Six Flags sale financials

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Uhhh... the revenue generated by the park being OPEN more than offsets the operational expense.

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Not necessarily. I don't know SFAW's numbers, but an extreme example in simple round numbers:

It costs $10 a year to run the park, but the park brings in $11 a year. The profit is $1 a year.

If they sell the park now they make $50 cash.

Depending on the situation and the mindset of those in charge, having the $50 nw might be a better move than having $1 for as long as the park maintains that profitablility.

Then factor in projections. Maybe the park foresees that in the next few years the cost of running the park will rise or the revenue generated will drop or whatever. Suddenly it takes even more than that 50 years to break even over a flat out sale.

Then you have to factor the debt owed and what is due to who and when and how.

Or what if the fast money from a sale will raise the profitability of two or three other parks by an additional $1 a year (sticking with the extreme example scenario/numbers) - suddenly it makes sense to put it there and take the $3 a year over the $1 that Astroworld generates.

Not to mention the countless other issues or scenarios that no one posting to this thread is truly qualified to consider. (myself included :) )

I have no problem with the idea that selling a park makes more sense financially than continuing to operate. There are tons of reasons that such a situation could be the case.

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Lord Gonchar said:

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Uhhh... the revenue generated by the park being OPEN more than offsets the operational expense.

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Not necessarily. I don't know SFAW's numbers, but an extreme example in simple round numbers:

It costs $10 a year to run the park, but the park brings in $11 a year. The profit is $1 a year.

If they sell the park now they make $50 cash.

Depending on the situation and the mindset of those in charge, having the $50 nw might be a better move than having $1 for as long as the park maintains that profitablility.

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I understood his statement to imply that closing a park so one doesn't have to pay the operating expenses improves the cash flow for a given year, which isn't the case.

Otherwise, yeah that scenario is essentially what is happening. I don't believe that it would take 50 years for Astroworld to generate the amount of money they can raise with a quick sale - probably more in the 5-10 year range. This equation could be applied to any of their parks however.

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I understood his statement to imply that closing a park so one doesn't have to pay the operating expenses improves the cash flow for a given year, which isn't the case.

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Well it would if the park were operating at a loss, but yeah, I get what you're saying. :)

Hey it's Six Flags we're talking about here, $1 profit isn't out of the question ;)

It doesn't matter if they're still making payments.

SFI is still making payments now, and the creditors can still say no to the SFAW sale.

Once every five years, impulse-ive.

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Dutchman said:
The creditors have nothing to say about anything at this time, as long as they keep making their payments. The only time that they would is if SFI files for reorganization. Then the rush to claim what's left of the pie will begin

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The creditors have to approve any sale of assets listed as collateral. Do you really think the creditors are just going to sit back and watch all the assets disappear just because they are receiving payments?

I think he's right, The creditors have no say in a companys buisness decisions. SF could easily declare bankruptcy at this point and then where would they be?

Pennies on the dollar at best

Do you really think the creditors are just going to sit back and watch all the assets disappear just because they are receiving payments?

If I owed you 2bill and owned 17 houses, and I kept paying you, and then decided to sell off all of those houses, which would generate enough cash to pay you the 2bill I owe you, would you stop the sale?

SF only needs to sell each park for roughly $75 million each to pay off their entire debt, leaving the rest for paying themselves and investors. (This figure does not include the SF:Astroworld land sale, nor the SF:New Orleans most-likely permanent shutdown)

Most likely if the entire chain is sold as one whole unit, or in a sale to just a few large parties, it can be done where the total sale price must first be used to pay off the entire park debt before any of the remaining balance is retained by the seller (SF Inc.). It's all up to the Federal Trade Commission, negotiations, the lawyers and creditors.

The bankruptcy laws have now changed for both personal and business. Both people and businesses no longer have the option of easily filing bankruptcy, except for re-organization to pay off debt quicker. The new bankruptcy laws are meant to protect the creditors owed. One of the sole reasons some people are still paying over 10% in credit card interest is due to massive personal and business bankruptcy filings that are passed on to the remaining financially responsible community. The same goes for the insurance industry....I wasn't very happy when my insurance rates went up, even though I have never filed a claim except for a cracked windshield 7 1/2 years ago, but too many foolish drivers across the USA all contributed their share of claims that everyone had to pay more each year.

