S&P lowers Six Flags' credit rating

Posted Wednesday, October 29, 2003 3:44 AM | Contributed by Avalanche Sam

Standard & Poor's Ratings Services said Monday that it lowered its corporate credit rating on Six Flags Inc. to "B+" from "BB-" based in part on an expected decline in EBITDA and weak attendance. They also consider the Cleveland park "problematic" and blame weather and the economy for negative results.

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Wednesday, October 29, 2003 4:01 AM
Jeff's avatar Are analysts just stupid? I can buy the economy excuse at destinations like Disney, but for regional parks? That, and the weather excuse, is just too tired to consider when Cedar Fair and the small independents are doing so well. I'd guess that Paramount Parks are doing well too, just by eye-balling it.

Interesting that they bring up Cleveland by name. I don't think anyone will ever understand why they combined the parks to one gate.

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Jeff - Webmaster/Admin - CoasterBuzz.com - My Blog
Blogs, photo albums - CampusFish
What time does the water show start?

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Wednesday, October 29, 2003 4:45 AM
Oh geez, the SFWoA/CP debate has even spread to the financial community! ;)
It is interesting that they mention it by name - perhaps SFWoA might just end up being the proverbial straw that breaks the camel's back? I hope not, cause the park's really improving lately, but if its even making financial waves, I'm more willing to believe all the rumors of Burke sightings and sale rumors for the park (and maybe others too). But, even that might end up being too little too late.
And I agree that the excuses are old but I think it took enough balls just to mention SFWoA close to by name, they're not going to come out and say "customer service and prices are crap which is why no one goes to these parks while the smaller guys are steady if not thriving"

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Brett
Resident Launch Whore

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Wednesday, October 29, 2003 4:47 AM
There are some rumors buzzing online and in Aurora about a potential sale of WoA. I wrote them off as just that...rumor...but S&P calling out the park by name is certainly unusual.

I agree with you Jeff, the combination of the two parks was a critical decision and one that has proven to be a mistake in my opinion. I still go back to that spring when the sale occurred and Sea World took off with the whales and most of the dolphins. That would be like Geauga Lake getting rid of what was then their 4 rollercoasters. That side of the park became a ghost town but they still had all of the expense.

I really think they should have stripped down the staffing, shuttered the place for the season, and done some due diligence to see what the real effects of combining the parks would be. Then, they also would have had time to find out if they were getting a whale or two. They still only have the one, right?

Geauga Lake was a success in large part because of the lower ticket price. There was an alternative to the more expensive Cedar Point. Now, they are trying to go head to head with the Point and the winner is painfully obvious.

Some big changes need to be made at WoA and it will be interesting to see what happens.

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Wednesday, October 29, 2003 4:49 AM
I believe that cedar point has turned themselves into a destination rather than just your average theme park. Around here, I dont know too many people that actually plan a vacation to SFGAm (I can only speak about the Chicago area). So if there is bad weather, a regional park will see a bigger hit than a destination park just due to the destination park having guests at its hotels that will show up reguardless. That being said, I too am tiring of the weather excuse. If the whole industry experienced crappy weather, then it shouldn't be an excuse.
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Wednesday, October 29, 2003 5:20 AM
Actually Wahoo, with Onceler's comment as CP turning into a destination (I tell people who care that they're trying to turn Sandusky into the Disney of the North) perhaps SFWoA's "market" will open up a little more. If CP makes a flat ride and coaster expansion in the next year or two in addition to possible winter attractions and hotel expansions, then the Cleveland area will sort of become a quasai-Orlando where if I'm not mistaken, a large thrill park with things to see in addition to the rides, if not harmoniously, then at least profitibly (sp?) coexists with a major destination resort. Sure, there's not the rides comparison (until Disney builds an Arrow Fishook off the Magic Kingdom castle) but you need to have a "day" spot for those who have $200 and 1 Saturday to spend at the park, as opposed to the $500 for a full weekend at the Point.
Maybe by what seems like sheer dumb luck, SFWoA has put themselves in a position to attract the crowds who find CP as a destination too expensive for one day if and when CP expands to that point. Plus as AJ said in his TRs right now, SFWoA is a great place for 3-generation families more so than CP - all the shows for the grandparents close together at Sea World, all the kids activities close together in Boomtown, and all the thrills close together for the teens and parents at old Geauga Lake.

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Brett
Resident Launch Whore

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Wednesday, October 29, 2003 5:49 AM
While the summary above is a little misleading, after reading the article and talking to other people I wouldn't be worried at all over SFWoA. They are on the right track. Is it not easy? Of course it's not easy combining two parks. The biggest and last hurtle I understand they are trying to overcome (inside the park wise) is the two seperate parking lots, and what to do with them. There are still things (as we all know) that SFWoA is working on. But those who have went this year know, that SFWoA is improving (and so does Six Flags.) SFWoA and CP are really going to start helping each other out in the long run as others have said already.

