Cedar Fair Corporate Development Discussion Thread (FUN)

[CoasterPrince]

^ Yeah I imagine Six Flags makes a pretty penny off of Flash Pass.

 

Understatement, trust me!

[KDCOASTERFAN]

I too like the idea of him as an interm CEO, perhaps for a few years, to get the CF parks moving. He had the right attitude when controlling the SF parks, so hopefully he could do the same here.

 

Right attitude?

 

All he did was continue the same pattern of crap at the parks as his predecessors...the same parks got spoiled while the same continued getting neglected.CF has done a better job running their parks,in particular KD than Shapiro did running the SF parks,in particular SFA.

[CoasterGuy06]

^California's Great America says hi!

 

Seriously. I wish people would get it through their heads that if Six Flags thought it would make more financial sense to put a Big Spin ride in SFA than to put it in at SFStl, or add a huge waterpark expansion rather than at SFGAM, or if it would bring them more money putting a Zac Spin at SFA than at SFMM they would. It's pretty simple.

[coasternut]

Cedar Fair just needs someone to bring them into the 21st century. Just think about how long it took them to have a chainwide season pass that could be scanned at the front gate at each park rather than you having to go to guest relations and getting a comp ticket at any park that was not your home park.

 

I totally agree... Big Dick has got to gooooooooo..

[Meteornotes]

I'd actually almost want to go back to CP or KI if you could get a Flashpass/Qbot. Almost.

 

dt

[SaweetDude04]

I must be one of the few left that doesn't really mind there not being a flash pass at Cedar Point. While it's nice to pay extra and skip the lines, I've never had an issue with not being able to ride all of the rides that I want to when I visit Cedar Point. Sure I may only get on them once or twice per visit, but I find that I still have just as much fun as I do at SFGAdv using a flash pass. I also find myself wanting to visit Cedar Point more, possibly due to not being able to marathon ride everything. Maybe this is a possible reason Cedar Fair has steered clear of the charge extra to skip the line systems?

[coasternut]

I must be one of the few left that doesn't really mind there not being a flash pass at Cedar Point. While it's nice to pay extra and skip the lines, I've never had an issue with not being able to ride all of the rides that I want to when I visit Cedar Point. Sure I may only get on them once or twice per visit, but I find that I still have just as much fun as I do at SFGAdv using a flash pass. I also find myself wanting to visit Cedar Point more, possibly due to not being able to marathon ride everything. Maybe this is a possible reason Cedar Fair has steered clear of the charge extra to skip the line systems?

 

I liked their "freeway" system for getting rides. It didn't cost anything. I've never paid extra for a flash pass. You just need to know where to go to get your rides at 6 Flags. People complain about the waits, but if you know what you're doing it's not a problem I feel.

[SharkTums]

^Ugh. Really? The Freeway system!?! I think I'm still scrubbing paint off my hands from when they used that at CP.

[ParkTrips]

^ LOL!! The secret was to wash your hands in Lake Erie, there were enough toxins in the water to wipe it right off!(along with your skin, of course..)

 

seriously, that was the dumbest queue-cutting system ever.

 

 

edit:

^ Yeah I imagine Six Flags makes a pretty penny off of Flash Pass.

unfortunately, I'm pretty sure the vendor, Lo-Q, takes home a big chunk of the profits

 

(not to detract any park from opting to use them as it is beneficial to the park, Lo-q and the guests)

[coastermaniac]

^Ugh. Really? The Freeway system!?! I think I'm still scrubbing paint off my hands from when they used that at CP.

 

I feel the same way; that specific system was rather bad and the paint/stamp thing wasn't the greatest.

[coasternut]

^Ugh. Really? The Freeway system!?! I think I'm still scrubbing paint off my hands from when they used that at CP.

 

Agreed, the ink used was quite aggressive. My point was it cost nothing to get 2 front of the line passes.

[Airtime&Gravity]

Mark Shapiro would be great at Cedar Fair. As said, while he was with Six Flags when they entered bankruptcy, he began to turn the company around. Unfortunately, they weren't allowed to refinance, and bankruptcy became inevitable. Had the previous management been in charge, I believe Six Flags would have entered bankruptcy a lot sooner.