*** Edited 10/13/2005 2:51:39 PM UTC by midwave***

ooooooooooooops my bad i should have said "But by closing and selling a park you also save the operational expenses of said park. " So it's kind of a extra money influx.

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TeknoScorpion said:
Do you really think the creditors are just going to sit back and watch all the assets disappear just because they are receiving payments?

If I owed you 2bill and owned 17 houses, and I kept paying you, and then decided to sell off all of those houses, which would generate enough cash to pay you the 2bill I owe you, would you stop the sale?

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I'm not sure what point you are trying to make. I'm trying to tell everyone that the creditors have to approve the sale of any assets listed as collateral. If I felt you could generate enough cash to pay off the loan, then yes I would approve the sale. But my point is if the houses were listed as collateral on the loan, I would have to either approve the sale before you sell the houses or you would have to settle the debt. That is why you are required to go through expensive title searches before you can sell a house. They make certain there are no outstanding liens before the sale is completed.

*** Edited 10/13/2005 6:46:58 PM UTC by Jeffrey Seifert***

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midwave said:
SF only needs to sell each park for roughly $75 million each to pay off their entire debt,

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17 parks x $75 million only comes to $1.275 billion, that is just a little over half of their debt.

They actually have 28 properties (gotta count various smaller parks and water parks). Obviously they aren't all going to fetch the same price. White Water Bay in Oklahoma City isn't going to fetch anything what Magic Mountain could.

The annual report only lists 17 amusement parks, and that includes the smaller ones like Wyandot Lake. By park they mean everything on that property. You really can't sell Magic Mountain without Hurricane Harbor. I realize they also own a handful of separate waterparks but they're not going to get $75 million for a waterpark.

I'm telling you the creditors have to approve the sale of any assets listed as collateral.

I'm not saying that they don't. From your post, it sounded (to me anyways) like you were saying that it isn't going to be easy for them to get the creditors to approve. My point was that as long as they're getting paid off (like the original poster said), then why would the creditors stop them? If someone wants to pay me all the debt they owe me, then sure, I'd sit back and watch them sell off assets to get me my cash.

I never said the creditors would stop the sales. I just said the creditors would need to approve any sale of assets. I just don't think it is possible for them to generate enough cash to pay off the creditors by selling off bits and pieces. I don't think there are buyers out there for many of their properties. I really can't see the company breaking apart.

That debt will never be fully paid off, at least not by Six Flags. It will only be cut down and managed. The approval of creditors (for a sell) is just a formality, and there are ways to get around it anyway.

I'm interested in what plan new owners would come up with to boost the chain. Should be interesting.

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Jeffrey Seifert said:
The annual report only lists 17 amusement parks, and that includes the smaller ones like Wyandot Lake. By park they mean everything on that property. You really can't sell Magic Mountain without Hurricane Harbor. I realize they also own a handful of separate waterparks but they're not going to get $75 million for a waterpark.

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SFA - 515 acres *
SFAW - 99 acres *
SFDL - 980 acres *
SFEG - 67 acres *
SFFT - 206 acres *
SFGrAd, HH, WF - 2,200 acres *
SFGM - 300 acres *
SF HH Arlington, TX - 47 acres *
SF HH Valencia, CA - 12 acres *
SFKK - 58 acres
SFMM - 260 acres *
SFMW - 138 acres
SFM - 107 acres
SFNE - 230 acres *
SFNO - 206 acres
SFOG - 280 acres
SFOT - 200 acres
SFStL - 497 acres *
SF Waterworld Concord, CA - 21 acres
SF Waterworld Sacramento, CA - 14 acres
SF White Water Atlanta - 69 acres *
Enchanted Village and Wild Waves - 65 acres
Frontier City - 109 acres *
La Ronde - 146 acres
Great Escape - 357 acres *
Splashtown, Texas - 60 acres *
White Water Bay - 22 acres *
Wyandot Lake - 18 acres

The astericked properties are on land SF owns.

This is from the SEC filing. Most of the waterparks are on land separate from the other park, if both are in the same city. Dunno why they listed Valencia SFMM and HH are two entities.

*** Edited 10/13/2005 8:30:24 PM UTC by Fierce Pancake***

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Fierce Pancake said:
This is from the SEC filing. Most of the waterparks are on land separate from the other park, if both are in the same city. Dunno why they listed Valencia SFMM and HH are two entities.***

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I believe that would be because they actually charge seperate admission to the Hurricane Harbor by SFMM.