Six Flags considers selling more parks.

Monday, January 28, 2008 3:03 PM
Just read this article about SF is thinking about selling more parks and shutting down some rides.

I sent this in for approval in news, but I thought we can get the guessing game going which ones will go.

story *** Edited 1/28/2008 8:04:31 PM UTC by supermandl***

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Monday, January 28, 2008 3:26 PM
Best quote ever:

"Dennis Speigel, president of Cincinnati-based International Theme Park Services Inc., says the debt load is a major issue. Last week he told the Business Journal: 'You could bring back Walt Disney (to run Six Flags) and that company is still going to struggle.'"

Which is something we speculated on way back when...Could SF be saved?

Increasingly, the answer looks like a resounding, "no, it couldn't."

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Monday, January 28, 2008 3:36 PM
Parks that could be sold

SFKK, La Ronda, and SF Mexico. If they are really desperate, they might sell SFMM. SFKK, with the tower incident, has had some bad press and the only good part about that park (to me) is the water park. coasters are jsut Meh.

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Monday, January 28, 2008 3:39 PM
I think it COULD have been saved....but even the timeline for that was before Snyder/Shapiro, etc. The industry needed to *re-vision* itself when the video game market went off the charts. The tendency among enthusiasts is to think of parks as competition for each other...but in reality, the competition comes from OTHER leisure activities...movies, sporting events, State and National Parks, etc.

What is "re-visioning"? Basically, to me it involves tearing apart your entire business model and considering "where do we go from here". SF was hopelessly dedicated to a business model that had aged out. Sticking with that approach for an extra 10-15 years after it had BECOME apparent it wasn't working...that made sure the ship COULDN'T be floated enough to get it into drydock for a major overhaul. I'll be quite surprised if they don't file within the next 12-24 months.

Tragic Mountain is the *paragon* of exactly what SF needed NOT to do as time went on....spending buttload of cash year after year trying in vain to capture the thrillseeking market when all the opportunities to MAKE money had migrated elsewhere...

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Monday, January 28, 2008 3:44 PM
When Premier bought Six Flags in 1998, they (Six Flags) were $1.8 Billion in debt, when did Six Flags innitially start having serious financial hardships? They were so much smaller then.

*** Edited 1/28/2008 9:10:24 PM UTC by john peck***

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Monday, January 28, 2008 3:48 PM
Change that 'Million' in your post to 'Billion' for starters...
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Monday, January 28, 2008 3:58 PM

john peck said:
...when did Six Flags innitially start having serious financial hardships?

Seems like they've always had problems.

Check out this timeline. (seems relatively accurate)

According to that, they were dangerously close to bankrupcy back in 1991. Debt is a term synonymous with Six Flags. :)

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Monday, January 28, 2008 4:15 PM
Wow... 2 small companies start buying a ton of parks... each sinking further into the the financial quagmire... then both meet, merge and go super nova.

Essentially.

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Monday, January 28, 2008 4:22 PM

spaceace12 said:
Parks that could be sold: SFKK, La Ronda, and SF Mexico.

SF Inc. doesn't entirely own SFKK. The land is owned by the Kentucky Exposition Center and is leased to Six Flags. Six Flags owns all the rides, but how much money can they really get or save by relocating or selling used rides? They are most likely under contractual obligations with the Kentucky Exposition Center to operate that park for a set number of years.

They also do not own LaRonde, that park is owned by the city and managed by Six Flags. I believe they signed a very long-term management agreement that may be difficult to get out of.

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Monday, January 28, 2008 4:23 PM
I think if anything does happen, that the "shock" of Geauga Lake closing last year will prepare all of us for the "anything-could-happen" scenario.

With all the new (and one used) rides being built this year, it makes you wonder which parks are looking like possible targets. And are they considering selling the parks for real estate (which didn't work out so well in the Astroworld-scenario), or selling them to another park operator?

For example, using the Fiesta Texas example, how much sense would it make for them to build Goliath, only to tear it down the following year? And some of the rides in the park would be tricky to transport to another location.

Take Superman Krypton Coaster for example; both the end of the lift/part of first drop and the helix following the loop are on the cliff. It could be a great asset somewhere else, but you'd need a lot of new supports to rebuild it. Is Six Flags in that kind of financial position? The Rattler would be a goner as well. (okay, so it would be no one's loss).

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Monday, January 28, 2008 4:37 PM
I think any of the following could potentially be on the chopping block:

SFMM
American Adventures
SFKK
SFA
SFGAv
Six Flags Mexico
La Ronde

Magic Mountain and Great Adventure attract a lot of people but might also fetch a nice chunk of money. I don't know what operating costs are compared to financial gain.

I also don't know much about either foreign parks' financial situations, but they dumped all the rest,so I could see them going, especially SFMX.

American Adventures just seems like it would be an added burden with no real contribution to the chain.

If SFA was sold, I could unfortunately see it being bulldozed ala AstroWorld since it is situated near existing development. And I think it is probably at the top of the list.

SFKK also fits this criteria, but as someone said already I think the ownership of that property may not be fully in their possession. And the incident didn't help any.

