Mad Money's Jim Cramer Interviews Mark Shapiro

Monday, January 8, 2007 1:10 AM

Ajrides said:I suggest some of you meet and talk to him in person before you pass judgement.

Aj...those are some of Shapiro BIGGEST supporters posting directly above you.

I'm guardedly optimistic, hanging out in the "wait and see" camp... ;)

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Monday, January 8, 2007 1:39 AM
Obviously, they were skating by on very little money by the end of the season. Like the out-of-control spenders you see on Dr. Phil, the old Six Flags couldn't help but buy two Goliaths, Tatsu, and an El Toro. The unfortunate problem of course is that the new management couldn't take the stuff back or sell it on Ebay to pay down the debt.

I don't know how construction contracts work, but I would imagine that all the parties involved would like to get paid pretty quickly. After watching the Tatsu special, I questioned the price tags that we keep hearing for rides. Was it really twenty-one million (or so) to build, or was that strictly for the blueprints and the steel?

Being that the project went some one-hundred-sixty-two days, I'm thinking that twenty-one million dollars doesn't even come close to the final cost when you factor in equipment rentals, subcontractors, employee costs (probably unionized), the B&M crew etc.

None of those people are going to wait around until Six Flags gets their stuff in gear, so I would imagine that a large part of the revenue winds up back in their hands fairly quickly, and this is why it doesn't pay to build multi-million dollar roller coasters every year.

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Monday, January 8, 2007 9:48 AM
Why not? Maverick is $21 million and that's the entire cost to build the ride.
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Monday, January 8, 2007 4:26 PM
Right.. and there's a ton of theming for Maverick. So those numbers don't sound out of line to me, either.
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Monday, January 8, 2007 9:28 PM
I'm thinking it was $21 million for the purchase of the ride itself....with the construction costs simply being added afterward.

Think about it:one can't easily estimate the exact construction schedule very easily when you have to take such factors as delays in construction due the weather into account.Let's say you have a 2 month deadline to get the ride up & running but you end up encountering snow,or rain for half of that period.You then would have to extend that contract with the construction crew for another month to make up for the first month you lost due to the weather.

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Monday, January 8, 2007 10:58 PM
That doesn't mean that they necessarily get paid for that downtime. It depends on the contract.

When we replaced the roof of our house, we signed a contract ahead of time. If it took them 1 week or 1 month, they got the same money. There was, in fact, rainy weather that delayed the work by 3 days. So it took 3 days longer to get a new roof than expected, but we didn't pay any more.

I realize building a huge steel coaster is different than a roof, but if it were my park and I was having it installed, I'd still make sure the price is not affected by delays, and get that in writing!

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Tuesday, January 9, 2007 1:09 PM
I would think that the cost of a "ride" would be the cost for everything involved to have the ride operational. That would include the structure, track, trains, surveying, clearing, earthwork, foundations, electrical, mechanical, testing... everything. I don't think you get a box of steel from B&M labeled "RIDE" with an asterisk and tiny print saying "some assembly required."

Batwing, they make construction schedules all the time for buildings and highways. They generally allow that there will be some few days when work can't be done because of normal inclement weather conditions. It would be unreasonable of an owner to expect there would be no bad weather over a period of 3-6 months or more. It would be totally foolish of a contractor to sign a contract that didn't allow for it.

That being said, if there are extended delays in a project, most Owners aren't too keen on extending the deadline without some kind of penalty (usually withholding money), because they feel the contract already allowed for some downtime. Contractors will try to make up for the delay by working OT. Not only would they lose money on this job by going past the deadline, which usually is already scheduled. Plus, they risk losing that next job if they aren't ready to start within a certain time frame as well.

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Tuesday, January 9, 2007 1:14 PM

RatherGoodBear said:I don't think you get a box of steel from B&M labeled "RIDE" with an asterisk and tiny print saying "some assembly required."

LOL, very true. That's probably not TOO far off from what the steel fabricators send to the construction site, though... :)

As far as the deadlines and stuff, RGB's explanation is quite good. Some delays are expected, weather is a big one (well, up where yous guys live). Much like a school calendar is set up with the *expectation* of a few snow days, usually the end result is that you get *about* the right amount of work done in the right amount of time....if you don't it'll cost ya... ;)

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Tuesday, January 9, 2007 2:42 PM
The thing that bugs me with the big roller coasters are the places they have put them. El Toro, Goliath at SFOG, and Tatsu shouldn't have been put at those places. I want to see more SFOG, SFGAm's, and so on. I don't want to just see 5 big parks, and the less are never going to get a huge attendance because they have bad roller coasters.

