Continued: Cedar Fair announces Geauga Lake will be water park only
But, I agree that Universal's IoA really was a shocker for Disney b/c I think that is the first real park to set the bar higher than anything Disney had. Now, I understand Tokyo DisneySea has that WOW factor as well but I haven't seen it for myself.
IOA surely took them by surprise and I assume that more thrilling rides like Rock 'N' Roller Coaster and Mission: Space were a response to that, as IOA was offering rides of a caliber that Disney didn't have. One of these days I'll have to get over to Japan and check out Disneysea- I hear that place is unbelievable.
Jeff said:
I don't know or care why Six Flags undersold the park. Frankly it doesn't matter because that's the world we live in. It's not 2004. That area has changed dramatically since then.
Jeff, I don't think that the Cedar Fair people are idiots, but I don't think that even the bad management at Six Flags could have been so stupid as to let the land go for pennies on the dollar if they just liquidated it. Have you ever purchased a property? Estimates go back and forth, and the banks that help to finance it figure out what the value should be too.
You honestly believe that the heads of Cedar Fair saw something that all of Six Flags, the banks and everyone else didn't see in the purchase of GL? This is the question that you still haven't answered, while resorting to asking me if I'm "kidding" about thinking that Cedar Fair is stupid. I don't think Cedar Fair is stupid. I just also don't think that they are *that* much of geniuses. If they were, GL would have made them money as a theme park.
Well it would make more sense to you if you'd stop and realize that they thought they could generate the attendance and revenue to pay the property taxes, pay off the financing and generate contribution profit to the company. See previous comments. They didn't just buy the thing on a whim and hope for the best.
But then why not invest in a park further away from the market of one of your biggest parks already? Again, we've established that amusement parks draw from a larger surrounding area. GL is most definitely in the same area as CP. Why wouldn't Cedar Fair try to buy a different Six Flags property that wasn't in their market instead of the one that was?
Again -- if they are going to own two parks within the same range who cater to the same customers, and they are not going to make them compliment each other... why do it to begin with? Families have a limited amount of funds to use. Maybe the closing of SFWoA means that 100,000 people that would have gone there now come to CP. That is a huge boost to Cedar Fair and they need to invest nothing to do it, just wait for Six Flags to flame out. By purchasing the park, they had to invest resources to attempt to bring it up to that level. And how could they realistically do that without drawing attendance away from CP?
I don't get your reasoning here. As you said, they even combined their public relations people. Doesn't that show that these are two parks in the same market?
I've said it over and over, and so have others. Cedar Point was not bleeding customers to Six Flags. None of their decisions were made in response to anything Six Flags did in Geauga County. The first piece of Millennium Force arrived in December 1998. Dragster was prototyped as Xcelerator at Knott's in 2002, with R&D likely starting two years before that. Sure, they may have bought an Impulse because they liked the concept, but it sure wasn't for competition's sake. Again, they weren't bleeding customers to Six Flags.
Now you've got to be kidding. They added an impulse because they liked the concept, but not for competition's sake? Isn't the whole point of owning a business that others are in -- especially in your market -- to compete against them? As I stated before, people do not have unlimited incomes to go to parks. So, if you are a family and you are making your decision to go to a park and one just opened WT, a bigger and better version of that ride you liked last year at SFWoA, wouldn't that factor into your decision?
If you don't believe that the rides were built for competition's sake, why does anyone build roller coasters? Sure, they get a boost in attendance. But not the entire boost in attendance comes out of thin air. A lot comes from attracting groups to a different park.
What answer are you looking for? Yeah, they saw a profitable amusement park business in there. Unfortunately, they didn't account for the changes in environment, namely the loss of SeaWorld.
thecoasterguy said:
You honestly believe that the heads of Cedar Fair saw something that all of Six Flags, the banks and everyone else didn't see in the purchase of GL? This is the question that you still haven't answered...
Um, because Six Flags wasn't selling any other property at the time? And who is to say they didn't approach them about buying other parks? You need a buyer and a seller, you know. "Have you ever purchased a property?" Indeed.
thecoasterguy said:
Why wouldn't Cedar Fair try to buy a different Six Flags property that wasn't in their market instead of the one that was?
They. Didn't. Compete. They weren't the same customers. We've been over this again and again. McDonald's and Outback exist in the same market too, and yet they don't cater to the same customers.
thecoasterguy said:
Again -- if they are going to own two parks within the same range who cater to the same customers, and they are not going to make them compliment each other... why do it to begin with?
Well let me think... they have one of everything pretty much already, and people love roller coasters, so...
