Jump to content
  TPR Home | Parks | Twitter | Facebook | YouTube | Instagram 

Six Flags May Not Survive 2009...


Recommended Posts

@ the ghost -- it's generally agreed that Pooh didn't fail because it was an old character (in fact, it was put in because he's one of Disney's most popular properties) but because the ride itself just isn't that good. Before the new movie, Indiana Jones was an old property, and that ride has held its own very well. And Pirates of the Caribbean was one of the most popular attractions there before the films, and it had been the for a long time by that point.

 

It's almost impossible to tell what will work versus what won't.

 

@ KDCOASTER FAN -- The thing though is that if the water park is the driving factor behind people coming to the park, and the park gets a new water slide then that is a good investment for them. Maybe new Six Flags has decided that they don't want to try to compete on coasters because of the surrounding area, but they can have the best water park around.

 

That doesn't necessarily synch up with your thoughts, but they are still doing something.

 

--

 

And as for attractions getting added every X years, Disneyland is a great example with the last major attraction being IJ, and Nemo while it is different wasn't a huge change. During the 50th Anniversary, Disneyland advertised that they were 50 years old and had gangbuster attendance basically the entire time on the back of nothing.

 

And that was in a very competitive market, with other parks who did add things that year.

 

There is no "golden bullet" ride that if you install one, your attendance will go up by XX%. It just doesn't happen. And when you're talking about adding a roller coaster package that costs $20 million, you're saying that at a $40 per head cost to come to the park you need an additional 500,000 *just to break even* on that addition.

 

In a larger park well established, getting a ride or a parade or whatever for $5-10 million isn't a bad gamble, and then you add to that the fact that people will probably spend more on average at that park.

 

A $20 million ride at SFA would take a 500,000 increase in guests. What would that be, probably like 25%-33% increase year over year?

 

A $10 million ride at SFMM (and let's say their average price per guest since they are bigger is $50) would require an increase of 200,000 guests, or less than what I assume is 10% of their attendance each year.

 

To me, it makes *total* sense why they are betting on smaller $1-5 million rides and attractions at parks like SFA and SFKK right now. It is a plan for slow growth that brought many of the large parks to what they are today, and is sensible for a company to do, unlike the last management that figured a $20-$50 million addition to a park was a good idea.

Link to comment
Share on other sites

  • Replies 213
  • Created
  • Last Reply

Top Posters In This Topic

Yeah, I saw this on Yahoo this morning.

 

 

As for Six Flags, I kind of feel that they may be jumping the gun a bit. I actually think 2009 may be a good year for them. Why??? Because people will most likely not be travelling as much, and the local people close to Six Flags are still going to want to do something, and the price is good.

 

 

In the past recessions that had taken place over the years that would be the case. This year? Well I have to wonder about that. The big thing to remember this time around is that there is a lot of media out there who feel people shouldn't waste their money on theme parks. Between telling people " YOU WILL GET LAID OFF...no its not a maybe but YOU WILL BE FIRED", or reporting every day about where some company is laying off hundreds or thousands of employees or even point blank "..don't do theme parks", I can't see how any of this would benefit anyone.

 

My husband is a big fan of radio station 700 WLW in Cincinnati and just this past weekend he was telling me that some host on WLW was telling listeners to avoid "money wasting garbage" such as Kings Island, Coney Island, SFKK and Cedar Point while in Denver, KCNC-TV channel 4 recently held a "town meeting" talking about our current "Great Depression" and how to survive through it and one of KCNC's ideas was "..this year don't do Elitches, Lakeside and Waterworld..instead take in a cheap movie or go bowling...just spend as little money as you can this year.."

 

San Diego's Belmont Park...a lot of people aren't spending money there because KGTV and KFMB television are telling people they have an excellent change of getting fired from their jobs this year..so....don't spend your money on things you could live without. An employee from Belmont told me that was the case.

 

This really is a media recession. Kindamakes me wonder just really how bad the economy really is? But either way, the constant talk on "Eyewitness News" ( or whatever ) about layoffs, people killing themselves over a lost job, why we should NOT spend money and so forth...I can't see how any of this is good for any theme park.

Link to comment
Share on other sites

^ Excellent post. I appreciate the explanation with hard facts and figures, and when you explain it that way it makes a lot more sense.

 

Thanks! It's not like I actually have anything to do with installations, it is I have just always found it interesting what parks pick and how they do with it. I once read something by Harrison Price who was a consultant to a bunch of these parks, and he basically said the exact same thing.

 

Premier Parks blew everyone's mind in the early part of this decade because they installed huge things year after year. But they didn't upgrade infrastructure to secure long term growth, they just made a big splash but then expected attendance to go to near impossible levels to offset them.

