Reuters reports that Cedar Fair and Six Flags are in merger talks

That sounds, interesting...

I don't see how it helps either company.

I see how it helps me though.

Ouimet's very abrupt departure from the Board - 12 weeks after signing on to another 3 year term - is starting to make more sense.

If anything, this will accelerate the continued decline of the park experience and quality for Cedar Fair parks that started under Tim Fisher's gutting of the parks a few years ago.

Also from a branding and marketing perspective, Cedar Fair for the last decade has leaned heavily into strong, local brands and playing up their heritage. Six Flags parks is a single low-quality brand with no local differnatation. I'd much rather see a SEAS/FUN merger than FUN/SIX. Very disappointing.

We should know more tomorrow - Cedar Fair releases 2023 Q3 results. I suspect both FUN and SIX's Q3 report will be much softer than expected.

Quick, somebody win the lottery so we can buy and save Cedar Point from this disaster in the making!

This would be a disaster. Neither company does an outstanding job managing parks currently with Six Flags doing it on the poor side. Bigger usually leads to lower quality management.

We have seen how SF trashes a park after they take mgmt and how CF neglects their lower tier parks. So it would be a lot more of that.

With both chains foolishly depending and cheap season passes and offering season diming, combing all-park passes between the two chains just ends in lost revenue that probably won’t be made up with increased sales

The Geauga Lake/Sea World merger of just 2 parks is a textbook case of how something too big can’t be well managed and how combining 2 revenue flows fails This seems like it would be a giant version if that

Jeff:

I don't see how it helps either company.

That was my thought. I don't know who the winner in this would be. The small percentage of season pass holders that travel to use them?

1) Kicks the succession planning can down the road. Both Zimmerman and Fisher are 63. There is no apparent, obvious succession plan for the CEO role unless they went CFO route. Honestly, this reminds me a little bit of Kinzel who was supposed to retire in 2007 extend his contract another 4 years to 2011 after the 2006 Paramount acquisition. Ouimet developed other leaders and a succession plan, and let I’d argue prematurely. Zimmerman and especially Fisher won’t.

2) If future results are projected to be softer than initially thought for either SIX or FUN, this merger buys another couple years until there are serious questions about strategy and execution.

Jeff:

I don't see how it helps either company.

That's what I'm wondering. Both of them are large enough on their own that wouldn't think economies of scale would bring much of a benefit. Elimination of a few C-suite positions would be the only benefit, but I'm sure they will get such big parachutes that it won't help investors. But I can't wait for the talk of "synergies" and "value creation" and all that corporate BS. Seems like likely result is good people from each company end up leaving because they don't want to take marching orders from new corporate overlords or the same corporate overlords, but now with inflated egos.

It just reminds me a lot of the Sprint/Nextel merger (I worked for them) Sure, both were cell phone companies, but they had different cultures, technologies, approaches, and customer bases. The merger ultimately failed because it just didn’t make sense.

Cedar Fair and Six Flags are so different from each other in approach, pricing, and culture. Would this be a true merger or one chain taking over the other? But I have to admit, I’m bias…I don’t want Six Flag influencing Cedar Fair parks because I don’t exactly see it improving things.

super7*:

We have seen how SF is a lower quality product than it should be and how CF manages their lower tier parks in a way that makes sense for their market/attendance figures.

Fixed that for you

Jephry:

I don’t want Six Flags influencing Cedar Fair parks because I don’t exactly see it improving things.

I agree with this. Cedar Fair is far from perfect, but I feel they offer a product that is not even comparable to Six Flags. There are a few Six Flags parks with great ride collections that I would love to see operated by an operator focused on higher quality and a better experience. Magic Mountain, Great America and Great Adventure immediately come to mind. But the thought of Six Flags Over Sandusky or Six Flags Kings Island makes me genuinely sad.

As I have said elsewhere, unless this is FUN proposing to buy out SIX (which I seriously doubt, although the math suggests either FUN is seriously over-valued or SIX is seriously under-valued...or SIX just isn't worth that much...) then I predict that this is little more than either or both companies grandstanding before their earnings reports. For SIX to purchase FUN, that's simply Knott going to happen. Just as it didn't happen before.

I could see FUN agreeing to buy a few SIX parks outright, especially if they can get a really good deal on them. Darien Lake, The Great Escape, Frontier City, and Discovery Kingdom: The New Six Flags Marine World Africa USA Theme Park are all targets I can think of off-hand that for various reasons might make sense for FUN to explore. Particularly Discovery Kingdom if they really want to keep a presence in that part of California after they shed Great America.

--Dave Althoff, Jr.

WSJ is reporting... something. I don't know what because pay wall. If NYT has anything I can gift that article. But I don't think WSJ would publish based solely on rumors.

Chicago07:

Ouimet's very abrupt departure from the Board - 12 weeks after signing on to another 3 year term - is starting to make more sense.

Yeah, this really sticks out now. His whole career was about building value by improving and growing the product. Cedar Fair, DVC, DCL, and I think some credit him with getting California Adventure at least headed in the right direction. A merger like this doesn't feel like a strategic improvement for the company, it just feels like a transaction. He once told me not to chase money, and while he meant that in the career development sense, I think that might have applied to his product-first approach to the parks. He fixed a lot of what wasn't working after the Paramount acquisition, by empowering people, figuring out the gaps, understanding what was and wasn't appealing to guests. You do that, and the money comes.

Isn’t both companies in way too much debt to do this? This makes zero sense.

No, you just combine the debt. Then presumably for every unit of FUN you get x shares of the new company, and y shares for every share of SIX.

But then you have to integrate the parks and combine two very different cooperate structures. I don’t see how the new company will cut much costs, not to mention have multiple areas where they compete with themselves.

Well WSJ is reporting it’s official.

• SIX shareholders will receive 0.58 shares of common stock in new company
• FUN unitholders will receive 1.0 shares of common stock in new company
• Retaining Six Flags name
• Headquartered in Charlotte NC
• Richard Zimmerman will be CEO
• Both companies 6 seats on 12 person board
• $3.5 billion combined market value

Only positive to transaction the companies are mentioning is “greater scale to compete with and fend off national competitors” whatever the hell that means. Disney and Universal weren’t coming after SIX or FUN

SIX is valued at 58% of FUN in the transaction yet they are getting equal representation on the combined Board and retaining the Six Flags name. FUN gets to keep 63 year old Zimmerman as CEO (and presumably Fisher as COO), finally gets Zimmerman’s long wanted headquarters in Charlotte and gets to combine with lower quality parks and take on their name. This seems like a deal for Zimmerman’s ego. Not FUN shareholders.

Disappointing all around. Sadly makes sense why Ouimet left the Board.

Don't need the Journal, there was a press release...

https://coasterbuzz.com/For...ual-merger