Six Flags layoffs continue across the company

Pretty much describes anytime I have ever purchased a vehicle.

Are they trying to cut fat and re-direct the responsibility to folks who may have experience doing a better job at running big theme parks (Cedar Fair?) I haven't read into everything, and don't always understand it anyway... just thought I would ask if my assumption is true.

I don't think we need any new rides, it's ok to get rid of parks, but that they need to run better, look better, be more efficient and make guests happier/more isn't always better?

Schwarzkopf76:

Are they trying to cut fat and re-direct the responsibility to folks who may have experience doing a better job at running big theme parks (Cedar Fair?)

It seems the layoffs are targeting those exact folks. Mike Koontz at Kings Island is the perfect example of this.

I guess it depends on the definition of "fat." They're cutting some of the longest tenured people that have worked their way up over the years, who have often worked in and have knowledge of multiple different departments, been loyal to the company sometimes through more than one takeover already, and probably have been underpaid for the work they do in comparison to what they might make if they worked in management in another industry. They're replacing all that with a younger, less experienced, lower salaried person who might be capable of doing the work and they might even be more energetic and equally as enthusiastic about working in the amusement industry, but will have less decision making authority. The authority is all being consolidated at the corporate level. All I can picture is Tim Fisher and the BI/Analytics people look at their widgets and see that Cedar Point only has 9,000 people through the gate today and it is 68 degrees so they send a message to close the waterpark two hours early, close all non crew serve food outlets, cut capacity by half at the ones are to remain open, and cut ride units and staffing to minimal levels. You don't want the people who actually did come to the park today to have too good of a time and tell their friends how great it was that they hit the jackpot on a non-busy day and everything was a walk on. Save those few bucks and cut! Reputation and future visits and pass sales be damned!

Yes, it does open some opportunities for new blood to move up into better positions, but the top park level position is probably making far less than it was two weeks ago. The GMs/Park Presidents aren't the only ones being let go either. Someone said a bunch of planning and design people (they said the whole team, but not sure what exactly that means) were canned. We know several PR people have been let go too. They've beefed up on chefs over the past several years, but once they have their menu set for the season, I doubt they are safe.

TheMillenniumRider:

If NPS becomes that important that money is on the line, those leaders will not forfeit those dollars and at all costs the survey will be driven into the customer for 10/10.

Yeah, I imagine that's another side of the same leadership problem, not being able to see cause and effect.

Knowing how much love and care went into the Cedar Fair parks in the 2010s under Matt Ouimet, especially Cedar Point, all of this is just super unfortunate.

I was reminded today, had Dick Kinzel and Jack Falfas not had their office argument over “RockBand Live” costs we wouldn’t be in this debacle. Jack was heir to the Cedar Fair throne and arguably was capable of dealing with the financial challenges created by overpaying for the Paramount Parks but also evolving the company out of the 1970’s “mom-and-pop” style of Kinzel. If only…..

I don't know if that's true. He was known to be somewhat of a micromanager as well. And all that went down with the Apollo nonsense and subpar performance post-Paramount.

What's unfortunate is that Zimmerman had a template for success. Why would you pivot away from what was going well? That's a lot of hubris.

I think the almighty dollar has a lot to do with that.

I personally and professionally know many of the folks who have been laid off, or who have chosen to take the severance buyout. What’s going to be interesting from my perspective is where eventually these people find new employment.

There are only so many jobs in attractions that would even suit many of these individuals from a responsibility and compensation standpoint. And it’s not like the attractions industry is on a hiring spree at the moment.

I will be curious to see if many of these individuals even stay in the industry, or migrate into something completely different.

The amusement industry landscape has certainly changed over the past 10-20 years, and not necessarily for the better for legacy leaders who grew up in parks decades ago. Even before this merger and layoffs, the industry has lost some really good operators to other industries or segments in attractions, such as the supplier side of the business for example.

I can think of multiple recent examples of operators migrating over to the supplier side and doing very well, earning decent compensation and in roles with far less stress with normal work schedules and demands.

Jeff:

What's unfortunate is that Zimmerman had a template for success. Why would you pivot away from what was going well?

The simple answer is that he has new bosses now (the board). Several of the members now don’t think the template is working because neither company has been able to provide any meaningful return to investors post Covid. Forget real growth, revenue is not even keeping up with inflation. The consistent dividend yield pre Covid is what gave Cedar Fair a moat against investor activism. For all that Kinzel got wrong, this structure was very savvy and safeguarded the company for years.

Without those quarterly distributions, there is no reason to own this stock right now unless you believe they can increase the share value somehow. The market is sending the signal that they don’t believe in the revenue generating upside right now, so that leaves cost-cutting as the option. And this is why the merger, and the change in playbook was unavoidable: The industry has had 5 years to resuscitate after COVID and it just hasn’t happened.

Hanging n' Banging:

What’s going to be interesting from my perspective is where eventually these people find new employment.

I'd be curious to know how many folks opted for the reduction to part time/full time but seasonal status rather than the severance. From what I gather, dropping down was offered to nearly every employee that was affected. Depending on the generosity of the severance package, I can see the appeal of staying on for summer season as a seasonal manager while trying to decide on next steps. But I can equally see the appeal of cutting my losses and taking the severance.

I knew Falfas a bit and, while I liked him, he was a tough leader. I never worked for Ouimet but given what I've learned about him I suspect that Cedar Fair did better under Ouimet than it would have done with Falfas at the helm. I just think Ouimet brought an outsider's perspective, better morale, some of the Disney-philosophy, etc it all hit the company at the right time.

BrettV:

I'd be curious to know how many folks opted for the reduction to part time/full time but seasonal status rather than the severance.