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"The Future of Roller Coasters"
-RollerCoasterGod
Haunted Ohio Parks...you've been warned!!
*** This post was edited by RollerCoasterGod 10/29/2003 10:49:53 AM ***

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Wednesday, October 29, 2003 6:10 AM
Jeff's avatar It's bad enough when a company uses EBITDA as a measure of success, but it's even worse when that goes south too. The "hurtle" as you put it has nothing to do with parking lots. The problem is much bigger than that, and frankly I would say that what they have today and how they operate has nothing to do with it either.

The issue in Cleveland is one of perception, both in terms of value and public opinion. The public opinion part can heal over time if they continue to offer a better experience, but the value proposition isn't straight-forward at all.

Look at the difference in marketing here. Cedar Point plugs rides, family shows and good times. They don't talk about the gate price ever, with the exception of the spring Pepsi promo, and even then only as a five-second tag to TV spots. What do I see for Six Flags? Spot after spot about season pass sales and the "three parks for one price" nonsense. Do I hear about the rides? The shows? The whale? (Which really needs a companion post-haste.) The family attractions? The marketing sucks because it doesn't sell the park, and it never has. You can't sell on price alone because that's not an incentive. People want to feel good; the price is secondary to that.

As they fix the way they operate, it becomes less about the product and more about the presentation.

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Jeff - Webmaster/Admin - CoasterBuzz.com - My Blog
Blogs, photo albums - CampusFish
What time does the water show start?*** This post was edited by Jeff 10/29/2003 11:11:32 AM ***

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Wednesday, October 29, 2003 6:20 AM
Personally, I thought the marketing did a heck of better job then the disaster last year. They did an excellent job at showing people what they have (instead of comparing to CP). They showed EXCELLENT views of Hurricane Harbor, Rides, Wildlife, Shouka (who yes, still needs another whale...BAD). They excited the mind with all that feel good stuff this year, and then added at the end, "One Price." This year they even did a great job with all the seasonal changes. They released commercials for Octoberfest, and Fright Fest, both of which I felt captured the park very well.

From the looks of the park (people wise) after visiting 40+ times I would say they reached their goal. Problem being (as stated above). Early season Ohio weather.

Coaster or not next year, IMO, as long as the park keeps training their staff well, maintains the park well, keep adding all the GREAT landscaping (all of which they have done this year,) It will come out of the black.

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"The Future of Roller Coasters"
-RollerCoasterGod
Haunted Ohio Parks...you've been warned!!


*** This post was edited by RollerCoasterGod 10/29/2003 11:28:02 AM ***

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Wednesday, October 29, 2003 7:51 AM
I think wahoo skipper had a really good point about Geauga Lake. Two of the reasons I used to love the park so much were proximity to where I live and price. Even as a teenager, I knew Cedar Point was a better park, so I almost thought of going there being a luxery. I could more easily and more affordably get to Geauga Lake, where I could still have a lot of fun, but without the hassles of driving an hour and a half and a higher gate price.

Since 2000, SF has tried to turn SFO/SFWoA into a mega park, which I never saw it as. Geauga Lake was a nice smaller amusement park, which had some great rides and a water park, for a competative price. Now, they added to the rides, but the park to me has become a dump. It just isn't as much fun as it used to be. The SF culture has ruined the park, and they have a long way to go to fund their niche in the Cleveland market.

Jeff, I think you had a good point about the combined gates. That was probably not a good move, and it probably cost them some serious potential profit.

For me, I just don't like the atmosphere there. If they simply improve the atmosphere, they should see some customers return. Otherwise, they are SOL, because atmosphere and perception are very important in this type of business, as stated by Jeff.

-Sam
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Avalanch Run - My first Roller Coaster.
Magnum XL-200 - The BEST Roller Coaster!

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Wednesday, October 29, 2003 7:54 AM
The marketing ploy of "we drove past Cedar Point" was just a disaster.

I went to SFWOA in 2000, and 2001, and was treated so terribly I vowed never to return. In 2002, we took the students I teach on a field trip there instead of the traditional Cedar Point trip. The customer service was crap, the kids got terribly lost with the ass-backwards signs, (and lack there of), and the staff was as useful as my big toe.

My days of SFWOA are over, (regardless of whatever they build in the future). The damage has been done, and I would gladly spend a couple more hours in the car to get to PKI, then to stop in Aurora any time soon.

-Michael

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Wednesday, October 29, 2003 8:26 AM
My other favorite part of the article is "Season pass sales and group bookings have been down, reflecting both the difficult economy and decreased school outings as a result of budgetary constraints, and policies restricting travel related to terror alert levels."

Really? While working at Cedar Point this summer, I THOUGHT I saw an INCREASE in busses AND corporate parties. Interesting how the TERROR ALERTS only have an impact in Cleveland.

-Michael

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Wednesday, October 29, 2003 9:13 AM
Jeff's avatar You're entitled to your opinion, Matt, but after being in some kind of marketing-related business for the last eight years, mine is that the marketing was ineffective crap. Showing shots of the rides and aerials of your water park isn't marketing, it's a slide show (frequently of other parks' rides at that). The October spots are worse, with a bunch of distorted images and more graphics and text. Total crap. It's easy for you to say that it "captured the park," but you've been there 40 times this year. I didn't go at all and those spots offered no compelling reason to go.

