Red Zone says consent solicitation is successful, Six Flags responds
Posted Tuesday, November 22, 2005 4:42 PM | Contributed by Jeff
Dan Snyder's Red Zone says that 57% of Six Flags stockholders agree to a board shake up that would replace three board members, including CEO and chair Kieran Burke. Six Flags will use an independent firm to verify the results before any action is taken.
I bet Kieren Burke is sh*tting his pants right now.
It's funny how once Snyder and Red Zone LLC stepped up to the plate, the current board finally (albeit too late) tries to make drastic/immediate changes to its park operations. Even if Snyder loses his bid to take over the board, he would have at least done the rest of us a favor and scared Burke and his henchmen into shaping up and realize their jobs can be at stake for running the company so poorly.
This is not good at all. I agree that Burke is definately not the greatest guy, but Snyder really seems to be worse overall. I never liked Snyder from the beginning, and the more I hear about him, the worse he sounds. He seems like he would put way too many advertisements in the park and detract from the atmosphere.
He seems like he would put way too many advertisements in the park...
That's sort of what I was touching on in this week's podcast. All of the ideas we've heard so far involve bringing in advertising or sponsors or partnering up or outsourcing or whatever.
The one place you never seem to hear them want to get more money from is the customer. No talks of reasonable season passes rather than giveaways, no talks of encouraging repeat visits, no talk of actually fixing Six Flags - just a lot of talk of ways to bring additional revenue to the company from other sources.
Once Red Zone/Snyder grab the reigns, you'll see an influx of money through all the means presented, then investors will be happy, the stock will move and then in a year or three everyone will realize that nothing has changed and we'll all be back to square one.
/\ And what makes you think Snyder and his two wingmen will do any better than Burke in those terms? These men probably haven't visited an amusement park in years and are familiar with only sport event venues. What kind of atmosphere do you think they're familiar with? A rowdy beer drinking, pop corn eating, truck driving atmosphere. If anything, Snyder will cover every open wall and fence in the parks with advertisements if he has his way. That's Snyder atmosphere for you ;).
This is horrible news to me. I can't stand this guy, I think most of his ideas will not work in the amusement park industry. Especially to outsource all the concessions, what is he thinking?! I bet we won't see many major coasters any more, and I can foresee extreme price hikes at the parks. Also, the previously mentioned plastering of advertisements he wants to do is going to kill the park's atmosphere. I just think that this guy isn't going to help any of the company's problems, all the things he wants to address still don't help their poor customer service all he is thinking about is making more money, shareholders. I'm very disappointed in this news, I hope the best for Six Flags though, I also wonder what properties he wants to unload. It's going to be an interesting next few years seeing if he can actually turn things around.
I think this is bad news for Six Flags also. You can bet that if Snyder and his flunkies take control, some of the properties sitting on prime real estate will be sold off for development. I never Liked Snyder's proposals and his wanting to place a real estate developer on the board. I can only wonder how long before houses will be under construction at Six Flags America Estates and people living on Joker's Jinx Way or Superman Ride of Steel Drive?*** This post was edited by Rescue131 11/23/2005 1:45:05 AM ***
That's the problem with Snyder taking over. The latest quote is that he wants to "shed some properties." Several states could be losing their parks if he takes over and begins selling off the land to his real estate developer friends.
The only hope is that whoever did bid for SF takes it over prior to Snyder getting on the board and see the potential that exists at the parks. He is absolultey the last person I want to see run the parks based on his customer hostile ideas which basically boils down to limited capital expansion and raising of price.
This doesn't surprise me. Six Flags has been scared of Dan Snyder from the beginning. They've been extremely defensive. From day one they wouldn't meet with him and when he started to take control of the company Six Flags began sound desperate. Some letters to stockholders sounded very demanding that stockholders not elect Snyder to the board. Everything we've read so far is what Six Flags wants us to hear. I haven't heard one thing anywhere about what Red Zone's plans are from Red Zone. If you ask me, do you really want Six Flags management leading a auction of the company after they sold Geauga Lake at a cheap price to CF. Not to mention the money Burke and Co will walk away with after they sell the company.
