Six Flags loss widens in what exec calls "transition year"

Posted Friday, March 16, 2007 9:21 AM | Contributed by Jeff

Theme park operator Six Flags Inc. on Thursday reported a wider fourth-quarter loss after writing down the value of seven locations it planned to sell. The loss was $189.7 million, or $2.07 a share, compared with $139 million, or $1.55, a year earlier, the New York-based company said. Sales were little changed at $104.3 million. Six Flags reduced the value of the parks it had agreed to sell for $312 million to PARC Management, a closely held company run by former amusement park executives.

Read more from The LA Times.

Friday, March 16, 2007 9:22 AM
Jeff's avatar Well, at least they beat the analysts. Still, season passes accounting for half of attendance seems really high.
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Friday, March 16, 2007 9:40 AM
I saw Shapiro being interviewed on CNBC's Fast Money last night. He's a pretty upbeat guy, and he seems pretty confident of his new plans for the park in 2007 and isn't dwelling on the 06 numbers. The best thing I heard is that they have created "clean teams", who do nothing but roam the park and clean. It almost sounds like they hired an outside company in addition to SF staff. So it sounds like he knew the problems and is taking steps to fix the common customer compalints. While I'm not completely sold on the concept of labeling a park family friendly without the major attractions to back it up, it sounds like they are at least at the beginnng of achieving their goals.
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Friday, March 16, 2007 12:52 PM
Higher prices with nothing to gain at the parks (no new rides) got the company in more mess. And they wonder they are losing more money? This stuff is good, but rides need to be added or changed too especially at the dinky parks. I see why Darien Lake and Elitch Gardens were sold. Look at there rides. GL, I see the same thing. Let's say we got the whole family friendly thing down, but now let's work on rides, (people) and prices (season, parking, regular admission).

Why am I not inclined to go back to SFKK? It's the rides. It's not because the people in the park are a bunch of pains in the butts, but it's what I'm riding. If you have the rides (roller coasters are wonderful at SFOG), work on the personnel. Technically, SFOG doesn't have the rides because they don't ENOUGH good/great flats. SFMM is in the same boat as SFOG. They don't have enough flats. They don't need anymore coasters for a very long time though. I don't think SFGAdv has enough flats either. SFGAm has everything. Maybe, they could add a couple more thrilling flats though.

SFStL needs the flats, and roller coasters. Looking at SFA, I think they need flats. Looking at the Great Escape, I think that park just needs to go. Six Flags Mexico could add another roller coaster. They have the tween flats down pat. I think they should just sell La Ronde, and of course SFNO, is just not working. SFFT still needs another coaster or more thrilling flats. SFDK still needs another coaster, or more thrilling flats. SFOT could add more thrilling flats.

Thrilling flats consist of Tivoli/KMG Spin Out, KMG Fireball, Alpine Bobs (with lights, music, fog effects) Zippers, ARM Super Shots, Power Surges, Shocker, Freak Out, Orbiter, Tango, Himilayas, Tivoli Remixes (It's looks cool, but I haven't been on it.), Wipeouts, Spider or (Octopus), and maybe Force 10.

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Friday, March 16, 2007 2:00 PM
Olsor's avatar Real life ain't RCT. The GP we so fondly speak of on these pages doesn't differentiate between roller coasters and flat rides the way we do--they're all just attractions to them. If SFMM lacks in flat rides, they certainly make up for it in coasters. Flat rides also have capacity issues that most coasters don't. It's not an easy answer of "this park needs flats" and "this park needs coasters." Most Six Flags parks need "much better customer service," "more rides for the family," and "more patrons leaving with a positive experience."

And Six Flags proved that adding rides every other year causes a spike in attendance...every other year. It doesn't necessarily build a lasting base of regular customers. You need only look at the Busch parks to see that you can go 7-8 years between adding major rides and still keep bringing in the guests in increasing numbers.

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Friday, March 16, 2007 2:01 PM
Yeah I agree that some of the parks in the chain are pretty much built out for the coasters. Imo, they can still install coasters but move their choices into different directions.

An installation like Uni's Mummy for example is a good choice - dark ride/coaster, although realistically that might be out of their price range. But other "family" coasters, like a Vekoma Booster Bike, the installations of more Tony Hawk Big Spins, even Disko coasters, etc., can serve to expand the audience.

I'm wondering though if some flats don't just limit the park though and guests are more reminded of a county fair than a theme park. I would think that the parks would be better served by interactive dark rides (Sally seemes to do pretty good work in the field), 4D theaters, and the like. Imo, their ultimate goal is for customers to view their park differently, so while flats are important and my personal interest is in thrill rides, it might be a short term solution to their overall problem.

