Six Flags posts net loss of $100 million in second quarter

I really do think the convergence of Inflation, Trump uncertainty, Weather, and bad press around the way handled ride removals really all snowballed to hit at once, esp at SF Legacy which already in bad shape attendance wise.

SFA America was always prime to get the axe, every ride removal made elsewhere sense. Since I moved to NJ in ‘19 Ka never had a line over 15 -30 min and I knew what it somewhat cost to keep TT1 open. They just should have let people know. And should of released early the plan for its replacement.

Xmas events at parks cut always seemed low attendance and took crew off valuable winter refurbs. Halloween at MA was only a 2 year old thing, and considering its location not surprised. The unwinding of SFA they should of just axed special events when announced closing. But this changing course constantly on special events has been a PR nightmare.

That being said I have only seen operations way better at every park I have been to this year. The maintenance and landscaping and upkeep and food have all improved vastly. Security better but still has a way to go. And Live E has been added to parks that didn’t have it, and other parks have stayed the same.

I do find it interesting that Witherow the last senior Kinzel person around is taking the lead. He orchestrated the Paramount acquisition. And stayed under Matt, so he should know better, but he also went to Miami O.

CP - KI - CW - Knotts = Top Tier

CW - KD - Sclitterbahns -SFMM - SFGrAm - FiestaTex - SFGrAdv - SFOG - SFOT - SFNE = MidTier

VF - WofF - Dorney - SFSL - SFDC = Meh Tier

FrontierCity - MA - LaRonde - Darien - GrEs = Danger Tier!

I bet MA is profitable and sorted, just needs rides from Maryland. Great Escape just got alot of love so prob also decent.

The rest and extra waterparks not at parks possibly but it seems by water park improvements profits there not a problem.

Stock getting hammered, and losing the partnership dividend and protection is going to accelerate things for better and worse, it definitely accelerated Zimmermans departure. It just hopefully accelerates common sense on pricing.

Stock ending up hovering around $24.00 now, down slightly less than 22%.

I know that they will do anything they can to defend that dividend, (currently slightly over 5%). Not giving advice here, but I think they will be hard pressed to do so. Dividend is slightly over $100MM in cash per year.

If they scrap the dividend (even though no longer an MLPS) then the stock will drop considerably. This stock is still too risky for me (I wasn't in it before today's announcement and huge price drop).

We all said that this merger wouldn't be good for the industry or our hobby. Sadly we were right.

We all said that this merger wouldn't be good for the industry or our hobby. Sadly we were right.

Actually, I think without it Legacy SF would eventually of went bankrupt again, or private equity, and could have been portfolio optimized worst, and alot more parks and rides lost.

New SF is defiantly trying to fix things, but it’s a giant mess to fix. And climate change and Trump are not making it easier.

I am really curious to see how Herschend manages things in these tough times at their new parks. Will they go as slow as they did at KK since no shareholders? Or will they move to fix things quicker?

I hope that Herschend picks up anything this chain divests. Herschend knows how to operate great parks. I don’t mind divestitures as long as somebody with competence is able to grab them.

Any chance they renew the Peanuts license? Hoping not to see WB at any legacy CF park.

https://themeparksbydon.com...G9un1zSVdQ

Herschend should have held out a little while before purchasing those mediocre Palace parks. There are some nice parks in the Six Flags chain with low attendance (Kings Dominion and Carowinds for example) that they might be able to get their hands on at a reasonable price. Those parks would flourish under the proper management that understands all kinds of customers

I hope that Herschend picks up anything this chain divests

Considering the 1 Bil loan they just had to get for the PE Parks, and how quickly they sold some of that, not anytime soon.

Also and ask anyone in GA how Wild Adventures is going. They are great and expanding SDC and DW, fixing KK and WA not so much though obviously both needed alot too.

Sharpel007:

Actually, I think without it Legacy SF would eventually of went bankrupt again, or private equity, and could have been portfolio optimized worst, and alot more parks and rides lost.

