Posted Monday, May 17, 2010 11:58 AM | Contributed by Jeff
Cedar Fair is still carrying a big load of debt on its back, and the deal with Apollo Global Management that was supposed to remove that weight collapsed in April. But Cedar Fair executives, who find themselves still running a publicly traded company, say they are moving quickly to fix the problem.
Read more from The Sandusky Register.
I'm glad to hear that Worlds of Fun and Valleyfair are no longer for sale.
The unedited interview also included Kinzel's love for "all things Whitney Houston." Allegedly.
How can you continue to dump money and rollercoasters into Cedar Point when it's clear that the park has plateaued as far as attendance goes and other parks in the chain are entertaining more people than CP. Unless Sandusky becomes the new Dubai, I don't see why how that park can continue on the same growth pattern. I would think a better business model for CP would be to begin REPLACING rides and attractions with new ones instead of adding them.
Last time I checked, most other parks in the chain have a received a coaster more recently than CP.
He may want to stay on past his end date in 2012? I don't believe for one minute that there is no one else capable of doing that job better.
"Some of the possible new options for dealing with the debt include amending the company’s current bank agreement, negotiating a brand new agreement with the banks, issuing more units in the stock market, selling assets or doing a bond offering, Kinzel and Crage said."
Why weren't any of these options considered before selling to Apollo? I'm also not sure why there would be no distribution before the end of 2011, even if-- especially if-- CF has a good year in 2010. What if unitholders decide not to wait that long and start dumping their holdings?
Cedar Fair, even after all this BS, is still a pretty good company. One on one, their parks are hard to beat, and Cedar Point, with their mediocre food service and games without a lot of winners, is one of the best parks in the world.
They have made some questionable decisions, like the Paramount purchase, the Geauga Lake fiasco, and passing on Cypress Gardens. If they could correct any of their past road bumps, and make some industry noise that does not involve a overpriced hyper coaster......
purchase the abandoned Six Flags Astroworld property, and build a park there. That will up the revenues just a bit.
Yes, I know, they have hurt the wallets and egos of many shareholders, but the parks aren't going anywhere.
You had me up until Geauga Lake. But, Cypress Gardens and Astroworld? Seriously?
From what I have seen, CF was pursuing the options that they current are pursuing before Apollo. But the market was lousy for those options at that point. Credit markets are somewhat better now (though by how much depends on who you are asking). From what I have seen, primary reason SF management sided with the senior note holders was because of the uncertainty of the junior note holders' ability to obtain financing needed for their plan. Had the juniors not obtained the financing, the court would have confirmed the senior note holders plan and the results would have been different. At the time the senior plan was proposed, no one knew if the juniors would be able to obtain that financing. There are still a lot of negotiations with CF's lenders ahead to get the deal refinanced or a new deal approved.
Asset sales are not really any more appealing today than there were late last year. And at this point, CF has stopped trying to sell parks. Equity issues are tough because of volatility of the markets.
Faced with the uncertainty, CF decided to negotiate the best deal it could with Apollo and then present that deal to its unitholders. Under normal corporate governance, the board didn't have the option of asking if unitholders would accept a deal at $11.50/unit and then only move forward with the negotiations with Apollo if the answer was yes. If you determine that the sale/merger route is something unitholders may accept and you think its in the best interest of the company to more forward, you need to negotiate the deal and present it for an up/down vote.
They will need to work closely with lenders with respect to the distributions. My guess is lenders won't allow distributions to be restarted until there is a number of good quarters in the books. Many folks are optomistic about 2010 but that is certainly not clear at this point. And depending on the timing of the refinance, CF may be best served by reducing its leverage rather than restoring the distribution.
Agent Johnson said:
Cedar Fair, even after all this BS, is still a pretty good company... They have made some questionable decisions, like the Paramount purchase, the Geauga Lake fiasco, and passing on Cypress Gardens. If they could correct any of their past road bumps, and make some industry noise that does not involve a overpriced hyper coaster...
So there has been no strategic vision, but they're a "pretty good" company. Really? Don't forget throwing crap at the wall to see what sticks, like putting parks on the market to sell, random lawsuits against Santa Clara, trying to sell the company in a panic... yeah, pretty good all around!
Remember the two weeks they tried selling cotton candy for a quarter? Those silly kids.....
Hey, the cotton candy actually lasted the whole season...if you knew where to find it. That failed because it was the wrong product...that much cotton candy made a royal mess. They would have been much better off to sell $0.50 popcorn.
--Dave Althoff, Jr.
No, it failed because dad didn't want it in the first place, but he didn't find out about it until after it was announced. That's what I hear. :)
I don't even really like cotton candy, and I was buying it at a quarter. Even if you only took a few bites and tossed it in the trash, it wasn't as if you'd just spilled your $6 Pepsi.
Couple that with the freshness factor, or lack thereof, when it went back in to $3 bags, and it's just not worth it.
Well, I couldn't spend 2 hours making a complete list of pros and cons. Yes the parks are operated pretty good. However, there are more 'not so competent' decisions.
As for Great America, they should either sell the park, or embrace the stadium. Wasted money to the lawyers. $.25 cotton candy, thats insulting the public, as they raised some other price to compensate. The $6 Pepsi isn't so far off for them. We have a $4 Coca Cola, but ut us a whopping 44oz size, and is embraced, usually for 2 kids to share.
I think offering up Wof F and VF for sale, that sure doesn't bode well for company moral. But, day to day, things seem to work out. Merging with Six Flags, er, also not so good.
About WoF/VF/GA....what kind of message does Kinzel send to those employees, especially the full-time staff, to know they are "expendable?" Even worse, what kind of message does Kinzel send when he fires a park GM and replaces him with his son? And, that son was the only GM to be "protected" with a golden parachute in the Apollo deal.
I am sorry but I believe the man, as CEO, is unethical and COMPLETELY LACKS INTEGRITY which, "allegedly," was his addition to the Cedar Fair cornerstones. He is now a liability to the company just as Eisner/Pressler were to Disney or Burke/Story were to Six Flags. A serious house cleaning of corporate management and board of directors is long past due at Cedar Fair.
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