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Friday, March 16, 2007 2:21 PM
Jeff's avatar

...but rides need to be added or changed too
I don't know if you've been playing along, but that didn't exactly work for the previous management.
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Friday, March 16, 2007 2:27 PM
"The GP we so fondly speak of on these pages doesn't differentiate between roller coasters and flat rides the way we do--they're all just attractions to them."

You're fooling yourself if you think that. Of course the public can tell the difference between a coaster and other flat rides. And guess what: roller coasters are by far more popular with all segments of the population (even families which, oddly, a lot of people here think only are interested in small circulars and shows). Even in one of the best parks, Cedar Point, you never hear people (and by people I refer to the GP), talking about how much they want to go so they can ride the Dodgems, Carousel, or Troika. They all talk about the coasters. Ask your friends/coworkers/people on the street about your local amusement park. I bet they all know and love the coasters more than any other part of the park.


Anyway, if any of you were wondering about the "non-cash loss" on the sale of the 7 parks. It comes from Six Flags selling the parks for less than they had them valued on the balance sheet. They sold for a "non-cash" loss.

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Friday, March 16, 2007 2:28 PM
Okay, I've been over this with another member many times before, but it bears repeating--the KMG Fireball is NOT available as a park model. Chance/Morgan has the rights to the park version and it's known as the Revolution. Some of the parks that have it are Dorney Park, Hersheypark, and Knott's Berry Farm. It has eight-arms instead of six.

Zippers and Freak Outs aren't high-capacity rides, therefore I can't imagine any Six Flags adding one. Those rides belong at a fairground where they can get a high-ticket price to minimize riders. The Technical Park Streetfighter would be a much better substitution for the Freak Out anyway since it has four-arms and lots and lots of airtime.

I've said it before and I'll say it again, the KMG Tango is a terrible ride. It is way too violent for most riders. Both my friend and I had a lot of pain in our collarbones after the last time we rode it, and swore we wouldn't get on it again. Add onto that a very cumbersome restraint system that is highly prone to breaking down, and if I were a park I'd avoid it like the plague.

Some of the other rides you mentioned are more realistic like the Orbiter (one can be found at BGE running in light-mode), Wipeouts/Casino Wheels--found at many parks including SFFT, SFNE, and KW. Alpine Bobs can be found at SFA and SFNE. There's a Musik Express at SFGadv., so I don't see why they couldn't add more elsewhere. Octopus's are cool as long as they're like SFA's version which can load all cars simultaneously.

One thing that surprises me is that you avoided the whole Huss catalog altogether. When I think of "thrilling" flats, I think of Breakdances, Frisbees (in regular and giant sizes), Suspended TopSpins (Tomb Raider Firefall has an insane program), and Condors (it is somewhat relaxing as well). Huss makes flying carpets as well, so there's another option.

Some of the parks you picked on I think are doing just fine with the flats like SFFT. And since they just got Tony Hawk's Big Spin, I wouldn't expect another new coaster for a few years. Their Frisbee has the best program I've experienced. SFOT just added ten new (and handed-down) flats last year. What more do you want? I would agree that SFSTL needs a few more flats, but they have Xcalibur, and that's a very thrilling (and big) flat.

SFA had more flats, but lost two last year--Chaos and Iron Eagle (Rotoshake) and honestly, I would've removed them sooner! Both were absolute maintenance nightmares. I hope they will get replaced sometime in the future.

Lastly, SFGAdv. had the flats, and little-by-little they've been taken away--Evolution to SFSTL, Frisbee (and much earlier on Condor) to SFGAM, Breakdance to SFOT (or did it?), double Chance-Inverter to the boneyard, Jump, Rotor, Enterprise, Chaos, and Trabant probalby suffered the same fate. According to the GM, there should be a reversal of that in the coming years.

p.s. I rode the Tivoli Re-mix last year, and it was interesting and fast, but I wouldn't say I'd put it on my top-ten list. One thing that was scary though was how close our feet were getting to the backdrop. I'd love to see more Power Surges, but again, I don't think you're going to see too many outside of the local fair and Knoebels and Beech Bend.

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Friday, March 16, 2007 2:40 PM
Olsor's avatar Viper - I said the GP doesn't view flat rides and coasters the same way we as enthusiasts do. Obviously, they can tell the physical difference between the rides, but I doubt anyone in the GP discusses how many coasters a park has versus flat rides. Roller coasters get the headlines, but "attractions" are what keep people inside the park. That includes flat rides, water rides, shows, etc. You make it sound as if it's pointless for a park to build anything other than coasters.

And there are plenty of people who want to go to Kings Island to ride Drop Zone, for instance. Not all flat rides are bumper cars and scramblers. And a lot of the flat rides appeal to a younger or less-thrill-seeking demographic, in part because they're not 200 feet tall.