I go to Redskins games. The stadium is well staffed with concession vendors, the food is tasty, plenty of security, the staff knows what there jobs are, there are no long lines to get through security at the gate, the stadium and surrounding areas are clean, the bathrooms are clean and don't stink , the toilets work (I don't think I've ever seen an out of order sign or an overflowing toilet in Fedex Field) and to tell you the truth the concessions are not that badly priced, except for beer which is $7.00 for a 20 oz plastic bottle. The high priced beer probably has to do more with keeping indulging fans at bay than Dan Snyder making a profit off it. In fact, a tub of popcorn is cheaper than the movie theatres in the area.
If your hoping for a bail out from another major amusement park company, don't bet on it. The profitable parks might be bought individually but the ones that remain will probably face the wrecking ball. I don't see Blackstone or Dubai Capital snatching up a chain of amusement parks and taking on $2 bil in debt in a extremely competitive environment. One owner or another, some Six Flags parks are going to face a down sizing. The land they sit on is just to valuable. Example, doesn't Six Flags own the Six Flags Mall across from Six Flags over Texas? and isn't it still largely vacant like it was two years ago? Gee, there is some unused land that could be sold for a pretty penny and developed.
For those that think Six Flags America will make out like bandits. Think again. Dan Snyder owns at least one corporate jet (Redskins 1) and a helicopter. I think his day trips to amusement parks are to places like Orlando and Anaheim, CA.
I don't know how the arrangement is for Fed Ex Field where the redskins play, but I can tell you that M & T Bank Stadium here in Baltimore where the Raven's play is owened and operated by the Maryland Stadium Authority. The concessions, cleaning, parking, etc, is all operated by them. I'm sure for their part in having naming rights, M & T Bank pays for and has a say in some of this day to day operations, but the only thing the Raven's have to do with any of it is play their games there and the team owners collect the fees for the naming rights. I would be willing to bet Fed Ex Field has a similar arrangement, so where everyone is giving Snyder credit for running that stadium, I say he probably dosen't deserve the credit.
And Coasterguts, I agree with you. SFA won't be living high off the hog under Snyder's control. I have said this all along. Snyder said a few years ago that he would like a site nearby, but away from Fed Ex Field where overflow parking and tailgating events could be held to include some sort of pavilion where a large screen could be set up to show the games. Take a look at a Metropolitan DC map and see what the proximity of SFA is to Fed Ex Field. Almost fits the bill perfectly. I can see maybe the water park being kept in some fashion, but the truth is the land around SFA has become very valuable.
Nice. I voted for the guy. Of course, my vote was a vote against Burke and not really a vote for Snyder. I'm glad to see Burke and his cronies go. I don't really care all that much what he does with Six Flags since Burke has ruined my park already.
And even if Six Flags were able to complete the sales process unhindered. Burke and his buddies want to stay in charge of the parks (they want a buyer who is interested in keeping them for their "experience"). Can Red Zone find people with enough successful experience? I'd certainly hope so. But I know that Burke is not the answer no matter who owns the company.
BigKirby beat me to it as Burke was into real estate prior to the park biz.
Either way we might be looking at some park closures unfortunately as no chain is gonna want to buy SF as it stands now & maybe some of the closures may benefit the company as that means less overall capital expenditures to worry about no this doesn't mean SFA will become spoiled if Snyder takes control....it may mean a more fairly balanced cap ex program for all the parks instead of what we've seen under Burke & co.'s leadership the last few seasons.
Anything seems better than Burke at this point in time but we'll have to wait & see what happens.
...why is it that time after time, people don't understand that in business you CAN'T have a balanced cap ex program? Not if you want to stay in business. The only exceptions are if the parks themselves are exactly the same size (which they are most definitely not). Bigger parks attract more visitors, and as such need more frequent additions to keep them coming back (well, that and customer service, of course).
If you owned 5 parks, and 2 brought in $10million of profit, and the other 3 brought in $1.6million every year (presumably $25million), would you continue to give each park $5million? No - the smaller 3 parks would continually run several million in the red. That's not good business.