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Cedar Fair Corporate Development Discussion Thread (FUN)

P. 70: Cedar Fair unveils 2022 operating season plans

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http://www.cleveland.com/business/index.ssf/2010/05/restore_cedar_fair_dividend_la.html

 

Cedar Fair's largest shareholder on Wednesday urged the Sandusky-based amusement park company to reinstate the dividend that it stopped paying out to investors at the beginning of this year. Cedar Fair announced in November that it would eliminate its dividend in order to help pay down more than $1.6 billion in debt. At the time, the company was distributing a dividend of $1 per year, per share to investors.

 

Q Investments, the Texas-based hedge fund manager that owns 18 percent of Cedar Fair, said in a letter to the company's board of directors on Wednesday that it believes Cedar Fair can afford to pay at least half of that - 50 cents per share, per year - to investors beginning this year. "We believe a minimum of a 50 cent distribution is not only possible but also an absolute necessity and should be begun as soon as possible," Q Investments said in the letter. "The company owes this to the unitholders."

 

Q Investments pointed out that the company's profits in 2010 are projected to be similar to those in 2007, when it distributed $1.90 per share. The firm argued that reinstating a modest dividend would still allow the company to continue paying down its debt.

 

Cedar Fair could not be reached for comment on Wednesday.

 

Q Investment's request came a week after Cedar Fair agreed to allow the investment firm to nominate two members for the company's board of directors for terms ending in 2013. Cedar Fair said it would temporarily expand the board from seven to nine members. The company said it would then remove two existing members next year in order to reduce the board back to seven directors. Q Investments said the board needed "new blood" light of decisions that led to the company's failed proposed $2.4 billion sale to private-equity firm Apollo Global Management. The deal was called off April 6 because of a lack of shareholder support, which cost the company a $6.5 million penalty. Q Investments had opposed the deal and rallied other shareholders against it.

 

Q Investments says it hopes the board members it helps to select will be part of the company's debt refinancing discussions, and can work out a deal with lenders that ensure the company has the flexibility to bring back a cash distribution.

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The trash can complaint remains the lamest complaint I've ever heard.

 

It's not lame. Some people value aesthetics more than you do. And the concrete and trash cans motif is just plain ugly.

 

I'll continue to pay extra to travel to European parks where they actually care about how the park looks (Efteling, Europa, etc). If that's not your thing, that's cool as well.

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^BINGO! That's the way I see it, and I don't think I've ever heard a single member of the GP complain about "too many trash cans." I really just think that's yet another fabricated complaint by enthusiasts who have nothing better to do than nitpick the dumbest things to whine about.

 

Call me crazy, but I nitpick slow and/or unprofessional operations, outrageous food/parking prices, trash on the ground, and other things that actually affect my day while I'm at a park.

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^To many, aesthetics/atmosphere are equally as important as all those other things.

 

In fact, you made a comment bashing Six Flags for the El Toro train. So apparently aesthetics matter to you...when it's not bashing your employer?

Edited by Jew
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^I think there are plenty of negative things to comment on about CF (price and quality of food, pretty steeply priced season passes, their propensity for removing trees, etc.), but trash cans aren't one of them. If the GP can't find somewhere to put trash, they're going to throw it on the ground. It just makes sense. I realize that having a well-trained park services department can help in that case, but it's so much nicer when trash is prevented from hitting the ground in the first place.

 

As far as the El Toro thing goes, I understand SF is trying to make money, and I understand those ads bring in money. But up until now they've done it on coasters that suck and just have really no actual unique aesthetics about them. The whole pink/blue/whatever color wrap on a brown train is God awful, and it just defaces what is one of the best coasters on the planet. Sure, do it to GASM or even Rolling Thunder, but please leave the top 3 wooden coaster alone!

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^So if the logic is that it's OK to destroy the aesthetics of something as long as it "makes sense," how can you fault Six Flags (a cash strapped company fresh out of BK) for selling a sponsorship on one of their most popular rides? That makes sense too.

