netdvn wrote:SF gets to have more trash cans and concrete theming?
Seriously though, at this point I'm personally not jumping to conclusions about this sale. On top of that, if this sale does come through, I see SF going back to the SF of the late 90s, early 00s (building bigger rides in favor of family-style attractions with maybe a bit of Planet Snoopy retheming).
I have to agree with you on that one. Cedar is still building big rides and Six Flags majority customers are thrill seekers. I don't mind the Planet Snoopy theme at all. I think it was cool for Cedar to install it inside Kings Dominion, and I can't wait to see it this summer. I wonder how the season passes are going to change? Will they start doing three kings of passes, where 1 just gets you into that park, the other gets you into all the parks, and then the 3rd one is like a V.I.P treatment?
WE ARE NO LONGER GOING TO SPECULATE ON WHAT HAPPENS IF CEDAR FAIR AND SIX FLAGS ARE CO-JOINED TOGETHER IN THIS THREAD! PLEASE REPEAT!
The company trying to buy Cedar Fair has an uphill batlle with their ambitions.
If the situation progresses to the stage where a Cedar Fair / Six Flags union is more feasible we can discuss when we know for certain whom the new owner will be. Until that time it is not worth discussing.
themeparkman25 wrote:^But see, that is like saying Starbucks doesn't have a monopoly because there are millions of other ways to purchase a drink. In the specific area of the theme park industry, a Six Flags/Cedar Fair merger would be like Starbucks in the sense that there is little substitutes readily available and the market price being driven by the largest holder (SF/CF). So I guess you are right in the sense that it more properly fits the definition of an oligopoly, though I still think the government would not allow the merger to happen.
Jordan "Doesn't think Joey and I will ever agree" Darrington
The coffee house and amusement park industries are much more an example of "monopolistic competition" than anything else. There are market powers that can exert their power as a monopoly would to gain a short term advantage, but it is not going to stop existing competitors from matching their tactics, or new entrants in the long run.
Using the coffee example, that is why you have Seattle's Best @ Border Stores, lots of Coffee Bean & Tea (at least in So Cal), Peet's, Tully's, McCafe @ McDonalds, and tons of independent shops. Using the amusement industry example, that is why good ticket promotions get copied everywhere (all you can eat passes, buy a day/get the year free, front of the line passes, etc.), parks building their own on-site resorts, indoor waterparks popping up next to established theme parks, new major attractions being built, and so on.
...And that's the end of my economics lesson...
But as Larry said, it's all speculation, so it's pointless to discuss at this time.
Six Flags Inc. bondholders are trying to settle their battle for control of the bankrupt theme park company after a two-week long trial, Chief Financial Officer Jeff Speed said in an interview this morning.
The company and two sets of competing bondholders agreed to delay the trial in U.S. Bankruptcy Court in Wilmington, Delaware in order to try to settle their differences, Speed said. Without a settlement, the trial would continue with a rare Saturday session in the Wilmington court.
Under the proposal being discussed today, lower ranking bondholders would own the company after a new stock offering was used to raise enough money to pay off lenders and higher ranking bondholders, said a person familiar with the negotiations.
Two groups of bondholders are fighting for control of Six Flags. Both have proposed borrowing money to help pay off $1.1 billion in bank debt and converting their bonds to equity. Six Flags, based in New York, filed for bankruptcy in June with plans to cut debt by $1.8 billion. One group, whose $420 million in debt is related to Six Flags Operations, is allied with managers. Those so-called SFO noteholders currently back a proposal that would give them and company managers 96 percent of the new stock the company plans to issue, according to court papers. Under the alternative being discussed, the company would be owned by a competing group of junior bondholders, whose $896 million debt was issued by the parent corporation, Six Flags Inc.
The lead case is In re Premier International Holdings Inc., 09-12019, U.S. Bankruptcy Court, District of Delaware (Wilmington).
Change the scheme, Alter the mood! Electrify the boys and girls if you would be so kind!
The current management is staying, and an agreement has been reached.
WILMINGTON, Del., March 19 (Reuters) - A group of bondholders led by Stark Investments will take control of Six Flags Inc (SIXFQ.OB) under a proposal announced on Friday that would lift the theme park operator out of bankruptcy.
