NEWS: Snyder Buy-Out of Six Flags Endorsed....

[robbalvey]

Hmm....this came across yesterday. Quite an interesting read:

 

http://biz.yahoo.com/prnews/051109/new023.html?.v=34

 

CONCORD, Mass., Nov. 9 /PRNewswire/ -- Tigris Management, LLC, an investment management firm located in Concord, MA, announces that it will vote the shares of Six Flags, Inc. (NYSE: PKS - News) it controls directly or through its partners in favor of Red Zone's consent solicitation. This solicitation seeks to appoint Daniel Snyder, Mark Shapiro and Dwight Schar as directors of Six Flags. Tigris believes that the Red Zone team has a successful track record that can unlock the potential value in Six Flags. Based on current park attendance figures, Tigris Management believes that Six Flags shares can trade at $17.50 if the company is managed as effectively as comparable theme park operator Cedar Fair, L.P. Moreover, Tigris believes, based on Red Zone's history of value creation, values in excess of $33 per share can be achieved.

 

Not voting for Red Zone means voting to retain the current management team of Six Flags. This is the same team that posted six straight years of operating losses, culminating with an equity-linked share offering that effectively diluted shareholders by a third; current management has been unable to stem the 90% decline in Six Flags' shares, to $3.49, until Daniel Snyder started buying the shares last year.

 

Current management of Six Flags has proposed that it be allowed to seek a buyer for the company. Management is now asking shareholders to wait until the bids for the company arrive, before voting for Red Zone. This shows little appreciation of the market at hand. In the current market environment, underperforming companies that have changed managements (Interstate Bakeries, TXU Corp, Pathmark, Office Depot, Hewlett-Packard, etc.) have seen their stocks rally significantly. While this trend is likely to continue, it will not be here forever. There are real costs associated with waiting for a bid. Now is not the time to sell Six Flags or to allow the management to continue leading the company. It is the time to vote for the Red Zone team to unlock the values inherent in Six Flags.

Edited November 10, 2005 by robbalvey

[momo1tx]

I think I read somewhere that Tigris only owns a tiny amount of Six Flags shares, making this insignificant.

[robbalvey]

And then Six Flags' Response:

 

http://biz.yahoo.com/bw/051109/20051109006080.html?.v=1

 

NEW YORK--(BUSINESS WIRE)--Nov. 9, 2005--Six Flags, Inc. (NYSE: PKS - News) issued the following statement in connection with the Red Zone LLC consent solicitation:

 

"While we appreciate the opinions of all our shareholders large and small, our fellow shareholders should be aware that the investment management firm Tigris Management, LLC, which earlier today announced its support of Red Zone's consent solicitation, does not appear on any list of Six Flags stockholders and there is no public information regarding Tigris's activities or its assets, if any, under management. The Company noted that Tigris asserted valuations for the company that greatly exceed any other published third-party forecasts."

 

Stockholders should not sign Red Zone's white consent card. If stockholders have previously signed a white consent card, they may revoke that consent by immediately signing, dating and mailing the BLUE Consent Revocation Card being sent to them. Stockholders may support their current Board by signing, dating and mailing the BLUE Consent Revocation Card as soon as they receive it.

 

Six Flags, Inc. is the world's largest regional theme park company.

 

In response to the tender offer by Red Zone, if and when commenced, Six Flags will file with the SEC its recommendation to stockholders on Schedule 14D-9 regarding the tender offer and any amendments thereto. Investors and security holders are advised to read Six Flags' Solicitation/ Recommendation Statement on Schedule 14D-9 when it is filed and becomes available because it will contain important information. Investors and security holders may obtain a free copy of the Solicitation/Recommendation Statement on Schedule 14D-9 (when it is filed and becomes available) free of charge at the SEC's website at www.sec.gov. Six Flags, Inc. also will provide a copy of these materials without charge on its website at www.sixflags.com.

 

The most interesting statement is:

 

Tigris Management, LLC, which earlier today announced its support of Red Zone's consent solicitation, does not appear on any list of Six Flags stockholders and there is no public information regarding Tigris's activities or its assets

 

WTF is up with these companies???

 

--Robb

[PhishyBrewer]

I can't wait till all of this is over.

