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

Six Flags [FUN] Corporate Discussion Thread

p. 91: Six Flags and Cedar Fair to enter "merger of equals" agreement, company will still be called "Six Flags"

Recommended Posts

Great analysis and speculation. However, I'm not clear what you mean by this comment. Can you rephrase?

 

-Selling dining passes is still deemed low compared to season pass holder sales. Is it because there isn't a demand from "Active Pass Holders" (deemed to be a 1/3 of the passholder base)? They don't think so. They're gonna ride that hard this year.

 

All-Season Dining has "good penetration" but sales are not what they would like, so they say. Usually if people are aware of something, think it is a good value, and desire it, they buy it. Macroeconomics 101, right? But Six Flags thinks there's room for growth. So they're just gonna keep pushing them anyways until sales increase.

 

And to add to this it was mentioned ad nauseum throughout the conference call, so not only do they plan to push this, but they seem to think they have some incredible growth opportunity with it and they plan to push it hard.

Link to comment
Share on other sites

By the way, sorry for the double post but I was thinking about this this morning...

 

Does anyone else find it odd that they managed to convince people that their brand name was powerful enough (versus a generic park name) that people should pay for the rights to use it but they don't personally think it's powerful enough to slap it on Great Escape or La Ronde? Does anything else come along with this deal (like the ability to use the DC universe / Loony Toons)? I'm not that well versed on the intricacies of licensing deals, but I'm not even convinced that they believe the crap they're (successfully) selling people.

Link to comment
Share on other sites

^I think he reason for not flagging LaRonde has to do with the incremental costs to extend the Warner Brothers and DC Comics licensing agreement into Canada. However, it might be because of the land leasing agreement with the City of Montreal

 

I believe Great Escape was branded Six Flags Great Escape the first year or two after being purchased but changed back as the the park is marketed as a thrill park.

Link to comment
Share on other sites

  • 1 month later...
  • 4 weeks later...

Six Flags hosted its quarterly conference call with investors this morning. From "In The Loop" on Facebook:

 

Six Flags just said on their quarterly conference call with investors that the chain is once again looking to acquire or lease parks in North America. What parks do you see as potential candidates?

They also said that more parks will receive the Mardi Gras event next year, who do you think is getting it?

 

I wonder if we'll be seeing Six Flags Darien Lake or Elitch Gardens again? What do y'all think?

Link to comment
Share on other sites

I listened to the earnings call - here's some more details:

 

- It is a play to leverage existing season pass base or to sell combo tickets

- Parks would be either bought or leased (managed)

- Potential parks would be in same markets, or feeder markets for existing parks

 

I could see them picking up another water park in the Dallas/Fort Worth area, another SoCal waterpark, and/or waterpark in NoCal for SFDK pairing. Theme park wise I think it would be smaller parks but something like an Alabama Adventures (with Birmingham being feeder market for ATL) or some parks along the east coast to give SFA/SFGADv season passes some added value. Maybe Clementon? Dutch Wonderland? A boardwalk park?

Link to comment
Share on other sites

What parks can they honestly purchase or lease? I don't think CF is willing to give up any of their property, neither is a large majority of the smaller independent parks. A lot pride themselves not being corporate or fall to a lot of the problems that are rampant in SF. I could see the waterpark purchases, but the obvious 3 dry parks still have contracts with leasing.

 

One park I could eventually see being sold off again, to any buyer really, would be Kentucky Kingdom.

Link to comment
Share on other sites

What parks can they honestly purchase or lease? I don't think CF is willing to give up any of their property, neither is a large majority of the smaller independent parks. A lot pride themselves not being corporate or fall to a lot of the problems that are rampant in SF. I could see the waterpark purchases, but the obvious 3 dry parks still have contracts with leasing.

 

Money talks and probably can convince some smaller parks. I really doubt you'll see any "big" parks picked up. Their goal is to create added value to existing parks' tickets/passes - I wouldn't be shocked to see them pick up and gate some medium size FECs.

 

Water parks will be easier - I think there is a lot of water parks out there on the smaller/mid size.

 

And not sure what problems are rampant with SF? From a business perspective they are doing extremely well and have less than half of the debt CF has. There is a reason Wall Street loves SF.

Link to comment
Share on other sites

What parks can they honestly purchase or lease? I don't think CF is willing to give up any of their property, neither is a large majority of the smaller independent parks. A lot pride themselves not being corporate or fall to a lot of the problems that are rampant in SF. I could see the waterpark purchases, but the obvious 3 dry parks still have contracts with leasing.

 

Money talks and probably can convince some smaller parks. I really doubt you'll see any "big" parks picked up. Their goal is to create added value to existing parks' tickets/passes - I wouldn't be shocked to see them pick up and gate some medium size FECs.

 

Water parks will be easier - I think there is a lot of water parks out there on the smaller/mid size.

 

And not sure what problems are rampant with SF? From a business perspective they are doing extremely well and have less than half of the debt CF has. There is a reason Wall Street loves SF.

Problems are that most enthusiasts put SF on a different level from CF to begin with. Anything that hoes wrong at a SF park = a horrible experience but that same thing can occur at a CF park and they'll get a pass. It's also considered garbage that SF has gone the "clone" route for new additions for 5 years now. Enthusiasts hate that.