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CF does plently of things wrong, but the trash cans don't affect the park experience in the same way that factors like high food prices do, because they don't make the guest feel unsatisfied and ripped off. As for a park's apperance, the trash cans do virtually nothing the atmosphere, at least from my point of view. I certainly never noticed the large amount of trash cans when I went to Cedar Point as part of the GP, and I don't really notice them now as an enthusiast. I do however notice things like litter on the ground and other cleanliness issues. The trash cans (as do the sweeps) generally do their job well and keep pathes clean.

 

I think it's things like the immense amount concrete that stand out more. That's somthing I've always noticed at CF parks, and a lack of trees is very detremental to a park's atmosphere. I'm certainly a bit worried about the addition of Shoot the Rapids at CP, because they tore down a lot of trees in what is pretty much the only significant forested area on the penninsula. Besides the concerete, the lack of theming, worn buildings and faded paint also are signifcant eyesores which I find eye-catching.

 

It's the same way with the ads on coasters at SF. Execpt on the prehaps the most popular rides, which usually draw from visual factors to implore a bigger "experience" than sencondary attractions, they do nothing to take away from the apperance they are far less noticible, espically since there are already ads practicly everywhere else in the park.

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^^Because, as the poster just above me stated, I notice things like pink trains on a wooden coaster a lot more than trash cans. It seems the only people who bash the amount of trash cans are the SF lovers who will literally find ANYTHING to complain about with CF, while a LOT of people hate the El Toro trains. Sure, I can poke fun at how sometimes trash cans end up bundled together in odd ways at CF parks, but that's just more of the person organizing those trash cans being a moron rather than the all evil Cedar Fair influence.

 

Cedar Fair isn't perfect by any stretch of the imagination, but I'll never agree with the trash can haters, because as has been said by myself and now the poster above, trash cans hardly ruin the experience at a park. In fact, even as an enthusiast, I never notice where a trash can is until I need to throw something out. Other than that, I don't even look at them.

 

If the same group of people find a pink ad on El Toro a necessary thing also found the Intimidator stickers to be "tacky" or "cheap" theming, then I just have to go ahead and throw the "hypocrite" title out there for that group of people.

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^Pink trains on a coaster don't ruin the experience of that coaster. They just make it look worse (I'm not arguing that. I agree it looks like crap.) Sort of like a midway full of plastic trash cans taking away from an otherwise nice area of a park?

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The pink trains just make Six Flags look even cheaper than they already are (quite an accomplishment if you ask me). With the dirt cheap season passes that reduce the class of the clientele and turn their parks into advanced day cares, the recycled cookie cutter aspects of their parks, the INSANE amount of ads that just scream WE NEED MONEY AND WE DON'T CARE IF YOU KNOW IT, the back of their uniforms with witticisms like "my family comes here so don't litter," it was pretty difficult for them to look any cheaper. However, they managed to top themselves with El Toro and Kingda Ka.

 

We can agree to disagree on the effect of trash cans on the park experience, but at least Cedar Fair's parks still have identity and some semblance of dignity to them. I could go from SFOG to SFGAd to SFMM to SFOT to SFSL without ever realizing I was in a different park, save for the surrounding area that Six Flags doesn't control. It's the same cheap clientele, the same ride names, the same themed areas, and the same crappy operations (I'm sorry, asking the riders if they're ready to ride 100 times before dispatching doesn't do anything for me except annoy me and make me wait longer). Hell, even the park maps are all almost identical.

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^I know something I can find that is the same at every CF park too: trashcans everywhere!

 

I didn't mean for this thread to get so derailed. My point was simple: aesthetics are an important part of the experience to some people. To those people who find aesthetics important, having midways lined with plastic trashcans certainly takes away from the atmosphere of a park. I don't understand why this is such a hard concept to grasp.

