it's not looking good for the whole year as they looking at posting a company wide loss.
I think the best line is right here...
From Rick Aristotle Munarriz of The Motley Fool
Next year doesn't look too promising as Six Flags has slashed its capital spending budget to just $75 million. Parks need new rides to grow attendance and that paltry sum won't bring a shiny new scream machine to a Six Flags near you. The company had earmarked $130 million in capital spending this year and you already know how that turned out.
The whole story is right here, man these guys are brutal...
That's exactly the issue... cap ex is a part of the formula, not the sole means to wealth and success. Kennywood packs in the people year after year, and they don't exactly install new coasters every year.
I do think its interesting that the article noted that Six Flags has been a little rosey with their future attendance projections. Maybe in their upcoming 2004 projections they should just cut to the chase and project that attendance will be off for all of 2004 due to "bad weather."
Obviously by what I'm about to say, I'm no financial genius, but what would happen to the debt (and associated interest) which is basically eating Premier alive right now if they were to sell off a park? This is all (mostly) hypothetical, but if SFWoA were to be sold to an independant operator, if the thing was sold lock stock and barrel, except rights to Looney Tunes and such, would the outstanding debt on the Sea World and 5 coasters in 2 years expansion which I'm assuming is causing all sorts of headaches disappear magically, or would the investor need to have enough money to pay off those debts fully before buying the park? Or would someone else inherit those debt problems directly?
Impulse-ive, the problem with that line of thinking is that parks like SFWOA REPRESENT debt... the cost of buying the Sea World side, adding multiple coasters and attractions are still looming large on their balance sheet. The proceeds from the sale would have to first go to settle those debts, and only then would they contribute to the co's balance... but it would also severely reduce the co's assets or value. Add to that the fact that there would only be 2 or 3 potential buyers, none of which are in the market for new parks in the US right now, and you can see how you wouldn't get much for trying to sell a park that size. *** Edited 11/13/2003 9:49:23 PM UTC by ThemeDesigner***
I see what you mean ThemeDesigner, I just got into that whole Balance Sheet thing this semester, so my knowledge of it is sketchy at best. My thoughts weren't necessarily to use the sale to reduce Premier's debt, but more to just rid themselves of one of their largest debt sources. Kind of like if you own two buildings, one that you owe $10,000 on and one you owe $20,000 on, if you somehow manage to sell off the $20,000, you're still in the hole 10 grand, but you're only paying interest on a $10,000 loan, not $30,000. Ah beginner's accounting at its best! ;)
And I've been wondering about this the last couple of days you've been "following" me around ... what IS the eleven letter word?
And bigboy, I'm sure not convinced that the cost of the park is offset by the cash flow - if things keep goin the way they're going (CS wise), perhaps ...
Selling off properties (assuming anyone would want to buy a park in the first place) is not going to happen folks, we've been over this a couple of times. If you're a hot dog vendor in debt for more than the cost of your cart, are you going to sell your cart? Of course not, because then you can't generate the revenue to pay off your debt. The parks are like hot dog carts.
Hypercoaster at SFWoA? Obviously...not this year...again! But $75 million wont put a new ride much of anywhere. Most of that ammount I expect to be put into relocating rides and general park improvements, if we are even that lucky. Six Flags definitely has the potential...but do they really have the potential to reach their potential?
Honestly, I think SFI is in the process of "getting it"....low cap-ex bothers me less with each passing day as I hear more and more of what they ARE doing this off-season to improve the guest experience in other (more productive?) ways....
Profitability leads to mre and better rides, NOT the other way around...;)