Compare this to, say, Disney, and the way they plug their parks. They have the additional burden of getting your ass to Orlando. They don't advertise price, ever. They appeal to your sense of youth, to good times and the universal recognition of the damn rat.

CP dropped much of their advertising this year due to the Dragster problems, but last year's campaign was brilliant, combining the family-oriented aspect of the ice show (with the obligatory kids hugging Snoopy) and the teenagers who had to ride Wicked Twister. They identified two demos and went after them emotionally, not after their pocket books.

Marketing is not rocket science. Six Flags does not sell a groceries or sneakers, they sell good times. Hell, even Nike and Coke sell good times, not the actual merchandise. Hopefully, the new agency the company hired has something else in mind that's as clever as the old Timex and Klondike campaigns they did.

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Jeff - Webmaster/Admin - CoasterBuzz.com - My Blog
Blogs, photo albums - CampusFish
What time does the water show start?

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Wednesday, October 29, 2003 9:29 AM
rollergator's avatar Bottom line for me is this: A good marketing scheme/ploy MAY very well get a family to show up at your gates....ONCE! After you've got them there, show them a good time, or they'll go somewhere else next time.

SF can advertise whatever they want, if families don't come back (with aunts, uncles, grandparents, and neighborhood kids in tow), then you only have ONE shot at their wallets....
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Mistakes were made, others are to blame...

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Wednesday, October 29, 2003 11:55 AM
I have heard that there may be some changes in management at WoA. There certainly areas for improvement.

Your point is well taken gator. In this business you can't live by the moto, "If you build it, they will come." SFWoA has done quite a bit of building in the past five years but it hasn't necessarily translated into bigger numbers.

There are a lot of local guests who SF needs to win back by fixing the guest experience on many levels.

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Thursday, October 30, 2003 11:25 AM
I just wanted to piggy back on what Jeff was saying about the marketing... I live in Seattle. We just got a new coaster at our SF owned park (Timberhawk). EVERY brochure, EVERY TV spot, EVERY advertisement I saw for this new ride showed pictures of... ROAR!

And when you look at every ad for Enchanted Parks, you see pictures of rides that are not even there... This is not limited to EP, I've never seen a park specific SF ad that didn't use footage from other SF parks. And yes, every ad hypes the "season pass" rather than the experience.

Having held a season pass for three years, let me tell you, price isn't everything. Rides that need paint jobs BADLY, Idiot ride ops, and one train operation to "save wear and tear"... yeah, whatever.

Not that there are not good SF parks. SFOT is great, and Marine world doesn't completely suck either.

As for SoCal? I hear the fires are getting close to Magic Mountain... Good, maybe they'll burn the graffitti off the rides. Give me Knott's Berry Farm any day of the week. I mean, let me tell you something really cool... my wife and I went there and as we were going into the parking lot, the attendent said "Hey, do you have your subway coupons?" We're like "Um, no?" The attendant HANDS US two coupons good for half price admission! HOW COOL IS THAT? We're a bit big, and figured we didn't have a shot of fitting into the Xcellerator seats... the ride ops said, "Well let's try anyway shall we?" Six rides each later we sent a great big Kudo to the park manager.

It's all about customer service - if you have it, folks will come back, if you don't they won't. If I didn't hold a season pass for SF parks, there is NO WAY I would go. They simply aren't worth it.

-Escher

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Monday, November 3, 2003 1:31 PM
Speaking of the Cleveland park, I for one have been there only four times. And that's in the past two seasons. I bought a season pass, and a parking pass, regretedly, this past season thinking I would use it more - I mean, c'mon, I can visit the park 5 times in a season...rrrright. I used it three times and every time I was there I was very disappointed. First was opening day when they couldn't deliver on S:UE because it wasn't even on the track yet, then there was one train opperation on X-Flight while the other train sat in the grass, and thirdly, I'm still trying to figure out why B:KF continuously stacks in only two train opperation! I went back later in the summer to find a crowded park...and again S:UE not running. I left after about 3 hours. Lastly, I figured I'd go on the last saturday of the season, figuring every ride would be open...and what do ya know, S:UE, not even lit up, is closed - and that really ruined the evening. Christa and I left after a half hour. Needless to say I will not be going back to the park again. Not until they do something about their whole opperation.

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Michael McCormack
Magnum Count: 933 TTD Launches: 18 for 18

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Monday, January 12, 2004 11:44 PM
There is one glaring problem with the weather excuse: SFWoa is in Northeastern Ohio. It is rainy every spring. It is rainy every fall. There's no getting around that. Bad weather is expected, and it does not vary much year-to-year. Other parks might be able to blame the weather occasionally because other parks actually have years without much rain sometimes. But Cleveland is one of the rainiest cities in the country as the lake effect drenches the city year after year after year.
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