Having been offered a similar choice recently, along with many of my colleagues, the decision generally came down to external factors:

• Age
• Health and healthcare
• Kids in college (or younger)
• Parents in nursing homes
• Mortgages

... along with general lifestyle choices. I had intentionally kept my cost of living modest to avoid being trapped in the job. Not all my colleagues had done the same.

Fun:

Forget real growth, revenue is not even keeping up with inflation.

You will have a tough time keeping up with inflation when you're hell bent on giving away the gate by selling passes for $99 or less and trying to make everything up in volume. This has already been tried by Six Flags in the past and led them to bankruptcy.

The Cedar side is at basically the same attendance as they had before COVID. It's the legacy Six parks (including big ones like Over Texas, Magic Mountain, and Great Adventure) that are way down. Why is that? I say a lot of it has to do with the fact that they've earned themselves a ghetto reputation where you can count on rides being closed, not operated at decent capacity, and maybe even see a fight or two. This isn't the model they should be following.

Ouimet was the right leader at the right time for Cedar Fair. He unleashed the talent that was held back under Kinzel. The product was slowly but steadily being elevated. He wasn't focused on penny pinching, but creating emotional, irreplicable connections between the product and the guests - memories that will endure for a long time and have today's young people taking their kids to the park in the future. His mistake was thinking Zimmerman could take the reins and continue the success. Instead they quickly undid most of what Ouimet did in terms of making the parks more well rounded and went back to centralized control.

Yeah, much of that is self-inflicted harm, absolutely. Attendance at CF parks has been relatively static for two decades. SF were in decline presumably because it was a crappy experience. Both have chased this silly strategy around nearly free passes, with the hope that they'll make it up inside. This doesn't work, and everyone should remember this doesn't work. I mean, a single-day ticket at Fun Spot... Fun Spot! is $70 at the gate. It's $60 online, but that's still $10 more than Cedar Point online.

If you don't understand the value of your own product, how are you supposed to make money with it?

With Siebert know being the head of Texas (the only Regional VP we know) I assume the right President got promoted in the other regions. Also Over Texas just announced Live E and events for the first time in a decade. Yes we lost the main stage at CP, but they still have two big shows, and multiple Live Bands and etc, its not gone.

And having been to SFNE and GrAdv, and CP this year, some of the Ouimet approach was still in effect, food was vastly better at the Legacy SF parks, and maintenance and painting, and security. But perhaps more importantly the Kinzel era Security and Park Policy enforcement. I saw way better ride ops, also Senior Ride Ops dealing with rowdy guest and park security. All 3 parks where in way better shape then they where during covid.

I am just trying to say the new SF is not completely vapid like any SF post Premier as some of you are moaning about having not been to any parks. Hell Over Georgia is looking better then it has in decades. Nor is it as slow and penny conscious as Kinzel CF.

The rides that closed, and closing of SFA all make sense.

Now gutting your mid level management, that knows your park well, is a stupid move. Although as previously stated all the presidents were not Siebert. And this is especially interesting considering Hershened completed its acquisition last week , and the main headline quotes it put out. “To us, this is so much bigger than adding attractions to our portfolio of family brands—growth is about people. It’s about creating a great place to work so our hosts love what they do and can create memories worth repeating for our guests for generations to come.”

But as Matt said they have the benefit of being private, and not worrying about synergy and quarterly reports. But as pointed out above the elimination of the LLC, and the dividend, to outflank old CF, may actually end up being their Achilles heal.

Also with Herschend now operating all the other big regionals, and United realizing they can’t skimp on upgrades. Not to mention Universal in full court press. The room for error will be far less.

Once next years cap ex program is implemented, and the rest of food program implementation happens. And they get a full year of policy implementation across both parks. Then we can truly start bitching hard about the effects this will have. But I find most of it now overblown.

*Also not mentioned here is that apparently both wood coasters at MA got alot of work this off season, one RMC track, the other more Titan. Something Kinzel CF would of never done.

*Side note they did mention at investor meeting 2027 likely last year for CGA, as to go beyond will have to extend lease agreement.

Sharpel007:

and United realizing they can’t skimp on upgrades

Still waiting for this one! :P

In all seriousness, I hope your assessment is right and I hope that the emotions longtime staff and customers are feeling from the recent layoffs are the worst thing to happen post merger. But it does seem like the product has already started to improve at several Legacy Six Flags parks, and although the product at a park like Cedar Point isn't what it was 15-20 years ago, I haven't seen anything that shows it's any different than it was in 2022-2023.

Sharpel007:
With Siebert know being the head of Texas (the only Regional VP we know)

I believe I saw somewhere it's Jason McClure as the regional VP for Cedar Point/Kings Island and possibly a third park as well. Knowing his passion and knowledge for Cedar Point as well as Colleen Murphy being put in the new Park Manager role, you have two people who know the park and the Ohio market inside and out. That's way better than two random outsiders getting those positions.

Still waiting for this one! :P

Big Bad Wolf, Wild Oasis, and the SD Atlantis upgrade seem to point this way.

customers are feeling from the recent layoffs

Having worked at CP in the Kinzel every VP had to walk for an hour era, some did great some where terrible. The GP crowd had no idea who Dick was, and depending on his mood it could go either way. Bill Sphen was a determent out of the office. Hildebrandt was always great. That being said most of the GP does not care about the park president, middle management, or their personality. They only care that staff they meet, they want them enthused, and to be upbeat, and have answers. Some serious locals know deeper but not much.

And from what Ive seen of the Legacy SF park employees there is definitely more wind in their sails, and warmth, and enthusiasm. And that is a more important effect of the merger then senior management.