Continued: Cedar Fair announces Geauga Lake will be water park only
It's really that simple, and it's really that cold-blooded.
More importantly, it's really that fun. :)
BATWING FAN SFA said:
That was IMO the beginning of the end for SFI,and SFWOA/GL in particular & that trend will continue because the parks that go upwards of five years or more with no new ride investments WILL see a decline in attendance as a result.
Does anyone have a clue what he's talking about?;)
Jeff said:
Cedar Fair sure as hell didn't overpay for the property. They'll get that money back, and yet they get to keep the rides (sending them elsewhere) and a water park to operate. Mark my words, the land sales will make back their $145 million.
While I understand what you're saying, I'm certain that Cedar Fair didn't purchase the land to hold onto and sell. Also, it doesn't make sense to me that Six Flags would have sold the park cheaper than what they would've got for the land when the housing market was at its absolute peak, especially when Six Flags was throwing in the towel at a location that simply wasn't working right for them. They could've done that with the same level (or non-level) of uproar as Cedar Fair will "get" from the closure, and probably more since they owned a lot more properties at that time that could've benefited from the "gifts" that GL will be giving.
If Cedar Fair makes $145 million back from the land sale and the small amount of savings that they will gain on the rides that they move, I would still argue it is still a loss, as they held the property for four years. I would expect that they would have made back 5% on the property every year (a *very* realistic expectation), then they actually need to get back about $176.25 million to make it a decent investment.
I don't know if they'll be able to pull that much off. More power to them if they can -- heck, it benefits me so I'm definitely pulling for it -- but it just seems to be a little out of whack for that to occur.
BATWING FAN SFA said:
... that trend will continue because the parks that go upwards of five years or more with no new ride investments WILL see a decline in attendance as a result.
Gee... ummm.. How many SF parks have went that long without a new ride. Um.. Lets see... Um.... How about ZERO. You keep forgetting that SFA added two new water slides and a expanded the Childrens splash area of the water park in 2005. OH! and yes, you were refering to SFA which is only gone two seasons without a new "ride".
A day at the park is what you make it!
So yes, companies should sponsor the local little league teams, make donations to the needy at Christmas time, etc. Should they keep their doors open in the face of mounting losses? Of course not.
Comparing what Cedar Fair "could have" done with Geauga and the Point to what Disney did in California and Florida is ridiculous. In California you can almost toss a baseball from one entry gate to the other. In Florida about the longest drive from park to park is a half hour at most (Magic Kingdom to Animal Kingdom).
I agree with Brother Dave that Kennywood's interest in GL probably waned after Sea World left. As we all know now, Sea World is what likely kept Geauga Lake churning all those years.
The reason government got into the business of setting aside National parks, local parks, nature areas, etc is that no private company was going to do it (actually there are very FEW examples of that occurring) and government realized it was their obligation to do so. Oh, and the one's who DO do soemthing like that usually have an angle. Disney set aside some land near Orlando as they started carving into more of their 28,000 acres. It was a good PR move.
Cedar Fair gives money to charity. They give away a lot of free passes to the needy. They encourage their employees to give to the United Way and provide matching type benefits. Could they do more? Probably. Are they obligated to do so because of some greater good? No.
I work in local government and I can tell you that we are being expected, more and more, to hold our own with budgets. You see more city parks with advertising in them, more communities are subcontracting their work to keep prices (and salaries/benefits) down. You see things like the "Nike Skate Park" and so forth. And, that trend is going to continue. So, the "free gravy train" of government is slowing. I have a mayor who told me once that if he could sell all of the parks, fire stations, police stations, etc and a private company would buy them...he'd do it in a heartbeat. But, that was a pretty safe statement. Who is going to buy them? And, why should they?
I guess it is nice Utopian belief that companies should place others above themselves but that isn't a society we all live in. (Actually, they do place others above themselves...the shareholders.)
Like I said in my previous post, I wasn't associating my statement to any particular instance. I interpreted your statement to mean corporations have no responsibility whatsoever to anyone but investors, yet you just illustrated that's not the case by mentioning how corporations donate money to charities and sponsor local organizations. Therefore I'm inclined to believe that I took your statement the wrong way, or you phrased it in a way that left you wide open for my last post.