 

It's kind of like the Davis recall election all over again

Edited November 10, 2005 by PhishyBrewer

[ChemicalWhore]

intresting looks like all the shareholders are going to approve a synder take over i dont know what this will mean for the entire company.

 

Maybe i should make an e-trade account and buy a couple of thousand in stock.

[ChemicalWhore]

just seems like the current board is butthurt over being told they suck at thier jobs and are doing everything possible from being outsted

[Bob O]

Im sure the current managment doesnt want to lose there job which isnt surprising. And while a change at the top could be good at the top, there is no evidence that snyder and his cronies have the expertise to run theme parks. Making alot of money out of a awful football team where you have a monoply doesnt mean you can run theme parks that are spread out all over the country in competition with other aggressive companies.

[Gnome]

If Eisner were to take over the top position in Six Flags management, I wonder how well he'd help the company out. Hopefully, I wouldn't make everything too expensive like at Disney land. (which is the reason why nobody goes to DCA, but he's to stupid in that sense to realize it)

[bigboy]

Tigris issued a clarification yesterday:

 

http://biz.yahoo.com/prnews/051110/neth017.html?.v=34

 

Tigris Management Issues Clarification to Its Six Flags Statement

Thursday November 10, 10:51 am ET

 

CONCORD, Mass., Nov. 10 /PRNewswire/ -- Tigris Management, LLC, would like to issue the following clarification to its press release dated November 9, 2005.

The Six Flags (NYSE: PKS - News) shares that Tigris referred to in its previous statement are held in the name of its managing partner Murat Azizoglu, Ph.D., in a personal investment account. There are 4,000 shares in this account, which Dr. Azizoglu acquired on September 7, 2005, at a cost of $7.05 per share, as a potential long-term investment. The original statement outlines the rationale for this investment and the prospects for the betterment of the company from the perspective of this shareholder.

 

--------------------------------------------------------------------------------

Source: Tigris Management, LLC

 

So, they own 4000 shares or about 0.004% of the company. I doubt this has Snyder rushing to get his chairman of the board business cards printed. It's rather amusing how it freaked out SF enough for them to spit out a press release.

[larrygator]

damn - too bad I sold my 1,000 shares last month or else I could issue a press release also

[CoasterFanatic]

I remember back when you could get 1000 shares for the price of a used Cavalier.

[Cameron]

intresting looks like all the shareholders are going to approve a synder take over i dont know what this will mean for the entire company.

 

It will mean the end.

 

Cameron.

[CoasterFanatic]

I don't know if it neccesarily the end for Six Flags if Dan takes over. Daniel is a smart business man that is not going to allow the company to continue losing money. His actions so far have solidified that he does not believe that liquidation is the answer.

 

Just a few things you should know about the Red Zone Proposal

 

- Calls for the removal of chief executive Kieran Burke, CFO James Dannhauser and board member Stanley Shuman.

 

- Reverse the sales process and take Six Flags off the block

 

- "Clean, Safe, Fun"

 

- Increase Season Pass Prices (eliminate baby-sitter effect)

 

- Use more direct mail and focus more on families with young children and teen-agers

 

- Chain-Wide partnerships/sponsorships

 

- Create a Six Flags Rewards program to track attendees spending habits at the park.

 

- Outsource concessions and sell related equipment.

 

- Rezone about 3,700 acres of undeveloped property around selected parks and sell it. (Maybe they're will be more to do close to the parks?)

 

- Create more for children under 48 inches tall.

 

- Six Flags' sponsorships, such as its Looney Tunes agreement, are "tired and dated brands that generate little recognition by children." (Amen!)

 

While we may not agree with all the proposals they are all designed to do one thing .... make money. A company that is profitable sure has a lot more opportunities than a company that is not.

 

Are we forgetting that this is the same person that virtually double the Redskins annual revenues?

[Mind Eraser]

Ted, that was a great list. For some reason, I feel good about a "Snyder Takeover". I guess I have the attitude: "How much worse can it get?"

[CoasterFanatic]

^ That is surprising especially coming from someone in the area. If there were any detractors from Snyder taking over I would expect them to be the people who live in the DC area. Mostly because of the price increases at FedEx Field.

