SF Conference Call details - 6 parks may sell
Press release here.
Key points made during the call [thanks Mark!]:
a)Goals reiterated of improving park operations, appearance, and overall brand image.
b)Season pass sales are off slightly as prices increased, but season pass per caps up 10 percent.
c)Discussed how poor the brand image had dropped. New rides opening in June? Not good in Mark's eyes.
d)Season pass sales down 550,000. 62 percent of the total drop (1.3 million) in overall attendance is the 12-17 age group. Parks not acting as babysitters anymore. Increased pricing has attracted more families.
e)Part of the attendance drop from last year is the 220,000 lost from SFNO not being open.
f)Per capita guest spending up 14 percent through June 18.
g)Corporate sponsorships up. Sponsorship revenue (mostly Coke) was $19 million. By end of calendar year 2006, this number projected to reach $29 million.
h)Greatest challenge in company is staffing. Need of better quality seasonal employees. Also need of mid level supervisors and trainers.
i)Too much reliance on foreign student employee program. These workers don't speak fluent english in many cases and are not trained properly.
j)Big rides are easy to market, but guests return because of the "Disney" type experience. Better overall experience. He referred to Hershey and their new dark ride. People aren't going to Hershey for the dark ride. They're going because of the family friendly reputation the park has.
k)$10 million less spent in media/marketing. They are going after the "moms", which cost more to reach. He said he can't market the new six flags when he can't yet deliver the new six flags.
l)Double edge sword with regards to marketing coasters- $88 million spent on four new coasters this year. If you don't market these rides to the teens, you're wasting marketing dollars. By marketing to teens, you're not marketing to Six Flags' new target audience.
m)$3 million over budget on El Toro, and 3 hour waits due to single train op through July. Other late openings- Tatsu at SFMM, Catapult at SFNE, Big Kahuna at SFDL.
n)Beginning Monday June 26 through August 1, a marketing blitz will take place. Television, radio, print. Level of discounts the same, but gate prices are higher.
o)Land of Astroworld was sold for $77 million. Sold assets of Wyandot Lake to Columbus Zoo for $2 million. Finalized lease of Sacramento waterpark and may look to sell the rides back to the park. Closing both Oklahoma City parks. Gurnee, IL and Eureka, MO selling parcels of extra land.
p)Explore options to sell SFDL, Waterworld in Concord, SFEG, Enchanted Parks, Splashtown Houston, SFMM and Hurricane Harbor. Factors: is property in line with stragetic vision, is there value in real estate, has there been interest expressed for the properties?
q)Regarding SFMM: there is strong interest in the marketplace, may not fit in with vision of future of company. It's been marketed as a thrill park, not a family park as Disneyland, Universal, Knotts. Not saying they're selling the park, just that they will move forward discussing inquiries with interested parties.
*** Edited 6/22/2006 10:36:27 PM UTC by Mamoosh***
Haha no I'm not giving Patrick the finger 
*** Edited 6/22/2006 10:41:17 PM UTC by coasterguts***
A day at the park is what you make it!
BigJim4Life said:
Cedar Fair could go for it
I don't think Knott's would be much a factor. The recent Paramount purchase I think would be much more of a consideration.
The stock closed at 7.45/share today. Currently at 6.05 per share in after hours trading.
A day at the park is what you make it!
Maybe someone outside of the typical players of the industry is interested in SFMM? If you're trying to get into the business, it's probably a great starting point. You basically have one of the most impressive shells of a park out there. Buy the place, put a couple of million into the "supporting cast" of the coasters and viola, you have an amazing park to start your company with. Just my 2 cents on that one.
Considering the factors presented, I think I need to get out to visit the parents and get to SFEG next summer if it still exists cause it might be a parking lot by '09 ...
Mr. Shapiro said, "We're investing more in our operations because the health of our business depends on bringing back families. Our first priority is to fix the operation and that is not going to happen overnight. We see this as a long-term investment."
Seems to me like this goal might take quite awhile to achieve - I'm curious if the investors AND Snyder will have that type of patience?
A day at the park is what you make it!
BigJim4Life said:
Wow...sell of SFMM? Wonder who would pick that up.