Under the proposal, which requires court approval, the Stark group will invest $725 million in new equity in Six Flags, according to the company's attorney, Paul Harner of Paul, Hastings, Janofsky & Walker.
Under the plan, bondholders will also borrow $1.1 billion. The money will go to pay off creditors and provide working capital after the company emerges from bankruptcy.
Under the proposal, management will have warrants and options worth up to 15 percent of the company's equity. The rest will be owned by the group led by Stark, a large hedge fund based in Milwaukee.
The proposed settlement would also mean a change in strategy by the Stark bondholders, known as the SFI Noteholders. Before the trial, they indicated they were planning on replacing management if their plan of reorganization was adopted.
Now, current management will remain in place under the plan, Harner said. That means that Daniel Snyder, the owner of the Washington Redskins football team who took over Six Flags after a proxy fight in 2005, will remain as chairman. Mark Shapiro, whom Snyder brought in from ESPN to run Six Flags, will stay as chief executive.
A spokeswoman for Six Flags said the plan is now fully consensual and that some details still had to be worked out, such as completing the debt finance.
"We are absolutely comfortable with the level of debt going forward which is why we reached a deal," said Sandra Daniels, the Six Flags spokeswoman in an email. "The SFI note holders have stepped up and written checks for $725 million in new equity, paying off all the creditors senior to them -- that action more than anything signals their confidence in the company and the management team."
The proposed deal came on the ninth day of a trial in which the company was seeking approval of its plan of reorganization.
The company had adopted a plan drafted by a group of senior bondholders known as the SFO Noteholders, a group led by Avenue Capital Group. The company's plan proposed giving the Avenue Capital bondholders control in exchange for their roughly $420 million in debt. Under Friday's settlement, they would be paid in full.
While negotiations have continued during the trial, a source involved in the talks said the Stark group deposited $655 million in escrow last night. "That moved things along," the source said.
A major issue leading up to the trial had been the ability of the Stark group to finance its plan of reorganization. On the eve of the trial, it got a financing commitment from Goldman Sachs Lending Partners LLC (GS.N), UBS Loan Finance LLC and UBS Securities LLC (UBSN.VX).
Friday's settlement is expected to go before the court for approval on April 16, Daniels said, with the company expecting to emerge from bankruptcy shortly thereafter.
Bonds issued by Six Flags Inc, 9.625 percent notes due in June 2014, rose to 28.5 cents on the dollar on Friday, up 1.5 cents on the day, according to high-yield research firm KDP Investment Advisors.
The company still faces some hurdles.
Lance Laifer of Resilient Capital said he plans to continue a "vigorous fight" for a recovery. Resilient owns PIERS notes that will be wiped out under the settlement.
Laifer said the agreement "further highlights the fact that management and the board of directors are more interested in lining their own pockets with equity than with fulfilling even their most basic fiduciary obligations."
Laifer said Friday's proposal values the company at around $2.3 billion. The company's plan drafted by Avenue Capital had valued the company at around $1.6 billion.
"This agreement proves that the valuation works submitted by the so-called experts in the case dramatically undervalued the assets of Six Flags," Laifer said.
Six Flags has been largely unprofitable for a decade, making it an unlikely candidate for a pricey courtroom battle.
However, the debt that kept the company in the red also paid for ever larger and more thrilling rides, which creates a high barrier to potential competition.
For the Stark group, it remains to be seen if they acquired Six Flags for a sensible price and whether the debt has been reduced to a manageable level.
Joel Luton, the director of research for APS Financial in Austin, Texas, noted that theme parks have been on investors' radar in the last year and the trial revealed several parties were interested in the company.
He said Six Flags could be a way to play an economic recovery, although it might also do well in a downturn.
"There is a story there that this is an alternative to the Disney World vacations," he said.
Stark Investments did not return calls seeking comment.
A spokesman for Avenue Capital Group declined to comment.
As a part of its latest initiative to reach out to its audience, Six Flags put together a conference call for the twenty-five most active Twitter and Facebook fans to speak with CEO Mark Shapiro directly. Shapiro was surprisingly candid in all of his answers, speaking about projects within the company, his pet peeves and more. It was a truly unique call in that he spoke with a level of honesty not often seen by executives of a similar standing.
I have provided a short recap of the more significant points in summary with a more detailed transcript of the call beneath it.