 

But then again ... you a Ravens Fan

[Cameron]

^^^ CoasterFanatic, the biggest problem I have with Snyder is that he just doesn't seem like he knows much about the industry. Business is not the same all over, and what works in one area is not guaranteed to work in another. I am thoroughly in agreement that a change in management is needed, I just think that Snyder would be far worse than what we currently have.

 

I don't know much about business, probably no-one on this board does .. but I do know a lot about having fun at an amusement park. Going to a place that's full of corporate sponsorship crap and bad chain fast-food joints, is not at all fun. If that's what I wanted, then I'd go to any mall.

 

The "corporatising" of .. well everything really .. is a bad move, and the backlash will be massive when it occurs. If Six Flags is a part of that, then it will not survive.

 

Not to mention the fact that an amusement park is supposed to be an escape. So on top of spending $10 for parking (which Snyder wants to increase further), and $45 to get in (ditto), you'll have idiots running up to you trying to sell you cell-phones and life insurance. Do you really think people are going to stand for that? At least now the worst they get is a poorly themed ride, a smelly bathroom or a slow moving line .. big deal.

 

"Clean Safe Fun", together with higher priced season passes will see attendance drop to record lows .. how on earth will that be good for Six Flags? Selling off unused land around parks is suicide .. where will these parks expand? He'll be basically eliminating all future growth from the company, bad.

 

Companies (especially public companies) are all about growth, more-so than "the bottom line". The last company I worked for made gobs and gobs of money every quarter, it exceeded its expectations every quarter, yet the shares were totally stagnant. Why? Because there is little room for the company to grow. The company for which I currently work has not shown a profit for years, yet the stock price is constantly rising. Why? Because this company as a whole is growing at an excellent rate.

 

Snyder will be a terrible thing for Six Flags .. I would actually rather see the company sell off all the parks, even close a few, than see Snyder running things. A handful of great parks (or even just average ones) are far better than a lot of garbage. If Snyder takes over, then in 5 years you'll all be wishing that at least one Six Flags park could be as good as Kentucky Kingdom is right now!

 

Cameron.

[CoasterFanatic]

^ How could "Clean Safe Fun" hurt a company. You almost make it sound like a bad thing. Attendance isn't everything. Ask Astroworld. They had attendance out the wazoo and it still didn't produce better profits. The season pass prices are now so low that any Six Flags Park with public transportation is crap. People through the gates no longer means more profit.

 

I do think that all forms of business follow the same basic blueprint for success, and saying that Sports Entertainment is completely different than family entertainment is a stretch.

 

I guess anyone that doesn't have any first hand experience with Theme Parks should just stay away. I mean that Walt Disney guy was an animation mogul. What ever made him think he could build a world-wide theme park empire.

[Meteornotes]

I still think selling all the land around the parks is a bad idea, and one that will come back to haunt them.

 

Oursoucing of food service is probably a good idea. Hell, it can't be worse, can it?

 

"Clean, Safe, Fun" sounds good as a marketing slogan, but it will take a LOT of work to make it reality. Will Snyder have the strength to totally commit to a program like this, that will likely require extensive re-training of all management and staff?

 

I'm not convinced that he'll be good for SF. Worse? Probably not. But I remain skeptical...

 

dt

[ParkTrips]

^^^ CoasterFanatic, the biggest problem I have with Snyder is that he just doesn't seem like he knows much about the industry. Business is not the same all over, and what works in one area is not guaranteed to work in another. I am thoroughly in agreement that a change in management is needed, I just think that Snyder would be far worse than what we currently have.

Did Burke and his buddies have theme park experience prior to gaining his executive roles? I'm pretty sure he's a businessman too.

 

So on top of spending $10 for parking (which Snyder wants to increase further)

Wrong, only "VIP Parking". Not being mean, but you should read his entire proposal. A lot of people seemed to blast him without reading exactly what he said.

 

Clean, Safe, Fun" together with higher priced season passes will see attendance drop to record lows .. how on earth will that be good for Six Flags?

First off their passes are dirt cheap. $50-100 for a season pass is cheaper than a week or two of daycare service, which is why the parks have such a reputation of being a childcare company. By raising prices these sort of "babysitees" will be fewer and farther between and while that may hurt attendance, it will still have positive effects as well. If the parks can clean up their images, families will be more inclined to make multiple visits in a season. More families = a lot more money. Bringing people into a park isn't that hard... bringing them back is key. Getting back to the 'dirt cheap' aspect, I think that Paramount and Cedar Fair parks do ok with season pass prices close to $100, why not Six Flags?

