News Cedar Fair Merges with Six Flags

[R75]

Any of the CF/SF parks on the outside looking in are very much in trouble. Maybe not in the immediate, but certainly in the next few years.

Also, I cannot for the life of me imagine why people at CF thought this was a good idea. SF has been a disaster of a corporation, and partnering with them will only bring CF down instead of bringing both parties up.

This sucks.

 

[qdeathstar's MAGA friend]

Oof.

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[warfelg]

Any of the CF/SF parks on the outside looking in are very much in trouble. Maybe not in the immediate, but certainly in the next few years.

Also, I cannot for the life of me imagine why people at CF thought this was a good idea. SF has been a disaster of a corporation, and partnering with them will only bring CF down instead of bringing both parties up.

This sucks.

One press release said that it opens them to do more in every park. I’m still trying to figure that out.

 

[R75]

One press release said that it opens them to do more in every park. I’m still trying to figure that out.

They couldn’t manage what they had. Even CF has let some of their lower-tier parks decline in recent years, and that was pre-pandemic.

 

[warfelg]

They couldn’t manage what they had. Even CF has let some of their lower-tier parks decline in recent years, and that was pre-pandemic.

Yea. It’s baffling. This is the quote that made me do that:

"Our merger with Six Flags will bring together two of North America’s iconic amusement park companies to establish a highly diversified footprint and a more robust operating model to enhance park offerings and performance," Richard Zimmerman, president and CEO of Cedar Fair, said.

 

[Zachary]

I say this completely seriously and sincerely: I really hope Cedar Fair did their homework to get a full understanding of the parks they're actually purchasing. The disrepair and neglect throughout much of the Six Flags chain right now is IMMENSE and, by itself, will require a tremendously significant investment. I really hope Cedar Fair is fully aware of just how much of a fixer-upper chain they're buying here infrastructure-wise.

 

[warfelg]

I say this completely seriously and sincerely: I really hope Cedar Fair did their homework to get a full understanding of the parks they're actually purchasing. The disrepair and neglect throughout must of the Six Flags chain right now is IMMENSE and, by itself, will require a tremendously significant investment. I really hope Cedar Fair is fully aware of just how much of a fixer-upper chain they're buying here infrastructure-wise.

I’m concerned about this as well and why part of my assumption might be that they will sell off some of the smaller parks in a year or two, shutter a park or two, and use those assets to help the remaining parks.

that they view "Other Forms of Entertainment Outside of the Home" (such as bowling, skiing, sports games, theaters, etc)

 

[R75]

I’m concerned about this as well and why part of my assumption might be that they will sell off some of the smaller parks in a year or two, shutter a park or two, and use those assets to help the remaining parks.

Totally agree here. I think some parks will essentially be liquidated and closed or premier attractions at SF parks could go to CF parks (I don’t see it happening the other way around, honestly).

Regardless, this move seems short-sighted when you consider the baggage coming along with SF. Their current leadership is still going to hold positions of influence in this merged company, and from the reports I’ve heard and previous SF calls that have been released to the public, they lack serious leadership capability when it comes to successfully running amusement parks.

I hope I’m wrong, but I just think this is the amusement industry equivalent of Sears and Kmart merging over 20 years ago, and look how that turned out.

 

[Zachary]

My exact reaction. I call "cope" if these people think they have a path to winning people over en masse from the likes of sports games, skiing, and theaters. Amusement parks really aren't much like any of those things—in audience, setting, activity, purpose, etc.

I'm sure they are only getting 5% of the entertainment dollars spent—that doesn't mean the ceiling is significantly higher than that though for the current amusement park format.

 

[b.mac]

I say this completely seriously and sincerely: I really hope Cedar Fair did their homework to get a full understanding of the parks they're actually purchasing. The disrepair and neglect throughout much of the Six Flags chain right now is IMMENSE and, by itself, will require a tremendously significant investment. I really hope Cedar Fair is fully aware of just how much of a fixer-upper chain they're buying here infrastructure-wise.

Well the good news is that if they invest the combined Capex between Six Flags ($180 million) and Cedar Fair ($200 million) then that means the average Capex across the parks will be about 35% better for the Six Flags parks under the new merger. The problem is their expected margins mean that $380 million in Capex is more than likely going to be way higher than what actually gets invested.

 

[outhikn]

For what it is worth, when I was out there a few years ago, I much preferred SFDK to CGA. Things may have changed in the interim, of course.

@Nicole - I spent a couple of days at each park back in July, and you are correct where SFDK is still the better of the two Bay Area parks, primarily because of the animals.

The setting on the lake is beautiful at SFDK (for at least a portion of the park). And the animials habitats - including the butterfly sanctuary, which I believe was their new addition for 2023, was a nice and relaxing escape - really distinguish it from the traditional amusement/thrill park.