I think that's where it's going to end up again. Except now it will be larger and more dramatic and impact nearly every regional park in the country because they own so darn many. This company is reaping what it has sewn, but unfortunately, there's a good chance it takes a bunch of parks down in the process and makes the experience at others that do survive quite miserable until they are bought out by someone who knows what they are doing.

CreditWh0re has an interesting point about the overlap in passes between the two chains. I'd be surprised if anywhere near 9% of 6.7 million had passes at both parks, but you'd think they'd have taken that overlap into account either in their due diligence before doing the merger or at least mentioned it as a contributing factor here.

FrontierCity - MA - LaRonde - Darien - GrEs = Danger Tier!

Six Flags doesn’t own Frontier City, Darien, or La Ronde, they have contracts to operate the parks. So unless they’re making operating losses, there’s nothing to be gained by selling them. They may own a few of the rides, but used amusement rides are not really valuable - especially since there are fewer potential buyers, at least in North America.

If they are losing money, I’d assume they can terminate the contracts.

The land under Michigan’s Adventure is probably just about the least valuable real estate the chain owns, so again, if it’s at all profitable in terms of operations, there’s no reason to close it. But it might make sense to sell it as an operating park, if they could find a buyer.

Great Escape is probably a bit more valuable than MA, but likewise I’d guess it’s worth more as a business rather than stripping it for parts.

Therein lies part of the problem.

They're $5.1B in debt, dividend is ~$110MM a year.

Selling off a few isolated stand alone waterparks won't do much to knock down the debt but they will do so anyway (Sorry Rockford, but your time has come).

I don't know how much "excess land" they really have that is marketable (KD/Carowinds comes to mind), but again, I don't expect it to be in the billions.

So, that puts some of the lower tier parks in the cross hairs.

Assuming you quit managing some of the non-owned parks, can you cut enough corporate overhead that supported those parks (that hasn't already been cut) to make that accretive? (no clue, but I'm doubtful), so that would be a hit to revenue without any real upside (assuming those management contracts were profitable to begin with).

After that, you're really facing the idea of selling some of your smaller/less profitable parks, as ongoing businesses to willing buyers. Sadly after Palace's move, there aren't a lot of potential buyers left. While I wouldn't mind selling Mid-America to Herschend per se, (as I trust them as stewards of the park), Herschend's appetite and ability to buy several of the meh-mid tier parks (credits to whomever posted that above) has to be limited. I don't see many other options that are good for FUN (yielding sufficient money in a sale) and good for the park(s) involved (selling as a going concern).

I don't see Matt Ouimet riding in on the back of Private Equity to buy a subset of FUN and be the good guy in this movie.

My big fear is that FUN somehow enters into a Sale Leaseback arrangement, which will be the deathknell for any park involved.

I sure hope private equity doesn't come into it. By definition, they're not into building anything enduring.

Sharpel007:

Considering the 1 Bil loan they just had to get for the PE Parks, and how quickly they sold some of that, not anytime soon.

That's not really a factor. The loan is backed by the new property they acquired. You aren't blocked from getting an auto loan because you already have another car.

At least the stock isn't getting a second day of crash.

That's not really a factor.

More so that they tripled the size of the company with the PE parks, and with being private and holding DW and SDC they could def add more, but how much more debit are they willing to add. They quite don’t have the cash flow of Mars or Aldi…

It's not an amount of debt, it's debt relative to assets and cash flow to pay it back. If they triple the debt but triple the ability to pay for it, that's fine. It does not appear that they're over leveraged.

Of course, but they don’t have the cash flow to buy old CF. 2 of the 4 new parks are Idlewild and Dutch Wonderland, I am sure Knoebels probably Does 3x what those parks do in income.

Because this makes sense in your mind does not make any of it true.

CreditWh0re:

I don't see Matt Ouimet riding in on the back of Private Equity to buy a subset of FUN and be the good guy in this movie.

That Veronica Vaughn…

Out of curiosity how far ba k does o e ha e to go for six and fun to have a 2nd quarter combined attendance of 14.2 million. I'd have to say that any and all attendance gains of the last 20 years or so have to be wiped away.