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Friday, March 16, 2007 2:49 PM
Lord Gonchar's avatar Well said, Olsor. :)
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Friday, March 16, 2007 3:00 PM
^^Don't they talk about Max Air, and Screamin' Swing at Cedar Point? The Troika, Carousel, Ferris Wheel, Scrambler, and so on more on my relaxing flats. Scrambler isn't that intense.

I think parks should have relaxing flats (Troika, Condor), thrill flats (Power Surge, Himilaya), water rides (which could be called flats), and kids flats (Zamperla Crazy Bus, Zamperla Balloon Wheel).

Cedar Point has about 10 thrilling flats. I really care for the Chaos. I do like Max Air, but there's better. I haven't been on Screamin Swing. There Super Himilaya isn't that great. It's weaker than the newer ones. The Tilt-A-Whirl, I haven't been on because I didn't know it was there. It's in the kids section. Enterprise are just okay. Pirate boats are boring. The Shrawktopf Calypso is okay. It's nothing to write home about.

The Matterhorn I did like, and the line also said so. The teens would rather go on that ride with music, and lights though. I see at any carnival out there. That's why they don't write home about that ride. Most of them are average at Cedar Point. Chaos is the one that is in my intensity factor, and when Wicked Twister was empty, this ride had a line. So, did Max Air. That Monster is boring. I like the Eyerly Spider better.

I think many people write home about Max Air, and Screamin Swing. If you had some newer flats like I was saying, there would be more wanting to go on the flats, and talking about them.

I've heard the bigger version of the KMG is weak. Considering the enormous size of the claw, you don't get enough g's. I will be going on it hopefully at Dorney Park. So, we shall see.

Lastly, for the county fair thing, I'm not trying to make the amusement park a total county fair thing. I like the roller coasters, and I like flat rides. How many people rave about flat rides at amusements like they do roller coasters? The reason why they rave about roller coasters is because there aren't enough Sky Hawks, Max Airs, Chaos, KMG Morgan Revolutions, Huss Top Spins (I don't like these.), and so on. What's the best you get at every park? Do you get like three rides of those. The bigger they are, the more money they cost. That's why you need smaller flats that aren't that high capacity.

Capacity means diddle to me. I rather go on a Spin Out that's 40 minutes compared to that Huss Giant Frisbee that's 20 minutes. I dig quality. Obviously, mice can make it at amusement parks, so why not great flats too?

When will that Troika at an amusement park peak 20 minutes? Probably never. I don't think anyone thinks it's worth it for that amount of time. Put in a Spin Out, and you will see 40 minute lines. In 12 days, the Florida State Fair made over 3.2 million dollars on the rides. Of course, the wristbands aren't as high as $40 or $55. People like the fairs too.

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Friday, March 16, 2007 5:08 PM
So far this discussion has been dominated by talk about rides, rides, and rides; I don't think this is appropriate. It is easy to point to a park with a lot of roller coasters and say: look how well they're doing. It is also easy to point to a different park with a lot of coasters and say: that park is doing terribly. The same can be said about parks with very few roller coasters. I believe there is something else going on.

I think Geauga Lake is a great example of this point. On one side of the pond you have (or had) 10 roller coasters and a decent number of flat rides, yet the crowds flock to Wildwater Kingdom. To anyone who would say this is because Wildwater Kingdom is new and crowds are attracted to new things, I say that the same phenomenon occurred when the water park was right next door to the rides. The point is... lets stop talking about what rides these parks "need" and consider what they're actually doing.

Shapiro said a few important things in the conference call which haven't been brought up yet.

1) Even though attendance was down there was a surge in per-capital revenue. Wasn't this always the goal new management? If per-cap revenue can stay constant, bringing the attendance back up would create a nice boost in overall revenue.

2) Season pass and group sales are up 30%+. Regardless of the exact number of sales, there seems to be a significant increase in these two categories.

3) New strategic marketing partnerships. Thomas the Tank Engine, the Wiggles, Nintendo Wii and numerous others. Don't underestimate the power of these marketing strategies; the Wiggles are wildly popular among children and are much more likely to bring families into the park than monster coasters.

And most importantly, Shapiro understands why people don't like Six Flags. Instead of focusing on short term goals like: boost attendance by x% this season he is focused on changing guest attitudes toward the company. In the conference call he brings up customer satisfaction surveys a number of times and concedes that word of mouth is the most powerful form of marketing in this type of industry. The "clean teams" are the epitome of the goal to change guest perception of the company. Why do people hate Six Flagss? Dirty parks... poor service. These are exactly what management is focused on.

