Why Geauga Lake Cannot Survive as Part of Cedar Fair

Saturday, June 2, 2007 5:19 PM
So, Coasterdad, you are defending your implication (or at least perceived) that the smartest thing to do in every situation and in every industry, regardless of any other factors, is to purchase the competition?

Hmm...

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Saturday, June 2, 2007 5:30 PM
^Nobody is suggesting that buying out the competition is always the right strategy in every instance and every industry and every market. Read the posts, nobody is saying that.
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Saturday, June 2, 2007 5:43 PM

matt. said:
^Although I believe Kinsel said as much that he strongly regretted not buy GL when they had the chance the first time. The ownership went like

CF->Six Flags->Premier Parks->?->Independent ownership

Am I missing one in there? This is kinda before my time.


Funtime is the company that owned Geauga Lake before Premier Parks. They also owned Darien Lake and Wyandot Lake until they sold the chain to Premier Parks.

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Saturday, June 2, 2007 7:43 PM

Coasterkid200 said:
Abercrombie owns Hollister. On another note Cedar Fair bought GL because it was dirt cheap, not because they wanted to get rid of the competion.
Dirt Cheap? 144 Million isn't Dirt Cheap...
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Saturday, June 2, 2007 8:05 PM

Jeff said:
Yeah, I see the long lines at guest services filled with people who think the park isn't crowded enough.

You are absolutely correct. I also don't see lines at rides, or food stands, or show entrances because... oh right, nobody is there at all. Standing in line for a ride for an hour sucks but having ridden Big Dipper on every visit this season (3 visits) and not having a full train (even with one train operation) is kind of sad.


Jeff said:
Meanwhile, I'll go back to the park and have a good time. Maybe if you spent some quality time there you'd see other people are doing the same.

I think I have spent plenty of time at the park. I have been visiting annually since I was a kid and I have been a season pass holder since Six Flags worlds of Adventure in 2001. The park was a lot different in the 80s and 90s; not just in what attractions were there, but in what the atmosphere of the park was like. I will continue to visit because my daughter likes to play in the kids area and gets excited when she sees life-size Peanuts characters. Just because I haven't started boycotting the park doesn't mean I'm not worried about the park I love, either.


matt. said:
You're backtracking. First GL could not "survive" as part of Cedar Fair which I took as...like...not stay open.

Now you're saying it may be a good business decision to operate on a smaller, more profitable business scale, but you just wouldn't care for it because smaller crowds are boring.


Cedar Fair has a financial incentive to remove rides, take away shows, cut costs and increase prices. Cedar Fair could liquidate all the rides in the park, move them to their other properties and sell-off the land. In a scenario like this... Cedar Fair is still thriving but Geauga Lake is, well, not. Big companies often spin-off or get rid of the weakest parts of their business.

I honestly believe the reason people keep misunderstanding my argument is because there is an assumption that Cedar Fair wants to grow revenue and attendance at ALL of their parks. After 3 years I believe that they have moved to a strategy of loss-trimming at Geauga Lake. Yes, they added Wildwater Kingdom in 2005 and 2006, but it is not what was originally planned or advertised. And following the Paramount acquisition (a key turning point for the company) Cedar Fair seems to be uninterested in investing in Geauga Lake's growth. Rather, they seem content with cutting their losses and keeping business at Cedar Point and Kings Island strong. In the short term this hurts the atmosphere and takes away from the guest experience.

In the long term, it might be a "good business move" to get rid of Geauga Lake altogether. Now that Cedar Fair is valued as $1.6 billion company, Geauga Lake is only a tiny piece of the pie. With a balance sheet riddled with long-term debt, it might make a lot of sense to get rid of the weakest parts of the company at some point.

*** Edited 6/3/2007 12:09:23 AM UTC by Paul Blackstone***

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Saturday, June 2, 2007 8:09 PM
What exactly was originally planned and advertised? *** Edited 6/3/2007 12:10:15 AM UTC by matt.***
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Saturday, June 2, 2007 10:16 PM

Infamy said:
So, Coasterdad, you are defending your implication (or at least perceived) that the smartest thing to do in every situation and in every industry, regardless of any other factors, is to purchase the competition?

Hmm...


If you honestly thing that I am saying there is one solution to every situation, you need to go back and read the whole thread.

This is not the place to play expert unless you are one. Am I an expert on the amusement industry? No. But some business truths are universal. You can learn all the theory you want as an undergrad. Hell, I am creating theory in my doctoral work, but without practical application, theory is just a bunch of words that will get high marks in school and a rude awakening in the real world.

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Saturday, June 2, 2007 10:27 PM
CoasterDad:

While I may have come across as rude or arrogant, that was not my intention. I certainly got from your post that you were implying that it was an absolute solution to improve revenues in all situations. Could I have interpreted incorrectly? Absolutely.

You have assumed that you have a higher education than myself and that is a correct assumption. One of the things I like most about business is that there are few problems where there is one correct solution. I like the subjectivity of business and the diversity of business "theory." You may have more education and you may have more experience, but I disagree with you in your statement (at least my perception of your statement). But I do agree that there are situations where it is an acceptable method to increasing revenues.