 

Cedar Fair is now financially weak, and as with Six Flags, Shapiro could at least be able to begin to turn the company around. While the abundance of advertising and chain restaurants might not be appealing, it , in the case of advertising, brings in money directly, or gives a recognizable brand in the case of restaurants. The wraps don't take away from the ride experience, and the signs with the misters always had a group of people trying to cool off in the mist.

 

When it comes to rides, Shapiro seemed to realize that bigger isn't always better, and while I didn't agree with all his ride additions, he at least seemed for the most part to put some effort in when it came to adding attractions(excluding SFGAM's Wiggle's World). While him being CEO might mean more family style coasters or kiddielands, is that really a bad thing? The coasters were still pretty good, and the kiddielands popular. Plus, with Dark Knight, and Buccaneer Battle, we saw rides added with more theming than pretty much anything a Cedar Fair park has added in a long time. So as long as he wouldn't go overboard giving rides the X2/Bizarro treatment and realizes that while well intentioned (and sometimes needed), family attractions include more than just kiddielands, I can see Shapiro doing great things for Cedar Fair.

[KDCOASTERFAN]

Mark Shapiro would be great at Cedar Fair. As said, while he was with Six Flags when they entered bankruptcy, he began to turn the company around. Unfortunately, they weren't allowed to refinance, and bankruptcy became inevitable. Had the previous management been in charge, I believe Six Flags would have entered bankruptcy a lot sooner.

 

Cedar Fair is now financially weak, and as with Six Flags, Shapiro could at least be able to begin to turn the company around. While the abundance of advertising and chain restaurants might not be appealing, it , in the case of advertising, brings in money directly, or gives a recognizable brand in the case of restaurants. The wraps don't take away from the ride experience, and the signs with the misters always had a group of people trying to cool off in the mist.

 

When it comes to rides, Shapiro seemed to realize that bigger isn't always better, and while I didn't agree with all his ride additions, he at least seemed for the most part to put some effort in when it came to adding attractions(excluding SFGAM's Wiggle's World). While him being CEO might mean more family style coasters or kiddielands, is that really a bad thing? The coasters were still pretty good, and the kiddielands popular. Plus, with Dark Knight, and Buccaneer Battle, we saw rides added with more theming than pretty much anything a Cedar Fair park has added in a long time. So as long as he wouldn't go overboard giving rides the X2/Bizarro treatment and realizes that while well intentioned (and sometimes needed), family attractions include more than just kiddielands, I can see Shapiro doing great things for Cedar Fair.

 

Shapiro did t he same crap with SF t hat Burke did which was adding major expenditures to the spoiled parks at the expense of the smaller parks that Burke & co. overlooked & in the end it didn't seem to work otherwise he & Snyder wouldn't have been ousted to begin with so I do not want to see him running CF.

[ABW]

^Really? Well, at least Shapiro knew of a concept of actually caring for his parks. Try, just try telling me Six Flags parks looked better before Shapiro came in.

 

^^This. And what makes everone think that Shapiro would bring everything he did at Six Flags over to Cedar Fair? He's obviously smart enough to realize that would make competition less fierce. Flash passes at Cedar Point? Really? He's not that dumb. Some CEO's are actually good at making decent decisions for their company. Just my two cents.

[larrygator]

Shapiro did t he same crap with SF t hat Burke did which was adding major expenditures to the spoiled parks at the expense of the smaller parks that Burke & co. overlooked

 

That is called good business, re-investing the the areas that are making money for the company.

 

 

in the end it didn't seem to work otherwise he & Snyder wouldn't have been ousted to begin with so I do not want to see him running CF.

 

No, the company went into bankruptcy protection because they could not pay down the debt inherited from previous owners. The company was making money un Shapiro, just not enough to cover the interest payments.

[ginzo]

Shapiro did t he same crap with SF t hat Burke did which was adding major expenditures to the spoiled parks at the expense of the smaller parks that Burke & co. overlooked & in the end it didn't seem to work otherwise he & Snyder wouldn't have been ousted to begin with so I do not want to see him running CF.