Amusement parks are more than just rides. Spend a few days with families and not coaster enthusiasts and this might become a little more clear. Or maybe not...

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Friday, March 16, 2007 5:41 PM
john peck's avatar I wonder if the guest's experiences in 2006 will entice them to come back in 2007. It would be neat to see their attendence on the up and up.
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Friday, March 16, 2007 9:43 PM
Evil Rob, I totally agree that amusement parks are more than just rides, but to say that it's not appropriate to talk about rides in the context of bringing people back to a park misses the point as well. When some parks go for years without new attractions, boredom starts to set in for everyone, and not just enthusiasts. When the park an hour-and-a-half down the road keeps adding new attractions every year and you're not, to me it's a receipe for declining attendance.

When some parks such as SFGAdv. and SFA keep removing rides (Great Adventure is down another two this year with the loss of one of its log flumes and Stuntman's Freefall/SFA is down another one with Typhoon Seacoaster aka Skull Mountain until renovations are complete), there are fewer options for families to do other things than ride roller coasters.

This makes the lines for the coasters longer, and drags down what could be a better experience for everyone. There are also plenty of people who don't want to ride the hypercoaster or the 128mph-launched coaster due to fear of heights--and are looking for something a little bit more sedate. And that's why Spinout and I have been talking about flats (see SFGAM or SFNE for a good example of what a good mix looks like).

Listen, I've visited some Six Flags parks at their best--SFFT (great atmosphere and theming) and SFOT in 02' (it's the original and really good), SFNE in 04' (great appearance, my no.1 coaster and a fantastic Hurricane Harbor), and finally SFGAM (It doesn't get much better than that in appearance or operations) last year. I'd even give a runner-up award to SFSTL even after The Boss experience on the same trip (Long story. I'll spare you the details).

I've also seen some Six Flags at their worst--excessive line-cutting, slacker/rude employees, trashcans overflowing, grafitti everywhere, rides with badly fading paint, rides not being run to capacity, closed rides, poorly implemented ride-reservation systems etc., lack of bathroom facilities etc. I won't name those parks, because I already did. I've seen those parks through either friends or families eyes who weren't enthusiasts and it wasn't pretty.

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Friday, March 16, 2007 11:04 PM
Skyhawk, maXair, and Power Tower are all good examples of rides that are near coaster status. Big thrill rides that were advertised as WHATS NEW. They stand, I think, on a level just below coasters in terms of public appeal.

"And there are plenty of people who want to go to Kings Island to ride Drop Zone, for instance. Not all flat rides are bumper cars and scramblers."

And those big rides are nearly coasters. But I'm really talking about the attitude we seem to be getting that parks (Six Flags mostly) should only focus on small "kiddy" rides and shows. Certainly parks need to diversify but the attitude that families don't like coasters and that coasters are only for teens and "us" isn't true and isn't going to help. Tons of families LOVE the biggest and scariest rides. Hell, my MOTHER loves Top Thrill Dragster and Millennium Force.

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And to slightly divert, here is a good example:

Disney's California Adventure.

Tons of movies, shows, entertainment, shops and food. Pretty much everything except rides and guess what? It's been a failure.

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Saturday, March 17, 2007 12:09 AM
Mamoosh's avatar DCA...pretty much everything but rides? Have you actually been to the park?
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Saturday, March 17, 2007 12:47 AM
I dont think SF is going to help the bottom line if they think there salvation is cheap season passes!!

They need to increase the quality of the park experience so people will be willing to visit the park and pay top dollar to do it and not buy a season pass which doesnt even cost the price of a 2 day admission ticket. They will try to increase attendance, but giving away the gate wont help them reduce the debt they have.

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Saturday, March 17, 2007 8:08 AM

It's been a failure.

Only relative to Disneyland. It's attendance in 2005 was 5.8M. More than Knott's. More than Universal. More than SFMM. More than SWSD. Average stays at the west coast disney resorts have gone up, from what I hear, so there is plenty of indirect revenue generated as well. And, it's done all of this without significantly cannibalizing Disneyland attendance.

In other words, DCA is doing pretty much exactly what it was supposed to do, though not quite to the extent that was hoped. It's not a world-beater, but it's not a failure, either.

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Saturday, March 17, 2007 10:12 AM
Brian...that's not the case. It has been an attendence, but more importantly, a financial failure since day one and continues to be. Why? Almost no one pays to go there, nor adds an extra day to a stay to go there. That 5.8 million figure represents almost entirely Annual passholders, park hoppers, and 2-for-1 tickets.

Disney brass (like Bob Iger) have said in the press that it's a big problem that they're trying to figure out how to solve it. I read stats once on profits and attencence to the place and it's pathetic. (If I remember, something like 15% of pre-opening projections for the first 5 years)

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