AmyUD06
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Thanks! I guess I was hoping too much to think they'd actually name the parks on Slide 7 haha.
News Cedar Fair Merges with Six Flags
- Thread starter horsesboy
- Start date
Safe to say that assuming what parks are safe, can be determined if they received a passholder survey last month, in which 13 of the properties did. As them being CP, KI, CW, Carrowinds, KD, Dorney, SFMM, SFGAm, SFGAdv, SFOT, SFOG, SFNE, and SFDK. The surveys mean that those 13 are a profitable, and the rest that didn't receive one as SFSTL for example, are not that profitable.
I do think this might be a good indicator but there’s parks outside of this list that I can’t at all imagine them selling/closing. Knotts being the big one but Six Flags Mexico too.
Also, to remind everyone, it's not about which parks are or are not profitable. Though not explicitly stated, the earnings call suggested that all of the parks in the portfolio are profitable. The bar isn't profitably, it's ADEQUATE profitablity to justify continued reinvestment in a market where there's a high enough ceiling for that reinvestment to potentially deliver SUBSTANTIAL shareholder value.
I think the survey angle is an interesting one, but I wouldn't put too much weight into it given what was said today re: parks that fail to perform adequately post-investment being downgraded to non-core status. Maybe it's an indicator that those parks are either regarded as "core-core" or they're on the verge of test balloon-style investment to determine their status, but I wouldn't read too much into parks that aren't included as there could be a wide array of reasons for that.
I think the survey angle is an interesting one, but I wouldn't put too much weight into it given what was said today re: parks that fail to perform adequately post-investment being downgraded to non-core status. Maybe it's an indicator that those parks are either regarded as "core-core" or they're on the verge of test balloon-style investment to determine their status, but I wouldn't read too much into parks that aren't included as there could be a wide array of reasons for that.
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AmyUD06
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Having read through the transcript of the call, and reviewed the slides, it sounds like there's more than just "good" and "bad" parks in their eyes
- The "core," high-performing parks that have been seeing investment and will continue to do so.
- The "core," low-performing parks that they're going to try investing in, and if it doesn't make it into a high-performing park, the category will change.
- The "non-core," low-performing parks that may be salvageable into profitable parks.
- The "non-core", low-performing parks that are on the immediate chopping block if they can't get their act together.
- The "non-core" parks that are already officially slated for closure (SFA, CGA).
Splitting the income statement by over and under performing parks is not something you see every day publicly. If I had to speculate, a company split is seriously on the table with how they are associating a lot of below the line costs to the low performance group. The low performance company could then be run through bankruptcy to deal with the debt prpblems, while the high performance company invests and raises prices accordingly.
I think the most obvious thing to do is sell the management contract for the small waterparks and ERP properties (Darien Lake, Frontier City) and La Ronde, etc. There is no real reason for them to invest in those properties, they only obtain a management fee. Many are unbranded with neither Peanuts nor DC and LT...heck one is even a Pepsi park and not Coke, so from the POV of bulk buying and maintaining a solid brand, that drags down the company. It's a distraction to have to have more staffing and management in place for those parks. Schlitterbahn Galveston is another, because that is a lease and non-owned, so in a sense it is like CGA. About a year ago they said they were leaning to renewing the lease, but without a hotel or other revenue generators on site, that may have changed. Schlitterbahn New Braunfels is better being "attached" to Fiesta Texas than Galveston, IMO, for cross marketing and because they have the resort accommodation side.
Also, I tend to agree on the point about the animals. I don't know the Northern California real estate market much by area, but Vallejo is about an hour from CGA I think? Is the land there as valuable as in Santa Clara? Could Discovery Kingdom be sold for development too? Move rides around, move animals to SF Great Adventure? Sell the marine animals to United Parks? Sell all animals to United Parks? Sell the park to United Parks if they wanted back in the California market for Busch (they used to be in Van Nuys years ago, for those too young to remember that.) Or move them to Sea World San Diego or elsewhere.
I was hoping they'd keep animals and expand, but I think that's just an extra year round expense they don't have the luxury of keeping now....animals need feeding and care 24/7, not just when the park is open and those positions I imagine that care are more career positions and not a teenager being paid minimum wage with no benefits.
I was hoping they'd keep animals and expand, but I think that's just an extra year round expense they don't have the luxury of keeping now....animals need feeding and care 24/7, not just when the park is open and those positions I imagine that care are more career positions and not a teenager being paid minimum wage with no benefits.
While it's true SF has little reason to invest in properties they don't own (outside of contractual obligations), they keep the bulk of the profits from the EPR properties under a triple-net lease, while EPR takes a small fee and washes their hands of having to manage the park.
They won't ditch the leased parks, in fact I'd argue that the leased parks are the safest of all of them. They may not see much investment, but if SF is holding the lease it keeps the park out of the hands of a competitor.
Such a shitty way of putting it (for SF not you).
Saying that “adequate” profitability is what matters then it is basically corporate speak for “we’re going to have no rhyme or reason, it’s just going to be the ones we want to pick. I am really keeping an eye on the North East. Great Escape, Darien Lake, New England, Dorney, Great Adventure, Canada’s Wonderland, and La Gronde are relatively close and that’s with SFA already closed.
As time goes on this merger and the practices get worse and worse. CF was on an upswing, then did this. And they were trying to ‘calm’ everyone by saying LCF people were running the show, but all operations seems to be much more LSF with their functioning.
AmyUD06
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The world "relatively" is doing a lot of work in "relatively close" there haha. The only two of those parks you can consider to be the same market are Dorney and SFGAdv. Not a single non-enthusiast I've ever talked to has ever heard of any of those other parks, except maybe Canada's Wonderland, and I grew up a town over from SFGAdv and worked there for 6 years in my youth, frequent Philadelphia, and live in northern Delaware. Non-enthusiasts aren't traveling 3+ hours for a non-destination like most of those listed.
I'm reading this as in people are more likely going to want to visit the larger, more well-known parks in their region if given the option.
In the same triangle of driving for the 3 Texas parks, there are 5 in the North East. And SF isn’t going to sell those parks. They are going to shutter them for good. I can see them doing away with Dorney/Great Adv and Darien Lake. Heck I can even see an argument for SFNE to be thought of.
I told a friend that I feel like we’re one more quarterly call away from fans trying to come up with reasons to get ride of other parks rather than why to keep theirs.
I'm not so sure about Dorney, it's recently received solid attraction investments and I'm guessing it'd be premature to pull the plug before finding out if they can at least recoup the ride purchase and construction costs.
I think that the odds are good that either Dorney or Great Adventure go away I don't see both leaving as I don't see SF being willing to drop the Philly and NYC market at least without several years worth of fight and effort. I think at this point you could probably flip a coin as to which is more is likely thr more likely to depart.
Yeah this is where I fall, and I feel a similar way about Valleyfair and Worlds of Fun (assuming they get a Timberwolf replacement soon). I think they’re going to see how their upcoming investments perform before deciding where those parks fall in the chain.
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