 

Just as a for instance, the "Flagging" of Geagua in 2000 was a $40 million dollar ride package. To make up for that, if the average guest spend $40 per visit, they would have needed an increase of ONE MILLION guests through their doors to make up for it. That's before even thinking about operating costs (which would go up with a million more people), cost of goods sold (also would go up) and so on.

 

If I'm not mistaken, I read somewhere that Geagua pulled in just under a million in attendance before 2000. So, they would have needed to MORE than double their attendance in one year to pay for it.

 

SFA's installations where the same sorta thing, although cheaper. And I believe I've also read that SFA's attendance was similar.

 

So we're talking about a necessary doubling of a park's attendance to justify the ride package they just received. Unlike spreading that over a normal period of time (say six years, with a coaster every two years), they did it in one and then didn't get a return, so they added more coasters to those parks.

 

Superman in 2000, Batwing in 2001. I'm assuming the total ride package had to be about $60-70 mil during this period, which means that spread over the three years, SFA would have had to have seen a bump of 500,000 guests every year for it to break even (at the $60 mil level with estimated spending at $40 / guest). Instead, by adding all these coasters and completely neglecting things other people care about like concert series, and water slides, and family rides, they catered to a small group of people and I sincerely doubt the return on investment was anywhere close to where it would have been if they had been smarter.

 

Six Flags doesn't *owe* anyone any new rides nor coasters anywhere. They install what they feel makes sense at their locations as best as they can now, and unlike the installations at SFA and SFO, their current installations cater to the *entire* market (not just coaster lovers) and have a much more realistic swing in visits to pay for them.

Link to comment
Share on other sites

I just made a "Save Six Flags!" group on facebook that encourages people to go to their local Six Flags parks this year, and if possible, to buy a souvenir or meal in the park - just to help however they can. If you're interested you can join and help get the word out.

Link to comment
Share on other sites

 

@ KDCOASTER FAN -- The thing though is that if the water park is the driving factor behind people coming to the park, and the park gets a new water slide then that is a good investment for them. Maybe new Six Flags has decided that they don't want to try to compete on coasters because of the surrounding area, but they can have the best water park around.

 

That doesn't necessarily synch up with your thoughts, but they are still doing something.

 

--

 

And as for attractions getting added every X years, Disneyland is a great example with the last major attraction being IJ, and Nemo while it is different wasn't a huge change. During the 50th Anniversary, Disneyland advertised that they were 50 years old and had gangbuster attendance basically the entire time on the back of nothing.

 

And that was in a very competitive market, with other parks who did add things that year.

 

There is no "golden bullet" ride that if you install one, your attendance will go up by XX%. It just doesn't happen. And when you're talking about adding a roller coaster package that costs $20 million, you're saying that at a $40 per head cost to come to the park you need an additional 500,000 *just to break even* on that addition.

 

In a larger park well established, getting a ride or a parade or whatever for $5-10 million isn't a bad gamble, and then you add to that the fact that people will probably spend more on average at that park.

 

A $20 million ride at SFA would take a 500,000 increase in guests. What would that be, probably like 25%-33% increase year over year?

 

A $10 million ride at SFMM (and let's say their average price per guest since they are bigger is $50) would require an increase of 200,000 guests, or less than what I assume is 10% of their attendance each year.

 

To me, it makes *total* sense why they are betting on smaller $1-5 million rides and attractions at parks like SFA and SFKK right now. It is a plan for slow growth that brought many of the large parks to what they are today, and is sensible for a company to do, unlike the last management that figured a $20-$50 million addition to a park was a good idea.

 

Not exactly....as anyone will remember when SFA was known as wild world in the early 80's attendance was dismal for the simple fact that the park's owners were not willing or able to add new rides to the park & with KD 2 hours away constantly adding new attractions it stole what little interest the local market had & the park actually went bankrupt & would've been demolished had premier not purchased it in 91.Premier actually added new rides on an annual basis thus renewing local interest in the park & creating a surge in attendance figures but shortly after changing the park to SFA the influx of new attractions dropped off sharply by 2002/2003 & the ONLY reason they continued to focus on the waterpark on an every two to three year basis was not due to popularity but due to cost.It was more cost effective to add cheap slides rather than adding even a small coaster or flats package & as a result attendance has fallen off sharply in recent years.

 

Not everyone likes waterparks(including me) so that's why I stopped going to SFA when they added t hat lame tony hawk slide last season when they could've done better by adding at least a flat or two to replace the ones the park has lost over the years.