[Cameron]

I didn't mean to imply that no amusement experience was a bad thing .. just that some of his ideas are completely off the wall insane. Sure Six Flags is not a shining example of stellar business, but the answer is not to make sweeping changes just for the sake of it. The changes have to actually be good!

 

"Clean Safe Fun" is a great concept, but as a marketing slogan it's pretty laughable. Sounds more like a toilet cleaner ..

 

"Executive Parking" is another just shocking idea, and it's probably even worse than a blanket raise to parking fees. Where does that crap end? For $5 more you get a fresh burger, but everyone else gets the ones that have been sitting out for three days. It's totally wrong for making people feel like they're having fun, or that they're welcome. All he's doing (or wants to do) is magnify "open your wallet everywhere you turn", rather than "have fun everywhere you turn".

 

Take Holiday World for example. They constantly break their own attendance records, and the park is growing at an astounding rate. Why? Because they realize that the way to be successful is to actually be nice to people .. and provide an environment that really is "clean, safe, fun" .. rather than idiot Snyder who wants to provide an environment that is nothing more than "sterile, cold, corporate".

 

To compare him to Walt Disney is pretty insulting .. and I hope you were just making a point, and don't actually feel this way!

 

Anyway I am going to drop out of this thread, since it's in danger of becoming a pissing match (and no-one wants that on a public forum). However you can email me if you want to discuss it more (which I'm all for).

 

Cameron.

[jackskellington101]

Just going with your list here. Let me say, I'm also from the DC Metro area originally and really have no sports ties whatsoever because I barely watch any sports. However, I'm still a little hesitant about the Red Zone thing. But, going with your list.

 

Just a few things you should know about the Red Zone Proposal

 

- Calls for the removal of chief executive Kieran Burke, CFO James Dannhauser and board member Stanley Shuman.

 

- Reverse the sales process and take Six Flags off the block

 

Can't argue with those two.

 

- "Clean, Safe, Fun"

 

My personal view on that is if they are going to use that as a marketing slogan, they they have to give what they are marketing. Currently, when I think of a Six Flags park, those three words do not leap to mind. Now, my experience with Six Flags parks are very limited simply because I try to avoid them as much as possible. However, my experiences at said parks have never been those three words. They've got a lot of work ahead of them if they are going to live up to that.

 

- Increase Season Pass Prices (eliminate baby-sitter effect)

 

As a constant revenue stream, I can see that being a very good thing. You may lose a few season pass holders here and there, but that may be a good idea. Downside is that they are pretty expensive already. How much higher can they go without damaging too much of their existing base and can the company withstand a trial and error period to find that perfect price?

 

- Use more direct mail and focus more on families with young children and teen-agers

 

Interesting turn. Now, back home, I used to get a lot of direct mail marketing from Six Flags. I'd get one or two before season for season passes, one early season for "Homeschool day", then one for late season for Fright Fest and season passes again. The focus change is very interesting though. In my eyes, that seems to be a 180 degree change.

 

- Chain-Wide partnerships/sponsorships

 

Don't they have this already, sorta kinda?

 

- Create a Six Flags Rewards program to track attendees spending habits at the park.

 

I don't see how they're going to do this. Have something like a discount club card for Six Flags parks? What are they going to buy? Before they do this, or in conjunction with this, I believe they really need to diversify their offerings. There's very little at a Six Flags park of things I'd actually want to buy. One can only have so many Superman/Batman shirts and random key chains.

 

- Outsource concessions and sell related equipment.

 

This is definitely a lowering cost measure and, if prices stay the same, a raises the profit margin. However, in the long run it does something else, something else that I hope will spread across the industry as a whole. I say this hoping the most all parks here this, especially going out to Six Flags and Disney: Lower food prices. In my experiences in the parks, the cost of food has always been the biggest turn off for me. This especially goes for Six Flags and Disney counter service, though the rest of the industry's not too far behind (I'm looking at you Universal Orlando). But at SF Great Adventure, having to drop almost 25 bucks for two half-aed cheeseburger meals is totally ridiculous. That is definitely one of my biggest complaints of a Six Flags park.

