is it that made it a major attraction? It's not like Sandusky, OH was a popular tourist destination (or at least a tourist destination of its current magnitude) before rides like Corkscrew, Gemini, Magnum and Millennium Force arrived on the scene.
The chicken, or the egg?
Jeff - Editor - CoasterBuzz.com - My Blog
What do you think KI patrons were saying to themselves after hearing of the CF purchase?
Was it "Oh great! Now we will get some record breaking roller coasters and become the Top Thrill/Theme park in the country", or , "Great, now we can forever be in the shadow of Cedar Point, because we know they are the big enchilada of Cedar Fair, (even if we are not sure exactly how they became the big enchilada)."
I am not saying it is a true assesment, but I think it is how the majority of the coaster/theme park community views the situation.
This is why the GL closing causes raised eyebrows for us GL fans.
Isn't cause/effect irrelevent at this point if we all agree on the same outcome?
No.
You're saying CP is the 'big enchilada' and will remain so because CF puts all the big rides there.
I say the rides get put there because it's the 'big enchilada' and the second it makes more sense to put the big ride somewhere else, it'll go somewhere else. (see Jeff's Wonderland comment)
Don't be surprised if in the next few years CP is forced to share some of it's 'echiladaness' with a couple of other parks.
Closed topic.