 

You're only making yourself look like a hypocrite when you try to spin your bashing of Six Flags less than aesthetically pleasing sponsorships, while refusing to criticize your employer for doing something that many others find tacky.

Edited by Jew
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What about if the trash cans had advertising on them?

 

I see where you are coming from Joey. Maybe it's because I consider Cedar Fair parks to be amusement parks but the abundance of garbage cans doesn't bother me. I have to say if it wasn't for enthusiast websites, I still wouldn't even notice the volume of them.

 

Actually even with it being mentioned constantly on this site, I still don't notice it unless someone points it out.

Edited by larrygator
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^Which has been the point I've been making all along. Trash cans I don't notice. Pink trains on my #2 wooden coaster I do notice. If the Timberliners had shown up at Holiday World and been graced with Stride ads, I would have been just as angry about it, if not more. Ads on coaster trains are as cheap as it gets, no matter who is doing it. In this case it just happens to be the leader in cheapness doing it.

 

^^And I really think I've brought forth several criticisms of CF aside from the trash can thing, which I don't think is a problem at all.

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^Actually, you first wrote off ginzo's opinion as a complaint that "enthusiasts with nothing better to do" complain about. That's a lot different than simply stating you disagree. I only brought up your El Toro comment to point out how you are selectively picking and choosing what aesthetic elements bother you, since that was your rude response to ginzo when he brought up aesthetics.

 

At the end of the day, if I was running park...I wouldn't put horribly out of place ads on my coaster, nor would I line my midways with cheap plastic trash cans. Both look like crap IMO.

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the INSANE amount of ads that just scream WE NEED MONEY AND WE DON'T CARE IF YOU KNOW IT, the back of their uniforms with witticisms like "my family comes here so don't litter,"

SF is in debt...

 

but at least Cedar Fair's parks still have identity and some semblance of dignity to them.

Trash cans + concrete + and generic rides = identity? I don't think so...

 

It's the same cheap clientele, the same ride names, the same themed areas, and the same crappy operations (I'm sorry, asking the riders if they're ready to ride 100 times before dispatching doesn't do anything for me except annoy me and make me wait longer). Hell, even the park maps are all almost identical.

I could say the same about CF parks...

- I see the exact same clientele at CF parks as I do at SF parks.

- Like [insert element here]hawk, Drop Tower, Dominator, Flight Deck, etc... The names aren't that special. While SF has some generic names as well (Superman, Batman, Goliath) at least they sound decent.

- CF parks don't really have themed areas much since most of the theming isn't emphasized. Aside from a Peanuts themed land.

- I wouldn't say SF parks have crappy operations, at least compared to the early-00s.

- All the CF park maps look pretty much the same too.. I believe the only CF park maps that look different are KI and Carowinds since both still use the Paramount-era design. The other CF parks use maps similar to CP's map.

 

So yeah the advertisements on the trains may not look good aesthetically to some but then again, SF is in debt and needs to find a way to pay it off. Advertising is a perfect way to do this. Putting it on a popular ride like Toro gives the advertisement more exposure.

 

Since when does any corporate park have a unique identity? Even parks like DIsney/Universal have similar rides with similar themes throughout the chain. SF is no different. In fact, the original three SF parks, SFOT, SFOG, and SFOMA all had similar rides at opening (parachute drop, large wooden coaster, Arrow mine train, dark ride, Arrow log flume, etc...) and a similar theme (Six states). The only truly unique original SF parks were SF Autoworld and SF Power Plant.

 

This SF vs. CF debate is really getting stale.

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http://www.sanduskyregister.com/articles/2010/05/17/front/doc4bf0c8a1b9f67546833250.txt

 

Cedar Fair is still carrying a big load of debt on its back, and the deal with Apollo Global Management that was supposed to remove that weight collapsed in April. But Cedar Fair executives, who find themselves still running a publicly traded company, say they are moving quickly to fix the problem. Cedar Fair hopes to announce a method for dealing with the company’s debt when it hosts its annual meeting at 9 a.m. June 7 at the Sandusky State Theatre, two top company executives say.