 

Save it for the SFA thread.

[jedimaster1227]

http://www.sanduskyregister.com/news/2011/may/09/cedarfairfalfas050511tjxml

 

Formerly secret court documents show that just days before his job ended, Cedar Fair's Jacob "Jack" Falfas was still being carefully groomed to replace Dick Kinzel as the company's new chief exeutive officer. The documents show Falfas was fired or quit during a brief but tense phone call. The topic of the June 10 conversation — between Kinzel and Falfas — was Cedar Point's expensive and ill-fated "Rock Band Live" show.

 

Falfas was earning more than $1 million a year in salary and bonuses before suddenly losing his job.

 

A three-member arbitration panel ruled 2-1 earlier this year that Falfas had been fired without cause. The panel ordered Cedar Fair to reinstate Falfas as chief operating officer and give him back pay. The fate of Falfas' job is in litigation in Erie County Common Pleas Court. Cedar Fair concedes it lost the arbitration and owes Falfas money, but it also says arbitrators exceeded their authority by telling Cedar Fair to give him his job back.

 

Court magistrate Steve Bechtel said briefs from the two sides will be submitted to the court in late June.

 

Cedar Fair axed "Rock Band Live" after only one season. It will be replaced this year with "Rockin' the Point," featuring hits from the 1970s and 1980s.

 

Kinzel is scheduled to retire in January, and the company is expected to announce a new CEO soon.

 

The court documents, only recently unsealed, show that on June 2, 2010 -- just days before Falfas' departure -- Kinzel sent a memo to Cedar Fair's board explaining he had reorganized the company's management team to shore up the plan to make Falfas the new CEO. Falfas is weak on financial skills but strong in operations, Kinzel explained. Promoting Peter Crage to executive vice president and David Hoffman to vice president of finance and corporate tax would allow Falfas to concentrate on operations, the memo said.

 

But the relationship between Kinzel and Falfas soured days later. Kinzel was unhappy about the Rock Band show's $1.6 million price tag, particularly the $275,000 licensing fee Cedar Fair paid MTV. The two men discussed the matter in a phone call and email. It came to a head at 5:19 p.m. June 10 -- a Thursday -- when Falfas flew into Cleveland Hopkins International Airport. He used his cell phone to return a call from Kinzel, Falfas testified during the January arbitration hearing.

 

Terse and tense

 

The discussion lasted 1 minute and 34 seconds. Court documents show Falfas complained to Kinzel about "the way you're coming after me about 'Rock Band.'" Kinzel invited him to come in and talk about it and told Falfas he was being "stupid." Falfas said there was nothing else to talk about. Falfas said Kinzel replied, "Well, if that's the way you feel about it, leave." Falfas said when he offered to clean out his desk Saturday, Kinzel said, "Well, then go." Kinzel then hung up, Falfas said.

 

Kinzel testified about the same brief phone call, but his account differed on key details. "Jack called me and said he was in Cleveland and he said he would be in Sandusky to clean out his desk," Kinzel's said during his testimony. "And I said, 'Jack, don't be silly. Come in tomorrow, and we'll talk about this.' And he hung up." Two days later, Falfas showed up at Cedar Point and cleaned out his desk. He left behind his keys and other Cedar Fair property.

 

The arbitration transcript shows both sides called witnesses.

 

Barbara Falfas said she came home from a book club meeting at about 8:45 p.m. June 10 and was surprised to find her husband home. "I can't believe that he let me go," Falfas told her. "He told me to leave." "I was astonished," Barbara testified. "I was beside myself, actually."

 

Crage, the chief financial officer, testified he was still in his office on the evening of June 10. Kinzel, who usually knocked before entering, walked in and said, "Pete, guess what? Jack resigned." Kinzel seemed "surprised and stunned," Crage said.

 

While the fateful phone conversation was June 10, Cedar Point filed a document with the U.S. Securities and Exchange Commission on June 17, saying Falfas quit June 12. "On June 12, 2010, Jacob T. Falfas, Chief Operating Officer, resigned from Cedar Fair Entertainment Company effective immediately," the filing said. "All compensation and benefits pursuant to Mr. Falfas' employment agreement ceased on the last day of his employment." Falfas immediately disputed the filing and said he was fired. His contract allowed him to seek arbitration on the issue.