Link to comment
Share on other sites

 

 

Not exactly....as anyone will remember when SFA was known as wild world in the early 80's attendance was dismal for the simple fact that the park's owners were not willing or able to add new rides to the park & with KD 2 hours away constantly adding new attractions it stole what little interest the local market had & the park actually went bankrupt & would've been demolished had premier not purchased it in 91.Premier actually added new rides on an annual basis thus renewing local interest in the park & creating a surge in attendance figures but shortly after changing the park to SFA the influx of new attractions dropped off sharply by 2002/2003 & the ONLY reason they continued to focus on the waterpark on an every two to three year basis was not due to popularity but due to cost.It was more cost effective to add cheap slides rather than adding even a small coaster or flats package & as a result attendance has fallen off sharply in recent years.

 

Not everyone likes waterparks(including me) so that's why I stopped going to SFA when they added t hat lame tony hawk slide last season when they could've done better by adding at least a flat or two to replace the ones the park has lost over the years.

 

It also didn't help that Wild World back in the 80's didn't exactly have a good reputation. Back in 1984 ( give or take a year or two ) a young girl drowned in the Wild World wave pool. If that wasn't bad enough, Washington's channel 5 actually showed the body on their 10:00 News floating in the wave pool ( the girl died wearing a Garfield the cat bathing suit ). Of course Channel 5 got some flap showing that but still it gave the "idea" to many folks that Wild World simply wasn't safe. Come to think of it I believe that was the reason why Splashdown Waterpark in nearby Manassas, Virginia was built. To provide a "safer" waterpark. Even though I am pretty sure that place had a few drowning incidents of their own over the years.

Link to comment
Share on other sites

 

 

Not exactly....as anyone will remember when SFA was known as wild world in the early 80's attendance was dismal for the simple fact that the park's owners were not willing or able to add new rides to the park & with KD 2 hours away constantly adding new attractions it stole what little interest the local market had & the park actually went bankrupt & would've been demolished had premier not purchased it in 91.Premier actually added new rides on an annual basis thus renewing local interest in the park & creating a surge in attendance figures but shortly after changing the park to SFA the influx of new attractions dropped off sharply by 2002/2003 & the ONLY reason they continued to focus on the waterpark on an every two to three year basis was not due to popularity but due to cost.It was more cost effective to add cheap slides rather than adding even a small coaster or flats package & as a result attendance has fallen off sharply in recent years.

 

Not everyone likes waterparks(including me) so that's why I stopped going to SFA when they added t hat lame tony hawk slide last season when they could've done better by adding at least a flat or two to replace the ones the park has lost over the years.

 

It also didn't help that Wild World back in the 80's didn't exactly have a good reputation. Back in 1984 ( give or take a year or two ) a young girl drowned in the Wild World wave pool. If that wasn't bad enough, Washington's channel 5 actually showed the body on their 10:00 News floating in the wave pool ( the girl died wearing a Garfield the cat bathing suit ). Of course Channel 5 got some flap showing that but still it gave the "idea" to many folks that Wild World simply wasn't safe. Come to think of it I believe that was the reason why Splashdown Waterpark in nearby Manassas, Virginia was built. To provide a "safer" waterpark. Even though I am pretty sure that place had a few drowning incidents of their own over the years.

 

Funny you should mention splashdown waterpark CathyJ as it's RIGHT down the street from me & is about a 10 to 20 minute bike ride from home.

 

Still the park's reputation did improve during the premier ownership but once again has since gone downhill thanks to SFI's total mismanagement & lack of expansion at the park.

Link to comment
Share on other sites

I think there is only two ways to go, either low profit parks will begin to close or Cedar Fair will buy them out and will become a monopoly in the theme park business.

 

Cedar Fair is in no position to buy any parks, especially low profit ones. They had enough fun with Geauga Lake and they are looking to sell parks themselves.

Link to comment
Share on other sites

^Not that agree with CF buying anything now, but if SF gets desperate enough, CF can restructure their own debt (admit it, their in at least a better ship than SF) then a sale of one or two MAJOR parks could happen. Of course this is all hypothetical, and is in all likeliness the last possibility of several to actually happen. What will most likely happen is CF will rebound, SF will find some way to stay afloat and end up in the same situation 15 years from now, and in the meantime we'll all go back to arguing over how much that rides that haven't opened or even been built yet underdeliver.

Link to comment
Share on other sites

Here is an update on what S&P thinks.

 

Standard & Poor's Ratings Services said Six Flags Inc. (SIX) could seek a prepackaged or prearranged Chapter 11 bankruptcy reorganization as the rating agency assigned the theme-park operator a rating slightly above default.