I have never said that Cedar Fair should have operated Geauga Lake at a loss for an indefinite period of time. I'm sure I can be quoted as saying that as recently as yesterday and many times before that. My beef has been- and continues to be- an effort on the part of Cedar Fair that didn't seem to recognize an amusement park with a history and a place in the community. I'm not saying that the locals really supported the park as much as they should have but that wasn't only a result of a bad local economy. More than four years of half-assed effort may have turned things around and improved the park to the point where the locals wanted to patronize it again. This has nothing to do with a lack of understanding of the cold aspects of Corporate America and the drive to maximum profitability. I think it has more to do with my general unhappiness that corporations have grown cold. The way I understand it, things were never this extreme.
It happened, but I loathe how things got this way. I loathe the fact that this type of mentality affects the things I enjoy doing and the things that other people enjoy doing.
wahoo skipper said:
Disney set aside some land near Orlando as they started carving into more of their 28,000 acres. It was a good PR move.
It may appear to be a PR move, but they had to. Since they are now encroaching on their federally protected wetlands, they have to "build" wetlands elsewhere in the state (aka mitigating). Since a HUGE portion of their property is wetlands, they're not allowed to build on it otherwise.
Disney has done some of both Tim. They have utilized mitigation to build on property but they have also donated lands without it being a situation of mitigation. Another thing Disney does, or at least the employees of Disney, is the Disney Voluntears program of which I am proud to have played a very small part. Disney shipped supplies down to South Florida after Hurricane Andrew and sent a corps of Vountears. Plus, those Voluntears do a GREAT deal of service hours in the Orlando area that you don't hear much about.
Now, I am all for companies doing that type of thing.
Most of the criticsm I heard Six Flags WoA/Geauga Lake had nothing to do with the physical offerings of the park. Most had to do with the customer service issues, cleanliness, etc. Once Cedar Fair moved in I think those were the issues they tried to tackle first (which requires an investment in people, not things) and, from the limited number of folks who went there, it sounds like they were making headway.
But, how do you market better customer service? "Under New Management" just doesn't cut it. You needed a scorecard to figure out who was running the place in the past decade...and that was "you" meaning enthusiasts. The general public could give a rats a$$ who was running the place.
As much as we heard the complaints about service under Six Flags I think we all (Cedar Fair included) underestimated just how much people were upset by that and how long their memories would be. While most of us tend to see the rationale behind taking out the two coasters, the general public just saw that as the continued poor service at the park. I doubt that throwing in a "family" ride to offset the loss of the coasters would have made much of a difference to the general public.
Obviously, this is a very complex situation and no one answer is going to cut it whether you think Cedar Fair was right or wrong. What is getting lost in all of this, as someone reminded me yesterday, is the people/employees at Geauga Lake who lost their jobs as a result of all of this. I understand there were some offers for relocation and severance packages but I do want to publicly acknowledge those folks who tried to make it work in the face of some pretty bad odds. My heart goes out to you more than anyone else. You put all of your energy into making it work, didn't get paid all that well because you loved so much what you did, and the reward for all that hard work was a pink slip. THAT is the most discouraging situation in all of this.
wahoo skipper said:Try Sawgrass Mills Mall in Sunrise, Florida. And, it is 2nd by a LONG, LONG way. What does that say about our society? You've got me.
It says that people have to shop for things to wear to get around such as shoes, jackets, sweatshirts, and so on. How many people go out in the real world without clothes? Technically, they don't have to go to a mall, but that's were all the clothes are in one spot, and the women love that especially. The mall is also FREE. When amusement parks are FREE, you will see the a whole lot more people going to them.
You have a whole population going to the mall (young and old), but not everyone goes to your typical amusement park unless it's Disney. With Disney, a lot of rides are tame, and thus everyone can ride them. Thus, you can see grandparents riding the rides there. For the lattes, it's a treat to them to drink. I think more women go to Starbucks more than man too.