I do not think that I am playing expert in any manner. The only reason that I even mentioned that I'm a business student is that you said it was a "buying the competition is a Business 101 way to make money." That is a statement I disagree with in some (perhaps even in most) situations.

:)
*** Edited 6/3/2007 2:28:16 AM UTC by Infamy***

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Saturday, June 2, 2007 10:59 PM
^No worries man.

You are correct that there are no absolutes in life - except death.

The idea of gaining a competitive edge by buying your competition is not new, but I will admit, it has been a very long time since Business 101 for me.

In the very specific example of GL, when CF bought the park they gained a strangehold on the Cleveland market. The purchase of PPI not only gave them a wider and more stable revenue base (adding more West and some South) it also gave them all of Ohio.

If you want to visit a park in Ohio (for the most part) Cedar Fair gets your money. That's a very powerful and very basic way to sat ahead.

Why do you think that many times when one company buys another within the same industry, the government gets involved. Nothing cures (or kills) competition more than a mononpoly. ;)

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Saturday, June 2, 2007 11:45 PM
Exactly! Monopolies are often ridiculous. That's why I believe strongly in competition! It gives incentive to get better rather than remain stagnant.

Cedar Fair does have a monopoly in Ohio, I believe, but I don't think the parks really compete all that much. There are specific markets within Ohio (Columbus, Cleveland) and Michigan (Detroit, etc.) where there is competition between the parks, but Cedar Fair won't really lose if they choose any of the parks. That's good for Cedar Fair, but in the long run, it may not be good for the customers.

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Sunday, June 3, 2007 6:12 PM

Paul Blackstone said:
I honestly believe the reason people keep misunderstanding my argument is because there is an assumption that Cedar Fair wants to grow revenue and attendance at ALL of their parks.
Assumption? That's crazy talk. You said yourself they had an attendance goal in mind, and that the company has said repeatedly they're not meeting it. I think people misunderstand your argument because it keeps changing.


Kennywooddude said:
Dirt Cheap? 144 Million isn't Dirt Cheap...
It was $145 million, and that was a steal. Six Flags bought the SeaWorld property alone for $110 million, and spent at least $40 million on new rides alone in 2000 and 2001. Add in the other tens of millions of dollars worth of assets and the Geauga Lake land itself, and that's a pretty serious bargain.
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Sunday, June 3, 2007 7:20 PM
But look what they got...a Cramped Waterpark, a ride side that needed MAJOR tlc and a vacant Sea World".
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Sunday, June 3, 2007 7:39 PM

Jeff said:

thecoasterguy said:
You may argue it this way, however when the success of your parks is commonly decided to be the stock price and how a single season of one park can affect it, Six Flags had success with WoA.

Are you kidding me?

No. The stock market looked at the first season of SFWoA as a success. On the other hand, the rest of the chain didn't do so well, and that is where stock prices went down.

Do you really think that the stock market of today thinks about intangibles like atmosphere and guest experience? No. They look at figures like attendance, per capita, and so on. SFWoA was a success from a stock standpoint, but Six Flags had enough other issues at the time that stopped it.


It was $145 million, and that was a steal. Six Flags bought the SeaWorld property alone for $110 million, and spent at least $40 million on new rides alone in 2000 and 2001. Add in the other tens of millions of dollars worth of assets and the Geauga Lake land itself, and that's a pretty serious bargain.

How much would an animal park really be worth without the animals? Sure, Busch might have sold it for $110 to Six Flags, but when you remove the animals and know that you would have HUGE issues getting them back (or do not plan on bringing them back at all), that makes the Sea World property basically useless except the land it is on.

I don't think that Cedar Fair got a super deal on it, nor do I think it was a "cash out" by any means by Six Flags. I think Six Flags did stupid deals up to that point, and when they went to sell it, they gave CF a fair price... Which just happened to be very low.

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Monday, June 4, 2007 12:30 AM
First of all, the stock price went down 2000 to 2001, and furthermore, the market was certainly not going to look at the performance of one park in the chain and react to that.

What are you talking about in terms of animals? Your statement is not clear, and irrelevant anyway. Busch took most of their marquee animals with them. Six Flags took an enormous loss selling that property and every thing on it.

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Monday, June 4, 2007 9:16 AM

Paul Blackstone said:
Cedar Fair has a financial incentive to remove rides, take away shows, cut costs and increase prices.

You say that like any other smart park operator wouldn't do the same. This has been said many times, Six Flags came in, threw up a bunch of rides and couldn't afford to keep the park in the long run. Its not Cedar Fair's or Geauga Lake's fault that the park was too big for the market it is in.


Paul Blackstone said:
Cedar Fair is still thriving but Geauga Lake is, well, not. Big companies often spin-off or get rid of the weakest parts of their business.

They could do that, but I really dont think they will. If they do I will be very dissapointed.

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