Bottom Line Recap:
• This is set to be the first of many “super-fan conference calls” meant to connect the company with its guests. • The Cedar Fair/Six Flags merger-thru-Apollo rumor is completely untrue. • As of this morning (3.23.10), all Six Flags properties will offer the Six Flags Parent Pass, which serves as an equivalent to the child swap system. This change was promised by Shapiro after one caller brought up the issue that one park had the system, but another didn’t. • Despite its emergence from bankruptcy, things will not change with Kentucky Kingdom. Six Flags will no longer be associated with the park, but has agreed to leave everything as is besides its current inventory while the Kentucky State Fair Board looks at the site’s potential future. • Six Flags will launch an iPhone application in April for its guests as a social networking and GPS tool. • Six Flags is very much intent on using prototypical rides in its future. • Six Flags is in no way working with B&M to open a prototype attraction of any sort at this time. • Six Flags America’s Thomas Town is set to open on Memorial Day, but construction has been delayed due to the weather. Shapiro is pushing hard for an on-time opening. • Mark Shapiro expects Six Flags America to be considered for the title of “Best Park” in the Six Flags chain by the end of this year. • Six Flags looking into new ways to expand offerings within the parks like fireworks, parades, ride renovations and rethemes and more IP-based concepts (i.e. Terminator Laser Battle, The Mummy: Tomb of the Dragon Emperor, etc…). • Contrary to popular belief, Six Flags does not have a formal ride rotation program. • Bamboozle Roadshow will be an up-charge event at the Six Flags parks • New shows will continue to be added to the parks • Season pass sales are doing very well right now, partially attributed to lowered prices • Planning for the 50th anniversary/2011 season is right on track • Don’t expect Flash Pass in the water parks anytime soon • The Dark Knight coaster wasn’t meant to be an intense experience, rather a family coaster • Six Flags turned down Warner Brother’s motion to create a Speed Racer attraction to tie in with the film • Six Flags TV has been successful and will get an expanded presence in the parks during the coming years.
Call Transcript (written during the call itself)
Mark Shapiro starts, welcoming everyone to the first “Super-fan Conference Call.” He defines the “super fan,” as those who continue to keep Six Flags alive and moving. Those guests that visit the parks as loyal customers, delivering feedback, ideas and staying up to date through their various social mediums. He describes how the idea of the conference call came to be—noting how he and his team thought about how to better connect with the fans. Shapiro wants to be very honest and direct with fans and reporters and he wants feedback including criticisms in order to improve its image, product, service and quality. He is very happy with his management team’s progress over the last four years. Pending tonight’s response, he wants this to be the first of what will hopefully be many calls of the sort to come, describes the importance of the fans.
On the topic of Six Flags’ pro’s and con’s, he “will not run from problems nor gloat about their progresses.”
Moving into the last part of his introduction, he does a quick overview of the upcoming season for the Six Flags parks.
The company has seen record crowds for Six Flags Fiesta Texas and Six Flags Over Texas during this Spring Break. He comments that many of the parks are going strong and are currently preparing to open soon. Mark himself will be out at Great Adventure on this coming Friday (3.26.10).
In looking forward, Mark Shapiro and his team want to bring variety to the parks. To do so, they will launch several new attractions across the chain.
Shapiro discusses the Little Dipper moving to Six Flags Great America, noting that he rode it as a child, and that when he saw it on sale he sent his team to the auction in order to save it. He is very happy to have saved it and is looking forward to seeing it open with the park this season. He also reminds us that Six Flags Great America will also get a copy of the Glow in the Park Parade, which has been a major success in the other parks.
A brief but simple note, he mentions that Six Flags is looking into fireworks as new options for the park.
This year, Magic Mountain will be getting Mr. Six’s Dance Coaster, and will also be expanding its water park with Mr. Six’s Splash Island. Six Flags New England and Magic Mountain will both get Mr. Six’s Splash Island, which include renovated and expanded water park areas.
Six Flags Great Adventure will be installing the “Tornado,” a new slide aimed at the tween and teen audience.
Six Flags America will be getting the largest Thomas Town yet. This will be the park’s largest expansion in over a decade, featuring eight new attractions, one new retail store and several characters new to the park. This is meant to be the first major kids offering expansion for the park.
La Ronde will be getting a 5-inversion coaster and will also open the Terminator Laser Battle this year.
