Rollback on Dorney acquisition...$48M pretty cheap

Tuesday, July 22, 2003 6:35 PM
Have to admit, we've been talking about the cost of a park, and what's this and that worth in terms of dollars lately. Since I first saw the acquisition price, I thought to myself that $48M was a pretty sweet price for Dorney.

Since this kind of stuff is my *gig* so to speak, I'll take a guess at around $69-$72M in terms of current value, since inflation hasn't been a serious consideration for some time...considering Dorney's assets at the time, in terms of infrastructure and rides location and history and land, etc., I'd even say that it's likely been the best of the CF acquisitions profitability-wise. Knott's has certainly made a lot of money for CF, but honestly, their long-term prospects are a little more limited. Wondering if any business types have comments....

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Tuesday, July 22, 2003 6:40 PM
For a second you had me thinking that the new coaster is costing them $48 mil. :) Typical gator. ;)

I have no business experience, but that does sound like an awesome deal.

--Ryan

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"I don't like anyone's balls to roll..." - Koaster King

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Tuesday, July 22, 2003 7:06 PM
Just wandering, but isn`t it supposed to be Wildwater Kingdom with an 'm' on the end of Kingdom and not an 'n' as it appears in the Rollback?

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Coney Island (Cincinnati) ride operator

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Tuesday, July 22, 2003 7:07 PM
Didn't they get Michigan's Adventure for around $12 million? That seems like a bargain if only for the land and a couple of coasters.

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Jeff - Webmaster/Admin - CoasterBuzz.com - Luau II Cam 7/19
DELETED! What time does the water show start?

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Tuesday, July 22, 2003 9:02 PM
Is it a sin to say, I liked the park better before CF bought it?

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Charles Nungester.
It's official Lesourdsville Lake is closed for 2003

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Wednesday, July 23, 2003 4:50 AM
You might have like it before CF but had they not been bought they may not have been around a whole lot longer.

As for profitability, I think it can be assumed that CF knew Dorney had great potential. You need only look at the population within a few hours drive to realize there are millions and millions of people who are in the target audience.

The purchase of Knott's gave Cedar Fair the opportunity to get into year round revenue streams and to pick up a highly visible park on a national scale.

I agree with Jeff that Michigan's Adventure might end up being a steal with that low purchase price.

Perhaps World's of Fun is the most dissapointing acquisition of the bunch.

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Wednesday, July 23, 2003 6:18 AM
Totally agree about the visibility of the Knott's acquisition, and the year-round thing certainly is a boost to CF during their other parks off-seasons. But Knott's has major barriers to future growth...the surrounding neighborhood for one...the other parks in the vicinity for another.

MiA was only $12M....now that is an exceptional bargain. As Jeff said, the land itself has to be fairly valuable. (Condos, anyone? j/k).

But when Dorney added the extra land parcel recently, it just showed that the park has amazing *potential*....and as wahoo mentioned, it's not like they're hurting for a major population center from which to draw guests. If Dorney continues to grow *wisely* (as CF normally does with its parks), then Dorney's outlook is very promising indeed....

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Wednesday, July 23, 2003 9:57 AM
I'm not a business type but... ;)

I think despite the lack of land, Knott's has plenty of opportunity to bring in more guests. I've been there plenty of times when the park had very few people...

Besides, have you seen any of Gonchar's 10x10 coasters? ;)

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"SOME people have NO class!" - Mom from the Whizzer queue

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Wednesday, July 23, 2003 10:35 AM

Is it a sin to say, I liked the park better before CF bought it?

Not at all. Most of the long time locals in Allentown told me that. In general it seems the longer you've been going to Dorney, the less you like the changes. The people that didn't care for the old Dorney, describing it a very "county fair" would probably love it now.


Besides, have you seen any of Gonchar's 10x10 coasters?

Hey! Knott's knows where to get hold of me, if they want to! :)

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www.coasterimage.com
Dorney Park Visits in 2003: 15

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Wednesday, July 23, 2003 10:56 AM
Considering Cedar Fair just shelled out almost $60M for the last three coasters at Cedar Point alone, I feel it's safe to assume that $48M for a park is a pretty reasonable deal... :)

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Just because I have a short attention span doesn't mean I

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Wednesday, July 23, 2003 11:39 AM
"Gonch's Berry Farm--coming to a suburb near you!" ;)

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"SOME people have NO class!" - Mom from the Whizzer queue