 

Dealing the company’s approximately $1.6 billion in debt has been the top priority ever since a deal for Apollo Global Management to acquire Cedar Fair fell through, said Dick Kinzel, Cedar Fair’s chairman, chief executive officer and president, and Peter Crage, Cedar Fair’s corporate vice president, finance, and chief financial officer. Discussions on how to fix that are moving quickly, they said.

 

The next major task after dealing with the debt will be to figure out a succession plan for Kinzel, 69, whose current contract with the company expires in January 2012, Kinzel said. “You can’t hide the clock,” he said.

 

Cedar Fair executives are hoping for a turnaround year in 2010 at Cedar Point and the company’s other amusement parks. Cedar Fair has invested in new rides at its parks, but the season also will depend on factors that are out of the company’s control, such as the weather and the recovery of the economy, Kinzel said.

 

During an interview at his offices that lasted about 40 minutes, Kinzel discussed several other points. Among them:

 

* At the end of 2011, if Cedar Fair knows it had a good season, the board will consider resuming cash distributions in 2011. “It will be a very, very modest distribution,” Kinzel said. The goal is to make a small distribution to at least help unitholders with their tax liabilities next year, he said.

 

Q Funding, the company’s largest investor, last week urged that cash distributions resume immediately.

 

* Cedar Fair is no longer attempting to sell the Worlds of Fun park in Kansas City, Mo., and Valleyfair park in Shakopee, Minn. “The only reason we put those up for sale was to try to save the distribution,” Kinzel explained.

 

The future of the Great America park in Santa Clara, Calif., is less certain. Local officials are trying to put in a new football stadium next to the park for the San Francisco 49ers. Cedar Fair filed a lawsuit against the city and the 49ers last month, saying that the project violates California’s environmental regulations.

 

* Kinzel said Cedar Fair will continue to maintain Cedar Point’s status as the amusement park with the most roller coasters and rides in the world. “This is the crown jewel, Cedar Point,” he said. “Capital will continue to go into Cedar Point.”

 

* Despite speculation that Cedar Fair might merge with the bankrupt Six Flags amusement park chain, Kinzel says he and his board have never had any discussions with the management of Six Flags about merging with the rival company. Six Flags bondholders interested in buying the company came to Cedar Fair to ask questions about the amusement park business. Testimony in Six Flags’ bankruptcy hearings revealed that meeting and sparked all of the merger speculation, Kinzel said.

 

The debt problem, which forced Cedar Fair to suspend cash distributions last year, was supposed to be fixed when Apollo Global Management bought the company and took it private. Unitholders resisted the deal, which was terminated on April 6.

 

Some of the possible new options for dealing with the debt include amending the company’s current bank agreement, negotiating a brand new agreement with the banks, issuing more units in the stock market, selling assets or doing a bond offering, Kinzel and Crage said.

 

Cedar Fair has hired J.P. Morgan to weigh its options for dealing with its debt. Opportunities to deal with the debt are much better than last year, Crage said. “The markets really have shifted since last year,” Crage said.

 

Kinzel said he did not know if he will retire in 2012. That’s up to the board, he said. He said it’s possible he could stay on the board after that. “No decisions have been made,” he emphasized. “Succession planning is very, very important to this board and very important to me,” he said.

 

Kinzel said he believes the proposed merger with Apollo failed largely because of the emotional attachment investors have to Cedar Point. Many of the unitholders are small investors who live in the Sandusky area.

 

Kinzel said he’ll spend much of the time at the annual meeting walking unitholders through the last nine months and what motivated Cedar Fair to try to sell the company to Apollo.

 

Six Flags went bankrupt last year “and their investors lost everything,” Kinzel said. Cedar Fair was struggling at the same time Six Flags ran into trouble, he noted.