However what I was really frustrated by from my recent visit at SFDK was general park operations (which seems to be plaguing a number of SF parks). That is: One train ops on the major coasters during peak summer months; Staggered opening of the major rides throughout the day; And general staffing shortages.

I did not notice a lot of this at CGA. So again these are the issues that really worry me about this merger. But hopefully seeing a number of the CF executives keep their position gives me just a small bit of hope for continued/better operation of the existing CF parks.

 

[Thriller]

There is absolutely no benefit of this to Cedar Fair, other than their executive somehow filling their pockets. Six flags is cash-strapped. They have more outstanding invoices in cash. They can’t even install their little kiddie coasters on time.

This, unfortunately, is just going to bring a Cedar Fair down into that quagmire

 

[DE_Creative]

There is absolutely no benefit of this to Cedar Fair, other than their executive somehow filling their pockets. Six flags is cash-strapped. They have more outstanding invoices in cash. They can’t even install their little kiddie coasters on time.

This, unfortunately, is just going to bring a Cedar Fair down into that quagmire

Suddenly every single thoosie on the planet is an expert on business and management

 

[horsesboy]

There is absolutely no benefit of this to Cedar Fair, other than their executive somehow filling their pockets. Six flags is cash-strapped. They have more outstanding invoices in cash. They can’t even install their little kiddie coasters on time.

This, unfortunately, is just going to bring a Cedar Fair down into that quagmire

This gives CF a dominating market share of business and even almost a monopoly in some parts of the country. Yes SF has been fairly cash strapped but the combined company is in a position to gradually pay that down and by having little competition in many area probably make significantly less capital investment in the near term. From a business perspective there are significant plusses to this deal from a consumer or employee perspective not so much.

 

[bill s]

I'm seeing some really dramatic predictions of doom and gloom, almost surely exaggerated. The main thing we know is there could be change, and maybe there's reason to think that's bad. But if they sell parks, who to? SF/CF already own it. It does open up a lot of ride relocation possibilities though.

Selim's plan seemed to me to make SF more like CF, although flawed in action. This merger could work, the chain is now huge.

 

[warfelg]

Selim's plan seemed to me to make SF more like CF, although flawed in action. This merger could work, the chain is now huge.

Sorry I’m kinda answering/replying in reverse here but the chain is huge - likely too big. That’s going to cause broblems. It was two parks struggling to do enough for all their parks as is. I don’t see how effectively doubling the number of struggling parks without doubling the successful parks is going to work.

But if they sell parks, who to? SF/CF already own it. It does open up a lot of ride relocation possibilities though.

There’s still a lot of amusement companies out there:
Herschend, HerCo, Merlin, OCT (Chinese operating company), Universal, SEAS, Parques Reunidos, Premier, Disney

I would put HerCo, Disney, PR in the most likely not looking to expand. Universal and Herschend could but haven’t seen desire. Merlin, Premier, and SEAS have shown efforts to grow. And OCT - because I will not count out Chinese companies.

I'm seeing some really dramatic predictions of doom and gloom, almost surely exaggerated. The main thing we know is there could be change, and maybe there's reason to think that's bad.

Some of it is just meme-ing the situation. I think that there’s not “doom and glooming” but more just the thought process that it’s going to be tough to operate all of that with taking on all that debt and having all those assets to manage.

 

[Zachary]

But if they sell parks, who to?

Land developers, just like with CGA.

Selling weapons to your enemies doesn't really make sense. New Six Flags is large enough that there's basically no market they could cleanly exit—the property they would be selling would compete with another property they own. Because of this, in my assessment, they're highly disincentived to sell parks as parks. Stripping duplicative or underperforming parks in smaller or shrinking markets of all of their useful assets and selling the land beneath them off for other uses is far more sane from their POV.

 

[warfelg]

Land developers, just like with CGA.

Selling weapons to your enemies doesn't really make sense. New Six Flags is large enough that there's basically no market they could cleanly exit—the property they would be selling would compete with another property they own. Because of this, in my assessment, they're highly disincentived to sell parks as parks. Stripping duplicative or underperforming parks in smaller or shrinking markets and selling the land off for other uses is far more sane from their POV.

I think this is one of the few places you hope that someone gets involved and forces them to sell pre-merger. Like in the Great Lakes area - who can compete with the new Six Flags? They own the amusement industry from Ohio to Minnesota down to Missouri. If they decided to shutter and sell the land of 1/2 the parks it’s a big deal. Especially at the costs of a ground up park these days, no one is looking to do that.

 

[willrobs3]

Some of it is just meme-ing the situation. I think that there’s not “doom and glooming” but more just the thought process that it’s going to be tough to operate all of that with taking on all that debt and having all those assets to manage.

More like - wildly unfounded speculation and fear of the unknown.

But it is fun to watch.

 

[Mushroom]

Some of it is just meme-ing the situation. I think that there’s not “doom and glooming” but more just the thought process that it’s going to be tough to operate all of that with taking on all that debt and having all those assets to manage.

What debt is being taken on?