Shapiro announces reorg moves at Six Flags

^ Regarding the second part of your post, I think there is an attitude in all business that you don't need industry specific knowledge at the executive level, that the actual operations and management people need that experience. I think all of us who work in front-line or management postitions think that executives need that experience, but a lot of companies don't go that route. I don't agree with that way of thinking, but it has become almost the norm.*** This post was edited by The Lorax 12/30/2005 12:11:49 PM ***

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RGB said:
I think what bothers people here most is that the new regime has come in like a bull in a china shop. Most of their statements sound (to us anyway) that it's not just the way Six Flags was run that was wrong, but the way the entire amusement park industry is being run.

Crap like "not being afraid to reinvent the wheel." Miller came up with pretty good ones 90 years ago. No statements like "we should see what works elsewhere in other successful parks and what we can learn from them." (Although I guess they could never make a statement like that.) It's all "what sponsorship opportunities can we create... brand names... marketability."

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Yes! Yes! Yes! Yes! Yes! :)

It's not stalking if you told me yourself. God forbid I actually recall conversations I had with people.

Lorax, these are excerpts from the Star-Telegram article linked to earlier in the thread...

"Shapiro, who came aboard earlier this month after a bitter takeover battle won by Washington Redskins owner Daniel Snyder, said he liked Quenzel for his ability to market major sports leagues, such as NASCAR, the National Hockey League and Major League Baseball.

Their business isn’t just about televising their games, their business is about using ESPN to build their brands,” Shapiro said."

"These parks are not going to be about building big roller coasters anymore,” he said. "It’s going to be about service and the family experience. It’s going to be about a diversification of entertainment. It’s not just the shows. It’s animals, petting zoos and 3-D movies. Let’s get back to the basics."

As to your statements, yes I know that the NHL was on strike last year. But why didn't ESPN renew the contract with them this year-- according to the article, Quenzel and ESPN were building their brand? So why do they have only a niche audience if Quenzel supposedly did such a great marketing job?

What does this mean for the smaller parks like DL or KK that were "never that popular" and serve only a "niche market?" Will Shapiro and Quenzel decide not to renew their contracts as well?

"Basics" like petting zoos and 3-D movies. Sounds like Coney Island circa 1900 to me.

Shoot them down before they've done anything makes sense.

To say that the rest of the industry is doing just fine is not true.

Paramount Parks seem to take out 2 or more attractions to put in one. Paramount runs PKD like Six Flags ran 5 or more years ago, and worse! so many short staffing signs, rides and attractions not opening til noon or later in the season, coasters running 1 train with 1 lap bar checker regardless of how busy it is. (Even six flags doesn't do that) Cedar Point dropping admission rates and letting seniors in for a song. It's too obvious that these 2 chains have run out of ideas on how to increase attendance. It's too obvious there's a problem industry wide.

I'd say the best thing for six flags (and maybe it's competition) would be to bring in some fresh faces and fresh ideas. Hopefully they'll re-invent six flags and turn the corner to a brighter business outlook.

OK... sit down for this. It might be a shocker. Amusement parks are businesses. Taking out attractions has nothing to do with how profitable the park is. Certainly your experience with PKD doesn't mean the whole chain is struggling. Cedar Point's "problems" aren't all bad either. Unless they drop below 3 million guests there's nothing to worry about. Note the quarterly distribution hasn't gone down. Given the bath they're taking with Geauga Lake, that's pretty amazing.

The industry is in good shape. All parks have cyclical declines in attendance, but it doesn't mean certain doom. There are a finite number of people who can visit a given seasonal park.

I still say fresh eyes and fresh ideas from outside the industry isn't a totally bad thing. they have enough insiders still on the board and at the park level to bounce ideas off to see if their viable. I hope it works well for them

RGB,

First, thanks for including the quotes from the article. I guess I need to be a little less lazy.

I think the NHL was a niche market long before ESPN even existed. Hockey is more of a regional sport. ESPN/ABC did try to market the NHL like it was a major, mainstream league, but I think their willingness to drop it shows their realization that it just isn't that popular.

I do think this strategy will spill over into Six Flags. I think the smaller parks probably will be sold. I don't think that's a bad thing (as long as they remain amusement parks, not a land sale like Astroworld.) Even Cedar Fair has stretched itself a little thin, and you can see a drop in quality at some of their parks. Operating several parks doesn't seem to work that well.

Don't get me wrong, I'm not convinced this is the best thing for Six Flags, but I think the change is a step in the right direction. Hopefully they will continue to visit parks, start talking to customers, and put together a solid strategy. Right now it's PR talk, the "animals and 3-d movies" line seems like he's trying to convince families that the parks are no longer going to be babysitters for teens.

Although, a petting zoo war between Cedar Point and SFMM to see who can have the most goats in a park seems interesting. :-D

With a few exceptions, the industry in general is not in good shape. The amusement business model, in general, is a low margin, high risk business. I have worked in the industry for 13 years, and if I won the lottery, the last thing I would do is build a park.

Rising operating costs, increased regulation, liability, huge labor costs, high cost of capital, and your season is completely dependant on the weather. And now the realization that parks are not as recession proof as once thought.

While the industry certainly isn't going "down the tubes" and is having some growing pains, to say it is in "good shape" is simply incorrect.

Low margin? High risk? Have you even read the balance sheet of Cedar Fair? They're paying $1.84 per unit! Their net income in 2004 was $78 million on $542 million in revenue. That's a solid 14% margin. When did that become low margin in this, the Walmart age? The average for all NASDAQ companies is only 3.1%.

And as for risk, aside from the grossly mismanaged Six Flags, everyone else has been doing well for decades. There have been ups and downs, but aside from Orlando destinations being affected by post-9/11 travel issues, everyone got through that or improved their results during those years.

My observation after being at SFMM yesterday is that the direction the new regime wants to go could work out pretty well. While I don't believe that a petting zoo is a very marketable attraction, the goal to diversify the entertainment options at the parks certainly is welcome.

SFMM was packed, huge lines for the open coasters (and Tatsu's construction closed the obvious areas), and the only entertainment option running was a kid's show. All other venues were closed, sending the crowds into lines for the coasters. So a 3D/4D theater with a decent capacity would more than work at SFMM and really help round out the park as a whole.

The park in general doesn't have too far to go to be a better all ages destination, and here is humble suggestion list if the new regime is reading. 3D/4D theater in space occupied by Flashback, Interactive light gun shooter by Sally, Granny Gran Prix turned into actual themed dark ride for the kids , Mr. Six Pandemonium clone from SFNE, Disk-O coaster from Zamperla, some kind of show in each of the empty venues, and decorate a bit for the holidays, for starters.

" Still, I find it hard to believe that NO ONE in the company right now is an industry person. "

Chuck Hendrix is an industry person, he started with Six Flags as a ride operator and moved up the chain.

I look at it like this....it can't get any worse. Sometimes people who are not in the industry can see the problems, just look at some of us here on the forums. We all know what is wrong with SF, but few of us actually work in the industry. It does not take a rocket scientist to figure out the problems and to give solutions how to fix them. I think this change for SF is just what the doctor ordered!!

sometimes business is business and sometimes it is not. presser didn't know much about the GAP before he left Disney and the chain has steadily declined after a short spike. operating a regional, seasonal company comprised of 30 individual businesses with 30 separate sets of competition is not the same as developing and running the X-Games. this new management team will learn a lot and make a lot of mistakes in the first couple years, but hopefully it will be 2 steps back and 5 forward in a few years.