 

Crage said it was very unlikely that Cedar Fair would have gone bankrupt, too, although in 2009 “there was a possibility we could go into default,” he said. If that had happened, the banks would have renegotiated Cedar Fair’s credit terms, likely imposing higher interest costs, Crage said.

 

With the end of distributions, once the company got the offer from Apollo and negotiated the best deal it could, Cedar Fair had a responsibility to let the unitholders decide, Kinzel said.

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Kinzel said he believes the proposed merger with Apollo failed largely because of the emotional attachment investors have to Cedar Point. Many of the unitholders are small investors who live in the Sandusky area.

 

Eh? With other statements like:

 

Opportunities to deal with the debt are much better than last year, Crage said. “The markets really have shifted since last year,” Crage said.

 

I'm not sure that Dick is being fair to the investors by writing off their decision as due to "emotional attachment". It's sounding like the investors might have made the correct, objective decision in turning down Apollo's low ball offer.

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Cedar Fair is no longer attempting to sell the Worlds of Fun park in Kansas City, Mo., and Valleyfair park in Shakopee, Minn. “The only reason we put those up for sale was to try to save the distribution,” Kinzel explained.

 

The future of the Great America park in Santa Clara, Calif., is less certain. Local officials are trying to put in a new football stadium next to the park for the San Francisco 49ers. Cedar Fair filed a lawsuit against the city and the 49ers last month, saying that the project violates California’s environmental regulations.

 

Not liking the sounds of this...I have a feeling Cedar Fair's going to throw in the towel when it comes to CGA, which explains why we haven't seen any serious TLC for this park...Yes, we saw Planet Snoopy but that was something all the former Paramount Parks were getting. I guess it's probably too soon to jump to conclusions and make dangerous assumptions on what little facts I do have, we'll see this June after the whole voting thing goes down. Come on Cedar Fair, don't let the 49ers tackle you guys over...

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Kinzel said Cedar Fair will continue to maintain Cedar Point’s status as the amusement park with the most roller coasters and rides in the world. “This is the crown jewel, Cedar Point,” he said. “Capital will continue to go into Cedar Point.”

Me like

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^^Until the stadium situation is resolved, there isn't much they can do. Why would they pour money into a park that potentially has no future if the stadium is built?

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Not liking the sounds of this...I have a feeling Cedar Fair's going to throw in the towel when it comes to CGA, which explains why we haven't seen any serious TLC for this park...Yes, we saw Planet Snoopy but that was something all the former Paramount Parks were getting. I guess it's probably too soon to jump to conclusions and make dangerous assumptions on what little facts I do have, we'll see this June after the whole voting thing goes down. Come on Cedar Fair, don't let the 49ers tackle you guys over...

 

Considering the financial situation, they might just be looking to milk this for as much cash as possible. It's not like they'd be closing down the "crown jewel".

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http://www.cedarfair.com/ir/press_releases/index.cfm?current_root=15&mode=story&story_id=240

 

Cedar Fair Entertainment Company (NYSE: FUN), a leader in regional amusement parks, water parks and active entertainment, today announced its intention to offer its initial issuance of senior unsecured notes. The offering will be $500 million aggregate principal amount of senior unsecured notes due 2020 (the “Notes”) in a private placement, subject to market and other conditions. The Notes will be guaranteed by Cedar Fair’s wholly-owned subsidiaries.

 

As part of its overall refinancing plan, the Company is also launching the syndication of new senior secured credit facilities. The Company intends to use the net proceeds from the offering of the Notes, along with the new senior secured credit facilities, to repay in full all amounts outstanding under its existing credit facilities.

 

The Notes will be offered only to qualified institutional buyers under Rule 144A of the Securities Act of 1933, as amended (the “Securities Act”), and to certain non-U.S. persons in transactions outside the United States under Regulation S of the Securities Act. The initial issuance and sale of the Notes will not be registered under the Securities Act, and, the Notes may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and other applicable securities laws.

 

This news release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the Notes, in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.

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