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Wednesday, July 23, 2003 1:26 PM
The selling price of any business depends greatly on what is being sold. There's land, improvements, cash in hand, debts, other liabilities, trademarks, and intangibles such as good will and earnings history. A park with a good reputation, good attendance, no debt, and no pending lawsuits included in the sale will bring a high price. Take the same rides and land with a negative image, poor attendance, millions in debt, badly in need of maintenance and improvements, and several lawsuits included in the sale and you will be lucky to give it away. An example of the latter would be Jazzland. (Though I don't know of any lawsuits.) If I recall correctly, SF essentially just took over the park with no real payments to previous owners. How much competion there is for acquiring the park can also effect the sale price.
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Wednesday, July 23, 2003 2:25 PM
Legend_n_Raven said:
For a second you had me thinking that the new coaster is costing them $48 mil. :) Typical gator. ;)

(To Expand on L_n_R's post) Actually, I was quite surprised to see that there was a rollback on Dorney's $48M coaster named aquisition... I didn't even know it was there! ;)

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Just because I have a short attention span doesn't mean I
*** This post was edited by MarimbaGuy87 7/23/2003 6:26:52 PM ***

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Wednesday, July 23, 2003 2:38 PM
alright, that's enough of that.....break it up guys....move along, nothing to see here....;)

In retrospect, proably should have worded it as "Dorney acquisition by CF on rollback", or something at least a *little* better....but from the names I see here, you all were gonna read it just to see what crackpot theory I was gonna throw out THIS time....;)

12M for for MiA....??? Wow, now even out in Muskegon (?), that is really cheap, if for nothing other than the land, infrastructure, and the large market area relatively free from competition. Small wonder CF's stock remains consistently high.

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Wednesday, July 23, 2003 2:42 PM
I knew what ya meant, Bill...but then I've become fluent in Gator ;)

mOOSH

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A random Mooshter's Dawntionary listing: Reintarnation [n.] Coming back to life as a hillbilly.

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Thursday, July 24, 2003 4:38 PM
Umm...someone is wrong. MA was purchased for (at the time) 28.4 million. And growing, since the former owners received stock (of course) instead of cash. If they sold the stock they would get a hefty lump sum, which would be calculated by the ever changing price per share.
*** This post was edited by MIAdvFan 7/24/2003 8:40:29 PM ***
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Thursday, July 24, 2003 4:47 PM
In reality, it's not as much as the price of something, as it is the expected rate of return. For example, if you purchased something that cost $1 million, and were expecting a 10% return, you would net $100,000. Now, say you spent $2 million for something that would generate a 5% return, well that too would be $100,000. In this case, which would you rather buy?

Now, to take it a step further, imagine you purchased the $2 million dollar park but knew, with proper management and some relatively low initial expenses that you could generate 15% return, well now you have $300,000.

It leads to a basic business premise, the higher the cost, the higher the returns, but the higher initial outlay. These factors are only a small part of a decision any business makes when considering acquisitions.

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Fever

I really enjoy the Simpsons. It's just a shame that I am starting to LOOK like Homer.
*** This post was edited by SVLFever 7/24/2003 8:48:10 PM ***

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Thursday, July 24, 2003 5:22 PM
Speaking of the Knott's purchase by Cedar Fair, buying KBF also gave CF the rights to Snoopy (and henceforth Camp Snoopy).

Considering the role Snoopy plays in CP's advertisements and the appeal for families of the Peanut's characters, that had to have been one of the highlights of the deal for CF.

And of course, they were able to put the well-known Knotts name on the various Soak City parks that they now own.

And when you talk about locals, oldtimers in particular not liking whats changed at Dorney, the same goes for Knotts. I do feel that CF has done a wonderful job of preserving the classic feel to Ghost Town at Knott's, despite the drastic changes in other areas of the park.

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The Trip: CP, SFWoA, PKI, KW, HW, IB, SFGAm, MiA and LeSourdsville too.
8 Days- 10 parks. May 2003

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Friday, July 25, 2003 4:36 AM
This is going to tax my memory a little but I believe that buying Knott's didn't automatically give Cedar Fair the rights to Snoopy. I think that the Schultz family had to give approval before the Peanuts characters were used at any of the CF parks.

Actually, it was a bit daring for CF to go that route, jeopardizing the relationship with the Berenstein Bears folks when that was no certainty that Linus was going to kick that ball....so to speak.

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Friday, July 25, 2003 5:26 AM
I don't doubt Cedar Fair had to pay more to license the characters, but whatever exclusivity there might have been with Knott's was at least expanded to include the entire chain.

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Jeff - Webmaster/Admin - CoasterBuzz.com - Luau II Cam 7/19
DELETED! What time does the water show start?

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