If they would have given those rides to SFKK, SFStL, and SFMW, it would have helped get those other parks off the ground. The Goliath at La Ronde has to go there anyway because they are in contract with them to spend so much money. They are forced to spend so much money at that park.

If Six Flags owned one park, than I would say that you shouldn't spend millions at the small parks. However, this is a much bigger corporation. They have millions that they spend every year for additions. Why not make some smaller parks in which not everyone goes to bigger if you have the funds? Otherwise dump them.

The company is only making a billion a year, and they are losing 600 million just from operations and administrative people. They have other costs like debt, and improvements every year. They have too many small parks (junky parks) that not that many people are going to. I would say to sell 15 of them out of 30.

Sell or try to get rid of with all your heart:
Six Flags Kentucky Kingdom (Contract, but??)
Six Flags Fiesta Texas
Laronde (Contract, but??)
Six Flags Darien Lake (Trying To Sell)
Great Escape
Six Flags New Orleans (Contract)
Six Flags Elitch Gardens (Trying To Sell)
Frontier City (Selling or Sold?)
White Water Bay (Selling or Sold?)
Wild Waves and Enchanted Village (Trying to Sell)
Two Waterparks in California (Trying to Sell)
American Adventures
Six Flags Mexico
Six Flags Splashtown

Load the rest with goodies, and you will be in perfect business. You still have 15, or 14 left.

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Tuesday, January 9, 2007 2:58 PM

The thing that bugs me with the big roller coasters are the places they have put them. El Toro, Goliath at SFOG, and Tatsu shouldn't have been put at those places. I want to see more SFOG, SFGAm's, and so on. I don't want to just see 5 big parks, and the less are never going to get a huge attendance because they have bad roller coasters.

If they would have given those rides to SFKK, SFStL, and SFMW, it would have helped get those other parks off the ground.


You have it exactly backwards.

Coasters don't make parks 'big' - big parks get coasters.

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Tuesday, January 9, 2007 3:24 PM

Lord Gonchar said: You have it exactly backwards.

Coasters don't make parks 'big' - big parks get coasters.


^ Are you trying to tell me that if Frontier City or Great Escape had been "given" Tatsu, that they STILL wouldn't have broken 3M attendance?? ... ;)

Seriously, NYC, LA, Chicago...they are HUGE markets...if you can get even a small percentage of the people that live there to GO to the parks, you're making money hand over fist - money to PAY OFF said ride.

No way would one of the so-called "small parks" EVER be able to pay off a $25M giant like Ka or Tatsu...just not happening.

*** Edited 1/9/2007 8:29:33 PM UTC by rollergator***

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Tuesday, January 9, 2007 3:34 PM
Thanks for explaining in more detail. I just don't have the patience much anymore. :)
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Tuesday, January 9, 2007 11:58 PM
Tonight's guest on "The Report" with Stephen Colbert....Jim Cramer.

The world definitely works in cycles...LOL! :)

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Wednesday, January 10, 2007 12:28 AM
^^^ (and to all others) Then why not just build smaller coasters, yet still with a pretty big impact on the market? Build unique coasters with smaller prints (and smaller costs)...build great flats...a few Eurofighters would be great at smaller Six Flags parks...
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Wednesday, January 10, 2007 12:42 AM
^ I agree. People just look forward to seeing something new. It doesn't have to be a $25 million mega coaster. Just something new that makes you want to go back each year. The problem is when you're Cedar Point and you build TTD, there's a pressure to try to out do it with something even bigger.
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Wednesday, January 10, 2007 12:47 AM

BigJim4Life said:
^^^ (and to all others) Then why not just build smaller coasters, yet still with a pretty big impact on the market? ...a few Eurofighters would be great at smaller Six Flags parks...

For all the same reason you don't build a Eurofighter in your backyard.

Mostly, the lack of cash to do so and secondly, the inability to turn a profit off of the purchase/installation.

Let's face it, none of us are going to go into financial oblivion just so the rest of us have a cool new coaster to ride. Why would we expect a park to do the same?

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