 

Cedar Fair attorney Duffield Milkie wrote in a June 13 email: "This looks good. Jack actually resigned on June 12 by turning in his keys, etc. I think we use that date throughout and not get into any earlier notification. Jack never gave any definite notice. I think we should send to Dick for his approval, and we can let him know we need Jack's sign off."

 

Testimony also shows Falfas opposed the decision to sell Cedar Fair to Apollo Global Management, a private equity firm. The deal collapsed after investors revolted. During the arbitration hearing, Kinzel said he never sought to get rid of Falfas.

 

"I mean, I've used the words that if I need it from Jack, it was on the other side of that wall, he would go through that wall to get it for me," Kinzel said. "That's how much confidence I had in Jack." Kinzel said Falfas tried to quit once before after the two had a disagreement. "And I said, 'Jack, don't be silly.' And we just kept continuing working and that was the last, the last I ever heard of it," Kinzel said.

[beatle11]

^ Sounds like bickering from an old married couple.

[Bolliger&Mabillard]

^Well in this particular case, an old divorced couple...

[coasternut]

I guess now I can call "Big Dick" another name too. He can be "Tricky Dick!"

[jarmor]

This is some good stuff!

[Skycoastin Steve]

Oh to have been a fly in the wall for that phone conversation.

[jedimaster1227]

http://www.cedarfair.com/ir/press_releases/index.cfm?current_root=15&mode=story&story_id=303

 

Dear Cedar Fair Unitholders:

 

Since this will be my last year as President and Chief Executive Officer of Cedar Fair, I have begun to reflect on the many great milestones this Company has achieved over the years.

 

Cedar Fair Entertainment Company began trading publicly on April 29, 1987 for $10.00 per unit ($5.00 after taking into account a 2-for-1 unit split in November 1997). At the time, we operated two amusement parks, Cedar Point in Sandusky, Ohio and Valleyfair in Shakopee, Minnesota, entertained approximately 4.1 million visitors, and reported revenues of approximately $103 million. Over the years, we have successfully grown the Company by acquiring targeted properties and infusing an experienced, results-driven management team to bring the acquired properties up to the "Cedar Fair Standard." We now operate 11 amusement parks, six separately-gated outdoor water parks, one indoor water park and five hotels. Our annual revenues have grown to almost $1 billion, and we entertained a record 22.8 million guests last year, while setting the standard for our industry.

 

During this time, we have paid out more than $1.4 billion in distributions to unitholders, or $29.10 per unit. With the March 2011 distribution payment, Cedar Fair has now paid a distribution to its unitholders in each of the last 25 years. I am very proud of this milestone as it demonstrates that distributions have been – and remain – among our highest priorities. As we discussed on our most recent quarterly earnings conference call, we expect to pay $1.00 per unit in distributions in 2011 with a goal to increase distributions to $2.00 or more per unit in 2013.

 

Similarly, we are proud of the prudent and responsible manner with which we've run the business and the sustained value we have created for our unitholders through both good and bad economies. Our balanced approach of sound financial and operations management, coupled with continual investment within our parks, has clearly rewarded our unitholders over the years. For example, if you had invested $10,000 in April of 1987 you would report a total return of approximately $100,000 today. In comparison, the same investment in the S&P 500 would be worth approximately $61,000 today.

 

Last year was a terrific example of our acute focus on value creation for unitholders and potential for future growth as we:

 

• Entertained a record 22.8 million guests in a slowly recovering U.S. economy;
  
• Increased Adjusted EBITDA by 14% to a record $359.2 million(1);
  
• Continued to control operating costs resulting in an increase of 2.1% in the adjusted EBITDA margin;
  
• Refinanced our debt and revolving credit facility, which extended maturities, widened debt covenants and allowed the reinstatement of a distribution by the end of 2010; and
  
• Reduced debt by $47 million, which will also lower annual interest expense and leverage ratios.