The successful Starburst Concert series will be returning with big names like Mitchell Musso and Jordan Sparks this year. This series is included with standard admission to the parks.
The Bamboozle Roadshow is visiting several of the Six Flags parks, which is something that Shapiro is very excited about, expressing his pleasure with the artists on the tour. Tickets are now available for this up-charge event.
Shapiro makes a quite mention that many new shows will be coming to the parks in the years ahead.
Six Flags has lowered the price of season passes for its parks. They have also introduced the Play Pass, which has been getting off to a “pretty brisk start.” He uses the comparison between the price of a single day at Disney and the price of an entire season at the local Six Flags park. Season pass sales are way up and passholders are getting added rewards and benefits such as free soda and line-jump passes.
Looking forward to the 2011 season, Shapiro comments that things are “right on tap for 50th anniversary with bankruptcy behind us.” He says that they are already planning for 2011 and are employing the growing understanding that staying close to home has become paramount for their business.
The question and answer period begins.
Q: Is the trend of renovating and retheming current rides something to continue in the future? Will we see more theming returning to the park? A: Mark says that we will continue to see improvements throughout the park, including theming and cleaning the park in order to set the proper tone for “what the parks are and what they will always be.” Getting out of bankruptcy is one of the greatest things to happen to Six Flags in its history, but earlier, the company was teetering on the edge of bankruptcy, so they couldn’t take a chance on reinvesting in the appearance of the parks because former management didn’t recognize importance of atmosphere over new additions each year. Mark recognizes value of the proper balance between new additions and the appropriate park atmosphere and the balanced investments in both. “We will have a better balance sheet to invest in both areas and will spend more in getting these parks back to the way they should be with different sections themed to the areas they are in. We may openly retheme the areas we already have or may start over completely with certain areas. They may retheme rides like was done with Bizarro when moving forward. Shapiro would like to bring back more flat rides into the parks. He notes that, “its not about savings, but what’s best for the parks overall.”
Q: When you go to the parks, what are some of the things that you see and don’t like and want to change? And how do you go about changing them? A: Mark cannot stand a messy park and wants to see clear paths in the parks. He wants Six Flags to be known for being clean. If he sees something, he will pick it up himself, but has also implemented a policy that all staff, including management, will walk around with “pickers” to keep the midways clean. His other pet peeve is with the ride operators themselves. If the operators or people behind the registers aren’t moving quickly, he is bothered. He likes to see efficiency and friendliness in his staff, not laziness and sloth. He can deal with the lines if the staff are being friendly, outgoing and smiling. “Accountability is paramount for Six Flags, and is a requirement for all staff. If you can’t be accountable, you won’t work for Six Flags.”
Q: Will Six Flags become more accommodating for guests with food allergies? Can food items be labeled with ingredients to help ensure that the ingredients are safely labeled for concerned families? A: “We do have a food allergy policy in place by allowing families with food allergies to bring in their own special food and are very careful about cross-contamination issues.” At the end of the day, Six Flags has found difficulty addressing every individual allergy and has therefore created the above policy. Mark doesn’t think they’ll ever find a way to please everyone in their search, but is hoping to expand the existing offerings to better serve those affected.
Q: Is the Cedar Fair/Six Flags merger-through-Apollo rumor at all true? A: “This is in no way true.” Apollo hasn’t even gotten Cedar Fair yet. “Apollo is a great company and will do great things with Cedar Fair and will continue to make Cedar Fair better.” “There have been no discussions of being bought out by Apollo or merging with Cedar Fair. We are just focused on preparing our parks with this upcoming season and our 50th anniversary. We are also planning for the 2011 season as well.”
Q: Does the company have a plan to bring in, renovate or add new flat rides to parks like Great Adventure that are short on such rides? A: “Currently our surveys show that the lack of flat rides hasn’t hindered our growth or attendance, but we will very likely continue to add new flat rides as it fits in with our policy of shaping a varied experience for the family to enjoy. New flat rides may not be advertised heavily, but they need to be introduced beneath the big name attractions.” They will look at doing this in the coming years.
Q: Jack Shapiro (Mark’s son) asked “Why don’t we have Flash Pass for the water park?” A: “This is an operational snafu for us because it is an electronic devise in a water-prone area” and is tough for existing attractions where “we don’t have anywhere to put them.”
