Author Topic: Six Flags to sell Six Parks (Read 7613 times)

PcMan · « **on:** June 22, 2006, 06:36:55 PM »

Looks Like Magic Mountain is not a Family Type Park

Six Flags looks to deal six properties
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By Russ Britt, MarketWatch
Last Update: 6:30 PM ET Jun 22, 2006

LOS ANGELES (MarketWatch) -- Six Flags Inc. said late Thursday that it's looking to shed six properties as part of its initiative to sell off noncore assets.
Theme parks near Los Angeles, Houston, Seattle and Denver, as well as properties in Buffalo, N.Y. and Concord, Calif., are up for possible sale. The company said that it is unsure whether it would sell the parks in a single transaction or in series of deals, or it could dismantle and reuse rides and attractions elsewhere and sell the real estate.

SIX7.45, +0.05, +0.7% ) has been looking to reorganize itself since December, when Chairman Daniel Snyder forced out management at the underperforming company. Former ESPN executive Mark Shapiro took the helm as chief executive at the time. He announced the plans to deal the properties Thursday.
"We're making progress with our strategy to focus on the growth of our strongest assets, reduce the company's debt and generate increased value for our shareholders," Shapiro said in a statement.
Late-trading investors dealt shares in the amusement-park operator lower at $6.06, down about 19% from the regular close of $7.45, which was up 5 cents.
The proposed properties include Six Flags Magic Mountain and Hurricane Harbor near Los Angeles; Six Flags Darien Lake near Buffalo; Six Flags Waterworld in Concord; and Six Flags Elitch Gardens in Denver.
Also on the list are Wild Waves and Enchanted Village outside Seattle and Six Flags Splashdown in Houston.
The move is one of several the company has made to dispose of some of its assets. It also has sold the land around its Six Flags Astroworld; agreed to sell its Columbus, Ohio, water park for $2 million; and exercised the right to terminate its lease on a water park in Sacramento, Calif.
It also is trying to sell its two Oklahoma City parks and has received multiple bids. Further, the company is looking to sell excess real estate in Illinois and Missouri.
Six Flags said that sales were up through May 31, but down for the three weeks ended June 18 by 1%. Per-capita guest spending was up, however, by 14% while attendance fell 13%.
The company discontinued deep discounts in season passes in an effort to "restore price and brand integrity and to wean ourselves from those teens who don't spend money in the park," Shapiro said in the statement.
Attendance was negatively impacted by the season-long closure of the park in New Orleans due to damage from Hurricane Katrina. End of Story

GADVwow · « **Reply #1 on:** June 22, 2006, 07:16:53 PM »

Posted on: June 22, 2006, 06:57:00 pm[/size]

From Reuters:

NEW YORK, June 22 (Reuters) - Theme-park operator Six Flags Inc. (SIX.N: Quote, Profile, Research) said on Thursday that reaching its prior outlook for adjusted earnings before interest, taxes, depreciation and amortization would be "extremely difficult," sending its shares down more than 17 percent.

The company, which is in the midst of restructuring its business under new management, also said it was at risk of not complying with certain financial covenants in its bank credit agreement.

In May, Six Flags had forecast adjusted EBIDTA for 2006 of $340 million.

The company will also explore strategic options for six of its properties -- those in Buffalo, New York, Denver, Seattle, Houston, and in Concord and Los Angeles, California, it said.

"What has been unexpected thus far is that the families we are targeting to replace those teens have been harder to attract than anticipated," Chief Executive Mark Shapiro said in a release. "Make no mistake about it, families are coming back ... but not as quickly as we had hoped."

The company also plans further to increase its cash operating expenses by $15 million above its earlier outlook to about $60 million over the course of the year. The extra expense is primarily for additional staffing in the parks, it said.

Six Flags shares were down $1.29, or 17.3 percent, to $6.15 during after-hours trading on Inet.

***************************************************
Biggest surprise here?

SFA is NOT on the list.

SFMM, I have thought for some time, will be sold. The real estate value is just too high for it to have a theme park as its highest and best use.

rjholla2003 · « **Reply #2 on:** June 22, 2006, 07:33:23 PM »

SFA's exclusion from the list really suprised me, other than the fact that they are looking to unload 6 parks. That's a lot of parks. It's definitely a good move IMO though as the chain is still suffering from those growing pains. Talk about trading places; Six Flags unloading parks just as Cedar Fair gobbled up a chain Premier style. The only shocker on the list was SFMM, but I've heard the comments about the property value many times as well. I hope that it does indeed stay an amusement park though.