If Six Flags decides to sell Magic Mountain the park will close. The cost of the real estate alone will make it impossible for someone to turn a profit on this location while operating it as a theme park.
The only way I see a developer making money on this property is to redevelop it into new homes and retail. This is the one park that I feel is a done deal. They are not seeing the kind of revenue on a per square foot basis that makes sense for what the real estate is worth.
In order for Shapiro to rescue Six Flags he is going to have to come up with cash to pay down their debt. One of the best ways is to dispose of some of the parks that sit on vary expensive real estate. I really believe the end of Magic Mountain is near.
Chuck, who sees SF eventually going back to its six core parks.
Oh, BTW, why wasn't SFKK on there!
Chuck
BigJim4Life said:
[...] SFMM? Wonder who would pick that up...Cedar Fair could go for it, but they already have Knott's out there (and isn't that a Cedar Fair property?)
Yeah, it's a good thing Cedar Fair doesn't own three parks in Ohio alone. Wait...
egieszl said:The cost of the real estate alone will make it impossible for someone to turn a profit on this location while operating it as a theme park.
I don't understand this. Maybe the land is valuable, sure, but how does that factor into the profitablity of the park? I mean, it seems like an awful lot of parks out there are sitting on valuable land but that doesn't mean they're not doing just fine. Maybe I'm missing something in the logic.
matt. said:
I don't understand this. Maybe the land is valuable, sure, but how does that factor into the profitablity of the park? I mean, it seems like an awful lot of parks out there are sitting on valuable land but that doesn't mean they're not doing just fine. Maybe I'm missing something in the logic.
The land is certainly an asset in your portfolio and overtime it may increase in value. Of course, considering the fact that real estate has risen for ten years it could be a very risky investment. Will the value remain flat or decrease in the coming years? Many Japanese companies took a major beating in Hawaii when they bought overpriced property and resort hotels in the late 80's - early 90's.
The logic to my statement comes when you take into consideration the value of the real estate in relation to the annual revenues the park will generate. Theme parks typically don't turn big profits, are very expensive to operate and require a lot of capital reinvestment.
- How much do you think 250 acres in Southern California would rent for on a monthly basis?
- How much annual revenue and profit do you think Magic Mountain makes?
The numbers don't add up. For five months out of the year Magic Mountain brings in revenue on a daily basis, but for seven months out of the year revenue only flows in on weekends.
Also, in my opinion and mostly due to Six Flags reputation, Magic Mountain is an under performing property. They reside next to one of the largest population centers in the US and in a climate that would allow year-round daily operation, but the attendance is only a little more than 3 million per year.
Yes, a lot of parks reside on costly real estate, but those parks did not open up yesterday. Many began their operations many years ago. When Magic Mountain opened real estate in Valencia was inexpensive because it was so far away from the majority of the population. That's no longer the case today.
I see Busch as a strong candidate for SFMM, A place they can operate year round and add a new continent to the chain. Perhaps Asia?
I don't think that Busch Gardens is wanting to go back to California....
But that would make them have a powerful park on the West Coast.
P.S. I do like the Asia theme idea. SFMM already has the Samari Sumit theme there.
*** Edited 6/23/2006 12:02:15 AM UTC by Hamster Boy***
Oh, wait, they DID buy PKI... They're talkin' Six Flags here.
I don't exactly get selling off the land for a long-term plan, at SFGAm and SFStL, won't it limit their future once things settle?
Dental Plan! Lisa Needs Braces.
Either that, or liquidate it and disperse the rides among the Six Flags parks. I'd be lying if I said I wouldn't want SFoG to get Scream and X. And finally, SFoMex could ditch their Batman: The SLC and get an actual BTR!
For what it's worth, I suppose Shapiro's doing the right thing for Six Flags as a business, but if I wanted to go to Disney, I'd go to Disney. Six Flags will never be as good at being Disney as Disney is, so they shouldn't abandon the teen/adult market just yet. Catering to families is fine, but not at the expense of the core audience. *** Edited 6/23/2006 12:31:04 AM UTC by Vincent Greene***
Hey it could happen!
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