 

Our record attendance and strong cash flows in 2010 are further evidence of the strength of our business model which is designed to reward our unitholders with steadily increasing value creation through growing distributions.

 

Consistent with our fiscal discipline and strategic focus, we believe we will be able to take advantage of additional opportunities in the future, such as growing out-of-park revenues through the introduction of new hotels and restaurants and external growth opportunities through acquisitions and/or joint ventures.

 

Our recent successes are even more impressive when you consider the many challenges we have faced – from the lingering negative effects of the recent financial crisis and economic recession to the seemingly endless attacks, litigation and threats by Q Funding, a hedge fund investor based in Texas.

 

Q Funding has requested yet another Special Meeting of unitholders, this time to vote on amendments to our governance documents to give unitholders the right to nominate directors for election to the Board of Directors. However, Q Funding's original proposal was not consistent with our governance structure and we advised them accordingly. Rather than fix their own mistake, Q Funding sued to force the Company to convene a meeting to vote on their ineffective proposal, further spending unitholders' money in unnecessary and costly litigation, before finally acknowledging the flaw in their proposal.

 

In order to provide unitholders with an opportunity to vote on the issue of director nominations in a manner consistent with our governance structure, there will be two proposals on the proxy for this Special Meeting that would properly amend both the regulations of our general partner and the Partnership Agreement. The Board is interested in hearing the opinions of all its unitholders and therefore, makes no recommendation regarding whether you should vote for or against the two proposals.

 

We have always been willing to take into consideration any nominee that may have been presented to us from unitholders. Look no further than Q Funding's request last year and the addition of two new Board members suggested by them. We do not believe in conducting business through lawsuits and repeated special meetings and believe it is more productive to work together with our investors to strengthen our corporate governance practices and optimize the value of this Company. It is also important for all investors to have a say in their company and to ensure everyone is fairly represented.

 

Our focus will remain on our business and continuing to produce strong results while making adjustments where we can to our corporate governance structure based on unitholder feedback. We encourage Q Funding to stop the expensive lawsuits and special meetings, which take money out of your pocket, and come to the table to work constructively with your Board of Directors and maximize value for all unitholders.

 

As a reminder, you can always communicate directly with your Board of Directors by sending communications to the attention of Brenda Lakner, Corporate Secretary, One Cedar Point Drive, Sandusky, Ohio 44870-5259. The correspondence will be forwarded to the Chair of the Nominating and Corporate Governance Committee.

 

We have positioned Cedar Fair for an exciting future:

 

• We have a deep, exceptionally talented and highly motivated team of managers throughout the organization – from operations, to marketing and guest services, to finance and legal. The fact that we produced record results in 2010 despite the previously mentioned challenges and distractions is a testament to the strength of our team and their potential for future value creation.
   
  
• We have an independent Board led by C. Thomas "Tom" Harvie, our newly appointed independent Chairman. At this time I would also like you to know we intend to nominate another new independent and highly qualified director to the Board for election at our 2011 Annual Meeting, which is currently scheduled to be held on July 7, 2011 in Sandusky, Ohio. This individual will represent the fourth new independent Board member added since 2008.
   
  
• We have already had a positive start to 2011. In February, in light of our strong performance in 2010 and the strengthening of our capital structure, we took the opportunity to reduce interest rate spreads, extend the maturity of a portion of our debt and gain additional flexibility under several lender covenants including our distribution provisions. With this new refinancing, we expect to achieve annualized interest savings of approximately $18 million based on today's interest rates. As I stated earlier, should 2011 cash flows meet our expectations, we intend to pay $1.00 per unit in distributions to our investors by the end of this year and would have between $1.30 to $1.65 per unit available for distribution in 2012. Looking ahead with that same assumption, our goal is to distribute $2.00 or more per unit in 2013.
   
  
• We also have an exciting capital investment program in place again this year, including a 300-foot-tall thrill ride being introduced at our four largest parks. We are also introducing a variety of family rides and attractions, new restaurants and new live shows across all of our properties. We are keenly focused on carrying the momentum from our operations in 2010 into 2011 and are optimistic that we can continue to build upon these record results as the economy continues to recover. As long as our parks perform as we fully expect them to, and the economy and weather cooperate, we expect to generate full-year net revenues between $975 million to $1.0 billion and full-year adjusted EBITDA in the range of $350 million to $370 million in 2011.