PcMan · « **Reply #3 on:** June 22, 2006, 07:43:04 PM »

SFMM with all those Coasters and rides and a long History

David Jr · « **Reply #4 on:** June 22, 2006, 07:49:13 PM »

I think it's a little to early to say what parks will definatly go. This list could change a couple times before any decisions are made.

I'm suprised SFNO wasn't on that list. Also, there are alot of non-Flag parks they could unload as well. I think he was running the list up the flagpole so he could see who saluted.

GADVwow · « **Reply #5 on:** June 22, 2006, 08:11:41 PM »

A lot of nonFlag parks?

Really?

A list, please...

(I had no idea that a lot are left, after the recent announcements of Wyandot, Frontier City, Enchanted Village...certainly not a lot...Perhaps because there isn't a lot)

CoasterPete · « **Reply #6 on:** June 22, 2006, 08:43:15 PM »

A little suprised but not too much. Never been to those parks but of course I hope they are sold, not simply dismantled. When this is all said and done it will be interesting to see if Cedar Fair makes the same mistakes Premier made. The new regime is digging out of the Premier mistakes and I think they're on the right track.

Pete

Dubya91 · « **Reply #7 on:** June 22, 2006, 09:37:47 PM »

Wow, that is shocking actually that SFMM is possibly going to be sold. If the land is sold then see it's coasters stored and introduced in other parks as Brand new rides in the future, If the park, as a whole, is sold i can see Busch buying it or CF taking it and making SF's mistake, it doesnt seem SFMM is as solid as we all thought it was...

rjholla2003 · « **Reply #8 on:** June 22, 2006, 10:51:38 PM »

It's not really that the park isn't solid, because it definitely is. The problem with it is that it's so thrill that it will never fit the new SFI's ideal. It would take too much of an effort (and money) to make it into the "Six Flags of the Future."

ChuckR · « **Reply #9 on:** June 23, 2006, 12:09:46 AM »

Wow, this is really shocking news. I mean I can totally see where Shapiro is going with this but they dumped SO much money into SFMM and now there gonna sell it. I hope someone picks it up.

OrlandoRocks · « **Reply #10 on:** June 23, 2006, 12:21:59 AM »

I can't believe they are dumping Six Flags Magic Mountain ! I can only see this as a good move for Six Flags unloading all these parks and focusing on the higher profit parks while improving the $2 billion in debt. I'm really surprised that they haven't listed the park in Mexico City and La Ronde.

PcMan · « **Reply #11 on:** June 23, 2006, 10:16:34 AM »

If the park does close and does not operate as a park anymore.
Sold for the land value alone.
Look for "new" coasters in the next few years at other parks.
The local season pass holders I'm sure are not happy.
Maybe Shapiro is thinking the "big one" is coming Earhtquake that is.
Unload it now before the land value drops.Think New Orleans

Fjask · « **Reply #12 on:** June 23, 2006, 11:33:05 AM »

Wow, SFMM, that surprised me. When I think about it, was it inevitable? The park has yet to get all the rides running at full capacity, the park is on valuable land, and it is in a place where it would fail if it went family friendly. It seams as more of a liability than an asset to SF.

chilled182 · « **Reply #13 on:** June 23, 2006, 11:42:42 AM »

You know, six flags is going towards a huge family park effort right now, and i suppose that this isnt too crazy.

Magic mountain is not a family park. They will be sold to another chain i am sure, just who can afford to buy a park that big is what id like to know.

wouldnt it be cool to see disney buy it, and than add it to the california collection. I would love to see what they could do with that park.

sir clinksalot · « **Reply #14 on:** June 23, 2006, 12:30:37 PM »

Six Flags stock went down 19% today after the announcement ... I don't think it will happen.

And rumor is that the city of Santa Clarita (where SFMM is) wants to keep it as a park. It creates jobs and it puts them on the map.

WadeJ · « **Reply #15 on:** June 23, 2006, 03:25:57 PM »

Just a few weeks ago Six Flags was trading over 9 bucks. Its now 5 something. That is SCARY. It is literally almost where it was last Spring. I agree Gregg, investors did not react well to this news at all so perhaps they will continue evaluting things.

With that said, I don't think overall the performance was all that bad. Remember, turnstile clicks aren't everything. They were expecting lower numbers during the turn-around process.

Dubya91 · « **Reply #16 on:** June 23, 2006, 03:31:10 PM »

Quote from: OrlandoRocks on June 23, 2006, 12:21:59 AM

I can't believe they are dumping Six Flags Magic Mountain ! I can only see this as a good move for Six Flags unloading all these parks and focusing on the higher profit parks while improving the $2 billion in debt. I'm really surprised that they haven't listed the park in Mexico City and La Ronde.