 

Most enthusiasts are clueless to the business workings at play though. Just ignore their opinions for the most part.

Link to comment
Share on other sites

Okay, I've got to be honest, I think people are making a much bigger deal out of this than they should be.

 

This news was blowing up my news feed too, but how many people have actually read the transcript of the earnings call? I really invite you to do so before getting too excited about this (pro tip: disable javascript to read the transcript so it doesn't pop up with a sign up prompt).

 

Yes, at one point John Duffey said:

 

In the case of Oaxtepec, we took over operations of an unprofitable water park at no cost, refurbished it with a new capital investment, and expect to see meaningful earnings contributions in the near term. In other likely deals, we may simply acquire or lease an existing water or theme park and enhance its profitability with our scale and season pass bundling.

 

But as the call went on it became more and more obvious that they were primarily focusing on water parks. A few people asked follow up questions and the answers always seemed to focus strictly on water parks (which are of course cheaper to acquire and can offer great profit margins as they mentioned in the call). Read the exchange between Marshall Barber and John Duffey from Six Flags and Barton Crockett from FBR Capital Markets & Co. and you'll see what I mean. I think the chain would be willing to acquire or lease a theme park if an opportunity presented itself that made sense, but I think they're primarily focusing on water parks.

 

I'm assuming that at this point they're really struggling to come up with ways to grow attendance. They're in a great place already but they want to show growth and while I don't think they want to admit it they're really coming close to market saturation. In 2016, 60% of park admissions were from passholders so they're going to have a hard time growing that number. Lately the calls seem to be heavily focused on dining plans and they've had some success in growing their numbers there but the growth potential there is directly tied to their nearly saturated passholder market and they've already managed to sell these Dining Plans to about 1/3 of those people as of last year. Deferred revenue is up 20% so they're making some headway but eventually that well is going to run dry.

 

Aside from that, what's the best way to improve attendance and revenue? Holiday in the Park. If you extend your hours and add tons of operating dates then Q4 is guaranteed to show growth unless you're doing something horribly wrong. The problem of course is that now that they've added it to New England there's really only going to be (at most) one more time they could realistically go to that well.

 

So if they've saturated the passholder base and want to show impressive growth in attendance or revenue they really need to come up with some new ideas. Sure they can hope for incremental growth at their existing parks but they don't seem to be content with that (though they seem to be focusing heavily on Mardi Gras to improve their early season attendance numbers). Their plans of setting up a REIT conversion have gone nowhere and they've decided not to pursue it, Vietnam is turning into quite the embarrassment for them and they're doing whatever possible to deflect tons of questions on it on every single call and they need to come up with another way for them to grow their numbers quickly which is why I think they've decided to go this route. I think acquiring a water park for less money with better margins makes a lot more sense for them right now than purchasing a theme park. They'd do it if the right opportunity presented itself but I don't think it's entirely likely, at least not in the United States.

Edited by coasterbill
Link to comment
Share on other sites

That's a good post Bill. Shareholders can never accept "well, this is as good as it's gonna get" so it will be interesting to see what kind of stuff they come up with when those type of quick fix ideas dry up.

 

 

Shocked we haven't seen six flags water park resorts like Great Wolf especially at existing resorts considering g the old operating model went out the window with Fright Fests and now Christmas events.

 

If they want smaller feeder parks, I'd suggest Magic Springs, water park already there, perfect place to relocate used coasters and add some flats and a cheaper new Woodie. Any season pass gold holders have Atlanta, Dallas, and St. Louis to weekend trip to, which would feed the indoor water park resorts with a 10 to 15 percent season pass discount rate.

Link to comment
Share on other sites

That's a good post Bill. Shareholders can never accept "well, this is as good as it's gonna get" so it will be interesting to see what kind of stuff they come up with when those type of quick fix ideas dry up.

 

 

Shocked we haven't seen six flags water park resorts like Great Wolf especially at existing resorts considering g the old operating model went out the window with Fright Fests and now Christmas events.

 

You mean like this?

Link to comment
Share on other sites

That's a good post Bill. Shareholders can never accept "well, this is as good as it's gonna get" so it will be interesting to see what kind of stuff they come up with when those type of quick fix ideas dry up.

 

 

Shocked we haven't seen six flags water park resorts like Great Wolf especially at existing resorts considering g the old operating model went out the window with Fright Fests and now Christmas events.

 

You mean like this?

 

 

It is funny out of all the Six Flags properties, They only had hotels at Darien Lake, Worlds Of Adventure, and Great Escape. I think one of the Walibi too.

Link to comment
Share on other sites

What parks can they honestly purchase or lease? I don't think CF is willing to give up any of their property, neither is a large majority of the smaller independent parks. A lot pride themselves not being corporate or fall to a lot of the problems that are rampant in SF. I could see the waterpark purchases, but the obvious 3 dry parks still have contracts with leasing.

 

And not sure what problems are rampant with SF? From a business perspective they are doing extremely well and have less than half of the debt CF has. There is a reason Wall Street loves SF.

I'm not talking about fiscal, but rather the guest experience part. A lot of Six Flags seem to have bad guest service, bad/uncaring ops and employees, and pretty unclean and unattractive parks littered with ads and completely lacking the small park charm. It's not completely chain wide but I've been to some of the best parks, and I still run into issues with bad ops all the time and unenforced rule breaking.

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
  • 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/