 

Looking at 2012 and beyond, we continue to believe that this business is recession resistant -- not recession proof, but recession resistant -- and we will be able to continue to attract guests on an annual basis. Our successful history has clearly shown the loyalty of our guests and there is no reason to expect the future to be any different. We have already begun approving new rides and attractions well into 2013 and I am confident these investments will continue to make our parks the best in the world.

 

As you may know by now, my contract expires in January of 2012 and the Board of Directors is currently conducting a search and interview process for the next CEO. As part of this process, we retained an internationally recognized executive search firm to assist a special committee of the Board in identifying and recruiting a new top executive. We have been able to attract and identify several strong candidates and are on track to complete the process in the near future.

 

I have always said that the best part of my job is walking the midway. It's the only way to really know what's going on in the park. Throughout my time in this industry I have tried to stay in touch with what's happening along the midway, to talk to guests and employees, and to observe how our guests are enjoying the park. I make no apology for being a hands-on manager. Cedar Fair has a solid foundation and I know the next CEO will build upon this success. I look forward to partnering with my successor through a seamless transition.

 

We will continue to systematically carry out our strategy with our eye on the goal of producing substantial free cash flows that will allow us to invest consistently and productively in our business and pay a growing distribution to our unitholders, while progressively decreasing leverage. We want to ensure our unitholders have the opportunity to enjoy another 25 consecutive years of distributions.

 

I believe all our plans and efforts will result in substantial rewards in the future. I firmly believe our actions will speak for themselves and having a solid business and real assets will result in exciting growth, creating additional unitholder value going forward. Our approach will be strategic and responsible while, at the same time, maintaining the forward motion required to reach our goals.

 

We remain committed to the success of Cedar Fair as a leading national entertainment brand. I would like to thank you for your continued commitment, and I look forward to reporting our progress to you as 2011 is shaping up to be another exciting year for Cedar Fair.

 

Sincerely,

 

Richard L. Kinzel

President and Chief Executive Officer

[coasternut]

^ Dick Kinzel you were great, and a trendsetter in the PAST. The key word there is the PAST. Goodbye big Dick!

[jedimaster1227]

http://www.prnewswire.com/news-releases/peter-j-crage-to-resign-as-cedar-fairs-chief-financial-officer-123573314.html

 

Cedar Fair Entertainment Company (NYSE: FUN) today announced that Peter J. Crage has submitted his letter of resignation as the Company's chief financial officer, effective June 22, 2011. Crage, 49, who has served in this position since 2005, is leaving the Company to pursue a new professional opportunity. David R. Hoffman, 42, vice president of finance and corporate tax, and Brian C. Witherow, 44, vice president and corporate controller, will lead the finance function in the interim while the Company conducts a search for Crage's successor.

 

"On behalf of the Board and the entire organization, I want to sincerely thank Peter for his tireless efforts and loyal service to Cedar Fair over the years," said Dick Kinzel, president and chief executive officer. "Peter is a consummate professional and an even better person. His insight and candor will be missed. We wish him nothing but the very best as he moves on to this new opportunity.

 

"We built significant operational and financial momentum during the past year and fully expect to maintain this strong performance trajectory in 2011 and beyond," he said.

 

"Given the strength of our financial team, we expect this transition to be seamless."

 

"I wish to thank Dick and my colleagues, as well as the Board, for the confidence they have consistently shown me during my tenure at Cedar Fair," said Crage. "While I am tremendously excited about my new position, it was certainly not an easy decision for me to make given my strong connection to Cedar Fair and the wonderfully talented men and women who work here. I am proud of what we accomplished together and look forward to watching them build upon this success."

 

As previously announced, the Company is in the process of naming a new president, who will succeed Kinzel as chief executive officer upon the completion of his contract.

 

Today's announcement does not, in any way, affect the Company's plan to name this new senior leader in the near future.