 

S&P set its corporate credit rating at CCC, or highly speculative. The outlook is negative.

 

Credit analyst Andy Liu said Six Flags could seek bankruptcy protection to reduce its high debt leverage and significant near-term maturities, though an out-of-court restructuring also is possible, based on public comments from Six Flags management.

 

S&P noted that Six Flags, which has 120 roller coasters and more than 25 million visitors a year, is required to redeem its preferred income equity redeemable shares for $318.8 million by Aug. 15. If it is unable to refinance or restructure the PIERS by then, the company would default on its credit facility, permitting lenders to accelerate the obligations. An acceleration would cause other debt maturities to accelerate as well.

 

The outstanding balance on the credit facility totaled about $1.1 billion as of Dec. 31, and nonbank debt totaled $1 billion.

 

"Based on the current state of the economy and the credit markets, we believe it is unlikely that Six Flags will be able to refinance the PIERS prior to their mandatory redemption date," S&P said, though it noted that Six Flags is exploring alternatives.

 

The world's largest regional theme-park operator has been riding a financial roller coaster in recent years. It was forced to sell seven parks and lower prices to keep business running in 2007. Since then, it has focused on luring families, selling noncore assets and signing exclusivity deals with vendors.

 

Earlier Thursday, S&P withdrew its ratings on Six Flags at the company's request. It then issued the rating at the same level on an unsolicited basis, meaning S&P was not paid for the rating.

 

Last month, all three major rating agencies downgraded the company after it said in a regulatory filing that its auditors warned there is "substantial doubt" about its ability to survive without a restructuring of its debt.

 

In early March, Six Flags reported its fourth-quarter net loss widened on tax-valuation and hedging impacts, but revenue and attendance grew on strong Halloween and Christmas results.

 

Its shares recently traded at 27 cents, down 3.6%. The stock traded near $12 in early 2006 but has been falling steadily since the summer of 2007.

 

-By Kathy Shwiff, Dow Jones Newswires; 201-938-5975; Kathy.Shwiff@dowjones.com

 

(END) Dow Jones Newswires

 

April 02, 2009 15:25 ET (19:25 GMT)

Link to comment
Share on other sites

We already knew that is could happen. It is really up to the bondholders at this point, Six Flags is doing the best they can do and it is starting to pay off so as long as they can hold on a little further. I imagine if we make it to June (should be their next earnings call) they should be able to report good things (hopefully) and they'll be able to restructure out of court.[/i]

Link to comment
Share on other sites

Sell sixteen, keep four.

 

Keep SFMM, SFGAdv, SFGAm and SFOT. That way you have a park in each region of the United States, not to mention some of the most profitable in the chain (although SFOG looks to be pretty good).

 

It's just my thought, but you could easily make a lot of money selling all of the smaller, less profitable parks and keeping the bigger parks to keep their operations lean and mean.

 

Oh, and while we're at it, Cedar Fair, please sell KBF to a person who knows the history behind it and doesn't want to turn it into just another coaster park. Seriously, it was cool for a while but history prevails and Knott's needs to find that magic again.

 

Sincerely,

R.C.

Link to comment
Share on other sites

If SF decides to sell its parks off, I can see them keeping only the flagship parks, SFGAm, SFGAdv, SFMM and the original parks SFOT, SFOG, SFStL.

 

Oh, and while we're at it, Cedar Fair, please sell KBF to a person who knows the history behind it and doesn't want to turn it into just another coaster park. Seriously, it was cool for a while but history prevails and Knott's needs to find that magic again.
CF could sell it to Disney, but considering its still highly profitable for CF, I doubt that.
Link to comment
Share on other sites

You basically lose everything if they go under and you are a common stock holder. In rare cases it is possible for a company to offer some kind of equity if they plan to come back but the company ownership goes to whoever owns their debt. If SFI goes under they would become owned by the current major bond holders and it would be up to them if they wanted to keep current management and try to come back or break the company into smaller pieces. Eventually the company would probably offer publicly traded stock again but you'd have to buy back in for full price.

Link to comment
Share on other sites

Thanks. I have been considering buying stock at these low prices, but with the threat of bankruptcy hanging overhead it really is a gamble. If I could buy stock at this price and the managment pulls it off the payoff could be HUGE! But on the other hand if they file bankruptcy it would all be gone.

 

This kind of reminds me of how I used to play roulette. I would walk up the the wheel and place $500 on black, sometimes I would double my money other times I would lost it all.

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
 Share

  • Recently Browsing   0 members

    • No registered users viewing this page.

×
×
  • Create New...

Important Information

Terms of Use https://themeparkreview.com/forum/topic/116-terms-of-service-please-read/