They added an impulse because they liked the concept, but not for competition's sake? Isn't the whole point of owning a business that others are in -- especially in your market -- to compete against them?
In what universe? Where is Holiday World or Michigan's Adventure getting their boost in attendance? Five to six hours away from Cedar Point? Sometimes rides are installed just to maintain attendance. Again, you're living in a vacuum and trying to simplify where you can't. That was Cedar Fair's mistake. "Well, we bought parks here and there and boosted attendance and revenue, so we can do it at Geauga Lake too."
If you don't believe that the rides were built for competition's sake, why does anyone build roller coasters? Sure, they get a boost in attendance. But not the entire boost in attendance comes out of thin air. A lot comes from attracting groups to a different park.
What is really the point of your argument? That they intended to sell it all along or that they made a bad decision buying the park? If it's the latter, well no kidding, I think we can all agree on that. If it's the former, you're just wrong. That's not what their business is. Real estate buy-and-flips are so far from their core competency. They certainly didn't do it to make competition disappear (for reasons we've been over time and time again).
Jeff - Editor - CoasterBuzz.com - My Blog
The closing of Geagua Lake is really a conspiracy linked to the Sandusky Muslim population, who are attempting to repurchase the land with the help of Six Flags (if you didnt know, Six Flags indirectly supports terrorism...check the News section).
It is going to be used a Midwestern Al Queda training camp.
Someone should protest this.
thecoasterguy said:
If you don't believe that the rides were built for competition's sake, why does anyone build roller coasters? Sure, they get a boost in attendance. But not the entire boost in attendance comes out of thin air. A lot comes from attracting groups to a different park.
Parks constantly need to add rides and attractions to maintain attendance. While Knoebels will never have to add another ride to keep me coming back, that's not the way it is with most people... or most parks. I'm not going to bring up the whole "Was or was not Geauga Lake competition for Cedar Point?" thing again (I've stated my opinions on that numerous times), but I will admit that Cedar Point didn't really do anything to react to the investment Six Flags made at Geauga Lake. If anything, Cedar Point seemed completely oblivious to what was going on in Aurora.. at least in the area of new rides and park upgrades.
*** Edited 10/5/2007 7:00:08 PM UTC by Rob Ascough***
Thats easy. Kennywood, Geauga and CP in that order :) YMMV and it obviously does on this forum :)
Jeff said:
What answer are you looking for? Yeah, they saw a profitable amusement park business in there. Unfortunately, they didn't account for the changes in environment, namely the loss of SeaWorld.
Your claim has been (correct me if I'm wrong) that they purchased SFWoA at a price that was so good that if it worked as an amusement park great, and if not they would make bundles of money off the sale of it.
My belief is that they are going to be losing money from this, and that if the property would have been so great to sell off initially that Six Flags would have just done it themselves. Additionally, even if CF does not lose money from it, that they will not gain anything close to an acceptable ROI.
If that is your claim, than I am fine with just agreeing to disagree on this point. If not, that is what I need you to clarify.
Um, because Six Flags wasn't selling any other property at the time? And who is to say they didn't approach them about buying other parks? You need a buyer and a seller, you know. "Have you ever purchased a property?" Indeed.
Again, if that is your stance fine. However, if I am Cedar Fair and Six Flags offers me SFWoA and only SFWoA, I think that Cedar Fair could've easily said, "no deal." It didn't seem like anyone else was in the market for it.
In that case, there would be a seller, but no buyer. And wasn't Six Flags in desperate need of cash at the time? Don't buy SFWoA and wait for Six Flags to sell a property that would benefit you instead.
They. Didn't. Compete. They weren't the same customers. We've been over this again and again. McDonald's and Outback exist in the same market too, and yet they don't cater to the same customers.
I think that this is a really crazy argument. While McDonald's and Outback are two different places that cater to two different types of customers, if you eat at McDonald's, you probably will not also eat that meal again that same day at Outback.
That still makes the other place competition. Targeting a different market segment doesn't change the fact that they are both selling a product which accomplishes the same goal.
Well let me think... they have one of everything pretty much already, and people love roller coasters, so...
But they aren't competing against anyone, so they are just building the rides that they would like to go on personally?
In what universe? Where is Holiday World or Michigan's Adventure getting their boost in attendance? Five to six hours away from Cedar Point? Sometimes rides are installed just to maintain attendance. Again, you're living in a vacuum and trying to simplify where you can't. That was Cedar Fair's mistake. "Well, we bought parks here and there and boosted attendance and revenue, so we can do it at Geauga Lake too."
Simplifying was Cedar Fair's mistake?
