Continued: Cedar Fair announces Geauga Lake will be water park only
I'm not sure what I'd think if there were a podcast with Kinzel and the Board of Directors (ignoring the fact I wouldn't listen to it in the first place.) I suppose it would depend on the answers given. Many business decisions are made with ulterior motives that go unmentioned so I really don't have any reason to believe the business world is a world of truth. What would give Cedar Fair motivation to speak the absolute truth on a podcast, anyway? Maybe I sound overly skeptical but not only do I read about corporate dishonesty all the time, I work in an industry where it runs rampant. I trust the CEO of a large company just as much as I trust a politician... especially when the CEO in question makes a huge purchase of his company's stock days before a major announcement is made that stands the chance of affecting the value of the stock.
halltd:
All of you guys talk about pure business decisions, but then totally overlook the possibility that this was a well laid plan. If they are able to sell the land to a developer for a golf course community or some other use, they're bound to make a pretty penny for the land. Add to that the rides they can inject into their other parks and you've got a really nice deal. That doesn't sound like a "failure" to me.
Agreed. That isn't failure by any stretch and it's a hell of a plan.
I guess I just don't give CF that much credit. :)
Given the way it played out since CF bought the park back in 2004, I just can't see any evidence that points me to believe this was the plan all along. ("We'll string the park along for 4 years and then cash out")
It may have been an exit strategy if things didn't work out (a "plan B" if you will), but I see nothing that says they didn't try to make it work.
And, with as much as Cedar Fair spent on the purchase, why would they not want to at least get something out of it?
I still don't understand why some folks here think Cedar Fair should operate like anything other than a business. This really does sometimes seems like a Disney, "how dare they close the Mad Hatter" type of discussion.
Rob A:
I trust the CEO of a large company just as much as I trust a politician... especially when the CEO in question makes a huge purchase of his company's stock days before a major announcement is made that stands the chance of affecting the value of the stock.
This is another theory that strikes me as funny. All you have to do is look at the numbers to understand that this makes little sense.
He bought 10,000 shares at 24.42. Even if this announcement pushed the stock to the level of it's peak in the past year he'd be making about $6 per share purchased - or $60,000.
Accoring to THIS - Dick Kinzel's annual compensation (salary + bonus) is $2,292,693
Why would he potentially break the law for a profit of less than 3% of his yearly income?
Rob Ascough said:
Actually, I don't even know where the term "conspiracy theory" even entered into the conversation and I regret that it did.
I don't know who said it first, but why is it a problem? This is what a conspiracy theory is by definition.
Rob Ascough said:
(ignoring the fact I wouldn't listen to it in the first place.)
True. Why try to get additional information and insight when that might get in the way of an emotional reaction?
Walt Schmidt - Co-Publisher, PointBuzz
Then, at that point I'm sure they were getting their ducks in a row for the announcement that we all now are familiar with. It is very common for a CEO to purchase shares/units in his company when he is trying to show a stable, "trust us..we know what we are doing.." type of front. It is perfectly legal and there is no conspiracy in that type of a situation.
I think Gonch's statement is valid. Mr Kinzel's move wasn't about making that extra little income for his nest egg.
halltd said:
Ensign isn't local and active on the site?
Gosh, I thought I was! I guess it doesn't count, since Jeff and I don't "know each other by face."
My author website: mgrantroberts.com
Why would I want to listen to the podcast? The site administrators going on about why they're able to think on a higher level than everyone else? No thanks, I won't waste my time. If something is to be discussed, that's what the discussion forum is for.
I never suggested Kinzel stood to make a ton of money, all I'm suggesting is that the two events occured in the right order and very close to one another, and that makes it all a little questionable. If the idea was to increase faith in the company and not make money (not likely), Kinzel picked an odd time to make a statement.
DP would being getting a $14 million something, if they were not getting the relocated ride from GL that will cost them for relocation, rehab and install, still cheaper then new.
Really? They just opened Hydra 3 years ago. Only CP and Knotts (both of which draw twice what Dorney does) get new coasters that frequently. And CF would not have put a coaster the size and cost of Thunderhawk in MiA. MiA's attendance is only 550,000 so it will be pressed to give 300,000 rides a year.
Then there is the decrease seasonal labor cost, decrease in utilities/maintenance cost for closed section of the park, that all adds up to millions a season.
If it adds up to less than $29m per year, CF loses more in revenue than it saves in costs.
Captain Hawkeye said:
But that doesn't change CF's bottom line--the costs of those coasters are still on CF's books.Only at another park, it could act as a shot in the arm for attendance. That was my point.
A valid point. I'm sorry I buried my response to it in my long ramble:
X-Flight does not appear to have helped KI's attendance this year. I doubt that the area around MiA has enough population to significantly increase MiA's attendance. (If GL which draws 150,000 more is too small for Thunderhawk how can MiA be big enough for it?) And do you believe than an Impulse will increase attendance at any park?
But the big coasters do increase OPERATING costs at those parks. CF is probably just shifting the fixed AND variable costs of those 4 coasters. So far, based solely on X-Flight at KI, without increasing attendance. And CF has to replace GL's $29m in revenue just to break even on the deal.