 

 

- Rezone about 3,700 acres of undeveloped property around selected parks and sell it. (Maybe they're will be more to do close to the parks?)

 

Maybe. They might need to. I honestly say that they might need to close more parks too. Personally, I think that one of the problems that created this situation was the Six Flags grew too large for it's own good. It acquired too many parks and spread itself too thin financially. It probably wouldn't hurt to close down or sell off a few more parks to be able to rebuild again. Right off the bat, I'd have to say they could resell the non Six Flags branded parks of Enchanted Village/Wild Waves in Washington State and Frontier City and White Water Bay in Oklahoma City. In terms of closing, and it saddens me to say this, but probably Six Flags New Orleans probably would have close and the land resold as well. That is if they could sell any of these at all.

 

- Create more for children under 48 inches tall.

 

Apart of that interesting image shift above

 

- Six Flags' sponsorships, such as its Looney Tunes agreement, are "tired and dated brands that generate little recognition by children." (Amen!)

 

Now wait though. I can sort of see where they're going with Looney Tunes, but what about DC Comics? I don't see them as tired and dated at all, especially since a DC Comic related character was a top summer blockbuster this year. That doesn't happen to a "tired and dated" license. I don't think it's not the license that's tired and dated, I think it's the usage of the license that's tired and dated. They've got these great licenses at their fingertips and they do almost nothing with them apart from plastering the licensed name onto the attraction. I mean, look what's being done with Superman and Scooby Doo, two licenses Six Flags has, in Australia. That's some great, top shelf usage of the licenses. Heck, even the Scooby Doo interactive dark rides are better uses than a lot of the ideas that Six Flags have done in the past. Besides, if they do drop these sponsorships, what are they going to get? In terms of bringing in children and teenagers, the only real option left is Cartoon Network. Possibly a good move, but again, they need to use them. A license is only as good as how they are used. They could have the most popular thing in the world, but in this market if the product's crap, they're going to feel it.

 

While we may not agree with all the proposals they are all designed to do one thing .... make money. A company that is profitable sure has a lot more opportunities than a company that is not.

 

Are we forgetting that this is the same person that virtually double the Redskins annual revenues?

 

I see this, no matter what happens, as the rebuilding of Six Flags as a company. It has to be and it as it should be. They honestly need this shake up. My thoughts are that:

 

• -They need to have a serious 180 degree change in the way they run the parks and the way they create attractions.
   
  -Hire people that care about their jobs and are, at a minimum, friendly and personable.
   
  -Diversify their attraction and show offerings, though that seems to be on the table already.
   
  -Lower the food prices.
   
  -When having a license, use that license to the fullest advantage possible. Don't half hazardly just slap the name and possibly color scheme onto the ride, like say the 5,000 Batman: The Rides out there. Create an attraction and experience out of it.

 

I'm of the school of thought, from my knowledge a school founded by Walt Disney, that people recognize a quality product, so having a quality product is one of the best marketing money can buy. My advice to Six Flags is start making quality products! Start making things that differentiate yourself in the market Six Flags! In all honesty, stripping out personnel, how different is a Six Flags park from a, say, Cedar Fair park? On another note, how much positive differential can one create from a Six Flags park to a Disney or Universal park? That one may be unfair because Six Flags and Disney/Universal are definitely not in the same market structure and if they are then Six Flags has dropped the ball or just doesn't get it. What I'd like to see and it probably won't be now or in the foreseeable future, if ever, is for Six Flags to close a park, any park, and rebuild it from the ground up to be like a Six Flags version of a true theme park. In my prediction, it's probably look a lot like IOA, but that's not a totally horrible thing.

 

That's my 2 cents, or more like 2 bucks by the look of it

 

---Stuart

[Homer]

- Six Flags' sponsorships, such as its Looney Tunes agreement, are "tired and dated brands that generate little recognition by children." (Amen!)

Does SF own the rights to Cartoon Network still?

[CoasterFanatic]

Now we have a productive discussion.

 

Anyway I am going to drop out of this thread, since it's in danger of becoming a pissing match

 

Stick around. Trust me. I know where to draw the line.