I don't think there is a way to market better customer service and make it sound convincing. Word-of-mouth is really the only thing that will get that point across, and if no one was willing to give the park a chance then it's understandable things never improved.... but...
Say that Cedar Fair got rid of X-Flight and Steel Venom and replaced them with a Gerstlauer spinning coaster and an interactive darkride- two very family-friendly attractions that can be marketed and wouldn't cost a fortune in the process (not nearly what Cedar Point spends on a new coaster.) People will visit a park with new attractions and that would have been an excellent way to get people back in the gate and show them how much better things are with hopes that they'll leave the park and tell their friends and family. It's not something that would happen instantly, but a steady rebuilding plan is something that Cedar Fair lacked after the first two years.
*** Edited 10/4/2007 1:47:28 PM UTC by Rob Ascough***
By removing rides but replacing them with something else you haven't really put a dent in your total expenses.
My guess is that the original intent was to start emptying out that area of the park to prepare for something else. I don't know what that something would have been. Maybe a karts and coasters type section that could have been open beyond the calendar dates of the amusement park. Maybe a hotel/resort of some sort that would have sat on the lakeside there. I don't know. But, it appears whatever the plan it was set aside after the Paramount purchase. I can't really underscore how important that was to the fate of Geauga Lake.
If the Paramount purchase didn't happen I don't think we would be having this discussion today. I think they would have given it more time.
I realize the park probably needed to cut expenses but I think that replacing two problematic/staff-intensive rides with two more basic/less staff-intensive rides would have been a good compromise. I think it would have been worth a shot. Besides, if CF contemplated the idea of closing the park at some point (which I envision was at least in the back of their minds to some degree), those rides could have been relocated if things didn't turn out, this decreasing the amount of risk involved.
*** Edited 10/4/2007 2:07:51 PM UTC by Rob Ascough***
You couldn't be further from wrong. Look at the balance sheet. The cash flow is enormously positive and they believe they can take out that debt in six to 10 years. With $300+ million in EBITDA, that's not out of the realm of possibility. The company is not going anywhere, and not going to become the next Six Flags (which, by the way, also has not disappeared).
CPrulezohio said:
Jeff, you really think Cedar Fair didn't overpay? They'll get nowhere near $145 million for that property... Dick Kinzel made an enormous mistake overpaying for Geagua lake, and an even bigger one overpaying for the Paramount parks. He has destroyed the company and loaded it with so much debt that it is becoming Six Flags right before our eyes.
Geauga Lake was a bargain. In 2005 dollars, just doing a quick add in my head, the land alone, with no buildings, no rides, was declared as $32 million in the sale. The five newest coasters were worth around $50 million alone. And here's the thing, they still get to keep the Sea World side. All things considered, it's far from a catastrophic loss.
Jeff - Editor - CoasterBuzz.com - My Blog
I will agree with you that it certainly would have shown "effort" in a defined way for the community at large. What we don't know is how bad the financials really were. And, we aren't ever going to know that.
And Jeff is correct, the numbers crunchers are going to be thrilled when all is said and done even if we are disappointed. *** Edited 10/4/2007 2:22:29 PM UTC by wahoo skipper***
There are many bays in the country. Off the top of my head, I'm pressed to think of many peninsulas jutting into a major body of water complete with causeway access and views of water in all directions. The point is that this is a VERY unique piece of property. The type of property that sells itself. Furthermore, there are many ways to utilize prime real estate such as this within the tourism domain...that may not involve amusement rides as the primary focus.
This is just talk about a small possibility. My guess is that Cedar Point's emotional connection to the community is closer to the Cleveland Browns than GL. This would be the primary barrier to changing the land use.
I'm just voicing my opinion that there are possible better ROIs available to such a unique property. As such, I can see arguments made that ROI is not the end all...ala Rob. I also would not be completley shocked if one day I woke up and found that Cedar Point was changing focus...
It only takes one person and/or one idea to promote massive change in today's ever-changing political and commercial environment!
Jeff - Editor - CoasterBuzz.com - My Blog
Closed topic.