(Yes, I know about the pass thing, but that's my point: moving the coasters to even a park as big as KI has less effect on profit than pass pricing)
Given the way it played out since CF bought the park back in 2004, I just can't see any evidence that points me to believe this was the plan all along. ("We'll string the park along for 4 years and then cash out")It may have been an exit strategy if things didn't work out (a "plan B" if you will), but I see nothing that says they didn't try to make it work.
I agree completely. Otherwise they wouldn't have invested $25m in a new waterpark when they had one already.
If it wasn't the plan from the very beginning (and I still reserve my reasons for suspicion), it was the plan long before it was announced as the plan last Thursday. That affected a lot of people, and I'm not talking about enthusiasts.
I agree completely with that, too.
I said this immediately after his purchase was announced: I suspected there was some "troubling" news coming forward. The quarterly report had been done a week or so prior to his purchase and the news wasn't outstanding.
Actually, that could be the reason for the timing of the purchase: waiting until AFTER the report comes out. If he buys before the report comes out but after he knows what it's going to say, that would be insider trading
This Isn't A Hospital--It's An Insane Asylum!
After Wells died he purchased stock. On the heels of the initial poor performance of Euro Disney he purchased stock.
I'm almost positive Jack Welch did similar things during turbulent years at GE. I've read his book and would have to go back to confirm it but I think his rationale was similar to Eisner's.
Given Dick Kinzel's overall portfolio that $60K or whatever it turns out to be is meaningless. What isn't meaningless...at least I don't think so...is a CEO publicly showing faith in his company in the midst of less-than-stellar news.
That affected a lot of people, and I'm not talking about enthusiasts.
This is what you dont get.
It DIDNT affect a lot of people. If it did, attendance at GL wouldnt be so pathetic.
No.
One.
Went.
Rob Ascough said:
Why would I want to listen to the podcast? The site administrators going on about why they're able to think on a higher level than everyone else?
Ouch. You're killing me, my friend. :)
I like to think we can be rather infotaining...at least within the constraints of talking about the amusement industry.
Especially when we manage to get face-to-face to do them. Last year's BooBuzz show is good fun and full of laughs - still one of my favorites. I'm hoping this week's Fall Affair podcast delivers the same good time.
Plus, it's one of the few places you get Gonch and Jeff on opposite sides of the issue (like last week's pricing discussion).
But then again, if you're looking for love and an outpouring of emotion for fallen rides and parks - the podcast gang probably aren't your go-to guys. :)
I'm well aware of CEOs purchasing stock to show confidence in the company, so I'm not debating the idea behind it. All I'm saying is that the timing was odd, and because I noticed that, I'm sure that other people noticed it as well. If the announcement of the closing of Geauga Lake was supposed to happen last Friday (which it did), why not wait a few weeks until the storm has passed?
As far as Eisner goes, his stock purchases made a lot of sense. After Frank Wells died, I'm sure the stock plummeted. The same thing likely happened when it was announced Euro Disney was swirling around the crapper. Maybe his stock purchases restored some faith in the company but by buying it when it was low, he also made a ton of money.
Rob Ascough said:
Jeff said:
Locals on a Geauga Lake fan site make a better statistical representation?No, but three "locals" on this site or people in your office isn't a better representation. I don't know if there is a way to prove anything, so I don't think assuming that no one aside from enthusiasts care is at all accurate.
I am a local- I live right across the street from the park on East Blvd- lifetime season passholder, enthusiast, etc.- I can't tell you how sad I am- I'm most definitely FAR from indifferent!!!!!
The sharholders of Funtime came to an end to their 'honeymoon' with the park, and decided to not invest anymore serious dollars. They quietly seeked a company to buy them to keep the family intact, which is what Premier did.
Yes, the last few seasons under Funtime gave GL such great attractions as Little Tykes Playground, they still kept the park up, and did not cut promotions.
They took a dilapidated amusement area and created Wyandot Lake, and took Darien Lake to the big leagues. Oh, yes, and Lake Compounce, they were the quiet guys who took the park off of HERCO's hands and kept the place running.
Let's see, as for GL, they added 2 stell loopers when many parks were waiting (including Kennywood) to make a decision, they add Boardwalk Shores, which was first to mix wet/dry rides for 1 price. The centerpiece: the second largest tsunami class pool on Earth.
The Centennial 1998? Instead of building more water stuff, they built the Raging Wolf Bobs. Not only a Dinn/Summers creation, but a remake of the legendary Riverview monster. Not bad for guys who were disgruntled with life in Sandusky.
Did GL fail under Funtime? Not even up for discussion by the industry folks. *** Edited 9/25/2007 5:42:11 PM UTC by Agent Johnson***
A return to a small, picnic type park. Where you could come with your family, bring picnics in for the day, and have a pleasant family experience.
We didn't want the huge, corporate park that just tries to draw in HUGE amounts of people...that usually draws in bad crowds anyway, especially if the ticket prices are low.
GL should have kept downsizing, and just let the park slowly return to a fun, local, family, 1-day picnic park. *** Edited 9/25/2007 5:46:03 PM UTC by Miss J***
The days of family-owned single amusement parks are rapidly coming to a close.
Closed topic.