Lastly, I don't know that SFNO would even be considered since it isn't in an operatable state, but I'm sure they would ditch it if they could, but I think the city is going to hold them to the lease. *** Edited 1/28/2008 9:39:14 PM UTC by RushStreetFlyer***

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Monday, January 28, 2008 5:04 PM
Most of the land at SFKK is state owned. It's also been a cash cow, from what I've read before. I think this next sale will be one that will close down a park for the dollars it can bring in.

How many of the rides at SFA could be moved? Love it or hate it, so far it looks like the ride relocations from Geauga Lake have done well for Cedar Fair, and that would be an easy way to make money from land sales coupled with cheap "new" rides at other locations.

Chris, playing the pessimist today

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Monday, January 28, 2008 7:32 PM

Lord Gonchar said:Best quote ever:"Dennis Speigel, president of Cincinnati-based International Theme Park Services Inc., says the debt load is a major issue. Last week he told the Business Journal: 'You could bring back Walt Disney (to run Six Flags) and that company is still going to struggle.'"Which is something we speculated on way back when...Could SF be saved?Increasingly, the answer looks like a resounding, "no, it couldn't."

Gonch has this one right, Selling it off here and there to satisfy creditors *ISN'T GONNA FIX THE PROBLEM* Best to seel all but two or three parks, *PAY EVERYTHING OFF* and start *FRESH* with whats left.

If they end up with only SFOT, SFOG, SFGAM left thats still a pretty good start but you must first *ELIMINATE THE DEBT* to get to the point of *MAKING MONEY*

Chuck, saying all the additions, subtractions what not isn't gonna do a hill of beans when your *TWO BILLION* in *DEBT*

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Monday, January 28, 2008 8:02 PM
the only answer is to file, eliminate the debt and start over. It's possible they'll try and sell a few parks (American adventures AND Whitewater are probably the first two).

However this game is essentially over, the clock just hasn't completely run out yet.

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Monday, January 28, 2008 8:20 PM
That is not the only answer; it's the easy one. You need to consider that filing will upset thousands of investors and cause the loss of a lot of money. No one will have faith in the company again (if they just surrender) and they will not be able to start over.

The new management clearly has effective business skills and has proven that in its past ventures. But by taking over a company already way in the hole, they knew they had a lot of work ahead of them. They're constantly assessing and reassessing their situation and planning accordingly.

I think the idea of shedding parks has come up only to eliminate the ones that are not making a sufficient profit, not to gain the money from the sale. In order to eliminate the debt, they need to plan longterm and ensure there is no waste. This includes the positions they're eliminating, the parks that underperform, the rides that cost more than they make, and the marketing they don't need.

It will be a lot of work, which everyone has acknowledged, and I think they're handling it fine. Filing for bankruptcy would be the worst decision they could make. *** Edited 1/29/2008 1:22:38 AM UTC by SupermanFan1***

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Monday, January 28, 2008 9:21 PM
With the possibility of a sale of 3 additional parks, I could see them trimming out the non-branded parks and consolidating all the parks to run under the brand name. Of course like mentioned before, some of these properties are not entirely owned by Six Flags or Six Flags is contractually obligated to operate them for __ amount of years.
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Monday, January 28, 2008 9:54 PM

SupermanFan1 said:That is not the only answer; it's the easy one. You need to consider that filing will upset thousands of investors and cause the loss of a lot of money. No one will have faith in the company again (if they just surrender) and they will not be able to start over.The new management clearly has effective business skills and has proven that in its past ventures. But by taking over a company already way in the hole, they knew they had a lot of work ahead of them. They're constantly assessing and reassessing their situation and planning accordingly.I think the idea of shedding parks has come up only to eliminate the ones that are not making a sufficient profit, not to gain the money from the sale. In order to eliminate the debt, they need to plan longterm and ensure there is no waste. This includes the positions they're eliminating, the parks that underperform, the rides that cost more than they make, and the marketing they don't need.It will be a lot of work, which everyone has acknowledged, and I think they're handling it fine. Filing for bankruptcy would be the worst decision they could make. *** Edited 1/29/2008 1:22:38 AM UTC by SupermanFan1***

Planning accordingly? More like delaying the inevitable.

Bankruptcy? After you screw B&M and all the other manufactures out of millions owed them. Who you ever gonna buy from again?

Chuck

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Monday, January 28, 2008 9:56 PM

kRaXLeRidAh said:With the possibility of a sale of 3 additional parks, I could see them trimming out the non-branded parks and consolidating all the parks to run under the brand name. Of course like mentioned before, some of these properties are not entirely owned by Six Flags or Six Flags is contractually obligated to operate them for __ amount of years.

They were contractually required to operate SFNO too, Like that matters?

Chuck

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Monday, January 28, 2008 10:17 PM
I wonder if the current crisis in the real estate market will affect SFs selling plans.
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Monday, January 28, 2008 10:34 PM

Charles Nungester said:

kRaXLeRidAh said:With the possibility of a sale of 3 additional parks, I could see them trimming out the non-branded parks and consolidating all the parks to run under the brand name. Of course like mentioned before, some of these properties are not entirely owned by Six Flags or Six Flags is contractually obligated to operate them for __ amount of years.

They were contractually required to operate SFNO too, Like that matters?

Chuck


Uh. And your point is what exactly?

Last time I checked, SFNO is still virtually in an abandoned condition and overgrown with foliage and Six Flags is still contractually tied to the property.

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