La Ronde is family friendly and makes money, there are not other parks within that area, any day now it will be flagged. Wow the bottom just dropped out of SF stock, all the stockholders must be frustrated and lost, can Shapiro make it rebound? As for MM, The park wasnt run the way it should from what I hear, when you run a park half-assed people arent going to think much of it and essentially not come and spend money in the park, CF would LOVE to get its hands on it, If CF does take control of it, I would be ALOT of money they would run it like it should be run. Also, I believe the coasters can handle an earthquake, I know they can withstand most hurricanes but Im not 100% sure about earthquakes. Also what is shapiro thinking not selling SFNO, the park is only a few years away from being an artifical reef with some fish swimming through through the coasters....

Fjask · « **Reply #17 on:** June 23, 2006, 03:50:06 PM »

^Would Cedar Fair really want to buy MM right after they bought all the Paramount Parks?

PcMan · « **Reply #18 on:** June 23, 2006, 04:00:38 PM »

Looks like a good time to get in on the Stock price.
I know it will bounce

Two Sides of Six Flags http://tinyurl.com/mfyte

but with the shares approaching their lowest prices since Shapiro took over six months ago, this may be a good opportunity to take advantage of the calamity, go against the crowd, and brave the turnstile click as an investor.

Exploring the possibility of unloading Magic Mountain couldn't have been easy. It's one of the chain's top draws. However, in touring Great Adventure with Shapiro last month, he relayed to me the difficulty in turning Magic Mountain around. It's positioned as a thrill park with its massive collection of coasters at a time when the company is trying to attract younger visitors. That's a strategy that would work at most of the other parks, but the family market in Southern California is crowded with Disneyland, Knott's, Sea World, and Legoland. The popular park and prime real estate may also fetch a king's ransom, which would help alleviate the debt problem and relieve the company of having to market one park against the grain of its other regional attractions.

No one said this was going to be easy. It's just not much of a surprise. In a commentary back

sir clinksalot · « **Reply #19 on:** June 23, 2006, 06:44:02 PM »

http://biz.yahoo.com/ap/060623/six_flags_parks.html?.v=1

Quote

Correction: June 22 Six Flags Story
Friday June 23, 6:11 pm ET

NEW YORK (AP) -- In a June 22 story about Six Flags Inc. mulling options for several of its theme parks, The Associated Press reported erroneously that the company may explore closure of the parks.

Instead, if Six Flags cannot sell the parks, the company will consider selling the land for real estate development purposes and then dismantling parts of the parks and redeploying them for use at other Six Flags properties.

Deadman · « **Reply #20 on:** June 24, 2006, 12:16:22 AM »

The story on Theme Park Insider was just Dugg (placed on the very popular social bookmarking site digg.com), let's hope they can handle the bandwidth.

GADVwow · « **Reply #21 on:** June 25, 2006, 10:04:12 AM »

Cedar Fair will NOT be buying MM, in my opinion.

They more than have their hands full with the debt from their acquisition of Paramount Parks soon staring at them.

If MM is sold, it will no doubt end up being for housing. What Santa Clarita wants is about as important as what a local town wants when GM or Ford decides to close an assembly plant. Nice noises will be made, but the overall effect on the plans will be nothing.

Dubya91 · « **Reply #22 on:** June 25, 2006, 03:33:30 PM »

^ I have to disagree with you on this one. I think CF would buy MM for a couple of reasons. First off, It's a thrill park and that is was CF likes to focus on, CF is open to the fact its a thrill park and may shy away from the families. Second, They can give the park the jumpstart it needs to put it on the map, if they made every ride operate in even at 2/3 Capacity they would be raking in more money. Also if they maintained every ride you get more people cause not only would the rides be operating, they would be reliable! With the right ammount of TLC put into that park it can be a real money cow, CF can put this TLC in the park that it needs. Thats even if MM is sold, the stock market will be the key as that is Snyders department and hired Shapiro to make it go up...

GADVwow · « **Reply #23 on:** June 25, 2006, 07:25:46 PM »

CF will NOT be able to match what real estate developers will offer for the land. And SF's PRIMARY goal will be getting the largest amount possible in any sale, NOT keeping the park running as a park. SF's creditors will be certain to make that true.

And CF's lenders would not be amused with them trying to take on MM. Nor would CF's unitholders, in my humble opinion.
Posted on: June 25, 2006, 05:58:42 pm

An interesting and informative article:

http://www.msnbc.msn.com/id/13515092/

overlord · « **Reply #24 on:** June 26, 2006, 09:39:31 AM »

$500 million eh? If thats all, you might as well hold on to the park. I guess we wil have to wait and see what Shapiro does.

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Author Topic: Six Flags to sell Six Parks (Read 7613 times)