And there are a lot of things that compete with money for amusement parks. Movies, baseball games, state fairs, National Parks, video games, and so on. It's all part of the entertainment dollar. But, when you take two parks in the same market, even if the parks claim to be looking for different types of people they still are ultimately competing with one another.
And seriously, after the animals were removed from GL, what did it offer that CP didn't? What was the big different market that it was catering toward? I know that GL tried to become a 'family' park, but what did they add that gave them that distinction over CP?
If the only difference was price and they expected to get people to come who wouldn't be willing to pay the price difference to go to CP, then I guess that theoretically, they weren't competing... but then their prices should have been much lower than they were, in my opinion, and they should have lost more of the big rides a lot quicker. By keeping those rides, I don't see a huge difference between the two.
What is really the point of your argument? That they intended to sell it all along or that they made a bad decision buying the park? If it's the latter, well no kidding, I think we can all agree on that. If it's the former, you're just wrong. That's not what their business is. Real estate buy-and-flips are so far from their core competency. They certainly didn't do it to make competition disappear (for reasons we've been over time and time again).
All right, the quick recap:
1) Without trying to complement Cedar Point in any way, I think it was an extremely questionable move to buy GL.
2) Cedar Fair will lose money, or at least show a completely unacceptable ROI, on the sale of GL.
3) Six Flags tried to compete against Cedar Fair in the Cleveland market. I agree that Cedar Fair didn't really do anything outside of their normal business in return, however I think that Six Flags was definitely trying to move in on their marketplace.
Finally, the reason that I joined this thread (and even started paying attention here for the first time in a long time) was because I was curious to hear other people's thoughts on why GL failed like it failed.
Your argument, from what I have understood of it at least, has been that Cedar Fair did everything right except for underestimating the importance of the animal section. Personally, I feel that there was a LOT more that could've been done to attempt to make more money on the property, which is what I've tried to bring up in my posts. You disagree with me on those points it seems.
And from what you make it sound like, you know and have talked with the major players on the side of Cedar Fair in this about this very topic, so maybe they have convinced you because they truly believe that they did everything right in this situation. And maybe they truly did. It is my right as a shareholder however to think about and examine exactly what happened and draw my own conclusions. I haven't heard their reasoning which I'm sure would be very solid about why they did what they did. And I'm sure that my hypothetical ideas weren't raised with them, nor would they have brought them up, so they just sound crazy to someone who has been exposed to the entire thing.
I guess I can go back to lurking, unless I'm wrong in what I said above. It totally makes sense that this would happen, it would explain why you think that all of my ideas are idiotic, and it would also explain why you can't expand on it more. So, unless I'm greatly mistaken, I'll just conclude that I don't think Cedar Fair bought it to buy and flip, but again -- I just cannot understand why Cedar Fair bought it to begin with.
Of course there are all kinds of things that Cedar Fair could have done better, and certainly they have been held accountable for their failure. However, competition was not a motivating factor in buying the park or the decision to close it.
But anyway, regarding your recap:
1) They did try to complement the parks, with a group sales force that pitched the most appropriate one to each client. And don't try to come up with some conspiracy about that, because I know those sales people. Furthermore, they sold the two-park pass even before the Paramount Parks acquisition. There were coupons and such in the marketing materials. They tried to build synergy, and it didn't work.
2) If they lose money, and I'm not convinced they will, it won't be much. The most real damage will be to their reputation on Wall Street, and even then, they've basically not reacted since this announcement.
3) Of course Six Flags was trying to take market share away. No one was ever arguing otherwise. They failed too.
Jeff - Editor - CoasterBuzz.com - My Blog
They had to pay taxes for most of that lake, too, didn't they?
We didn't see any smoke or anything. What's even funnier is, we didn't see any fireman either.
It was sad seeing the go-Carts and Dominator Cars over by the maintenance staging area. The Merry Oldies cars are already gone.
Yes, GL was paying taxes to both Aurora and BAinbridge. SixFlags tried only paying Aurora but that quickly changed. *** Edited 10/8/2007 12:30:44 PM UTC by FLYINGSCOOTER*** *** Edited 10/8/2007 3:43:06 PM UTC by FLYINGSCOOTER***
Great Lakes Brewery Patron...
-Mark
I'd say that firefighters were being trained for coaster evacuations and things of that nature, but the local FD doesn't really have to worry about that anymore!
Jeff - Editor - CoasterBuzz.com - My Blog
I'd rather be in my boat with a drink on the rocks, than in the drink with a boat on the rocks.
Jeff - Editor - CoasterBuzz.com - My Blog
Closed topic.