Q: Is any change with the bankruptcy emergence going to change anything going on with Kentucky Kingdom? A: Nothing will change. The park is currently sitting dormant. Six Flags has agreed to leave everything as is besides the removal of its inventory while the Kentucky State Fair Board looks at its potential future. Mark Shapiro hopes the park will live on for many years, even though it will be without Six Flags.
Q: Will you introduce any new brands into the Six Flags chain? A: “We are very happy with our current brands like Thomas the Tank Engine which have done very well for us. Tony Hawk has also been terrific for us. Terminator Salvation and Evil Knievel have been hits for us as well. Dark Knight has been huge for us—we never aimed for the attraction to be a high-end thrill ride, but for it to be a family-friendly indoor coaster that worked for everyone. We have conversations with movie studios, television studios and different companies that want us to work with them to launch a new attraction. We won’t launch any new products unless we feel it will work. Warner Brothers wanted us to do a Speed Racer attraction but we didn’t feel it would work, and sure enough, it didn’t. Because of our hesitation to enter with that product, we didn’t end up making something that didn’t have the staying power. Expect us to do things with the upcoming Batman and Superman sequels, as well as some ideas with Green Lantern and the Justice League overall to come in the future. We are moving with DC Comics and Looney Toons, but will expand our brands in the coming years as well.”
Q: Will you expand your offerings for your adult audience with shows, food and attractions aimed at your older crowd? A: “We have so many new offerings for food—we’ve got more choices than ever that are aimed to appeal to all. You can really choose between so many tastes now: Greek food, Johnny Rockets, sushi and even crepes! We’re diversifying our offerings to give more to everyone, but I don’t think everyone will ever be satisfied.” In terms of the shows, “if you don’t like Great Adventure, then you won’t like Six Flags.” “When you talk about entertainment, food and attractions, next to Magic Mountain, Great Adventure is the most varied and most of the other parks are measured up against it since it is a crown jewel in our chain.”
Q: Will the Six Flags Parent Pass (similar to Child Swap) be brought to the other Six Flags parks? A: “I promise you that from now on, we will have the Parent Pass available at every park. I promise you that the first thing tomorrow morning, that pass will be available at every Six Flags park from now own. You are absolutely right and I will make sure that your feedback will be implemented immediately!”
Q: When will Thomas Town open at Six Flags America? A: “It is supposed to be set for a Memorial Day opening, but hasn’t been officially announced thanks to the snow. They have fallen behind thanks to the weather, but I hold them accountable (including my park president) to make it open for that day.”
Q: What are the challenges that Six Flags America has and how will those be addressed in the future? A: The opportunity in that park is directed at the family. The water park is a big part of the experience. “We are looking at putting in a new coaster in Six Flags America aimed at the tween audience in the next few years. We are planning on continued improvement and investment in the park and we are continuing to change the park from what it was when we first came in and have really done a great job so far. Across the board, we’ve done a management overhaul because we believe that this park could be one of our best if we just push it up to our standards and move it away from what it was four years ago. It was the most-improved park this year, and will likely be up for “best park” in the chain later this year.”
Q: How will Six Flags expand in the future? Will you implement a ride swap program like the one you used to have? A: “We don’t have a formal “ride swap” program contrary to popular belief. If it works to move things, then we will do that, but there is no set procedure we follow to do so. “
Q: Will Six Flags TV expand in the parks? A: “It has been very popular in our signature attractions and will be expanded (including the jumbotron system) in the coming years thanks to the positive feedback we’ve received. We want to keep people entertained while they wait in line. We will continue to invest in the queuing experience.”
Q: Why did they switch the lap bars on Bizarro? A: “We received all new trains on Bizarro, and since then, people have said that they’ve experience more G’s on the new ride than they have before.” Safety procedures take priority before anything else.
Q: Why are the parking prices at the individual parks so varied and so high? A: “Actually, most of our parking prices are the same, though we do have varied prices for differing options. We are continuing to invest in the parking lots as we do with the parks themselves; using much of the money we make charging for parking. We aren’t that much different (certainly cheaper) from basketball and baseball games with their parking pricing structures.”
Q: With all of the hassles of prototype models like X and the S&S Sky Swat, how do you feel about using prototype products in the future? A: “If we don’t think out of the box, we aren’t doing things right. We’ve always slotted some money aside for innovation—prototypes have always been a part of our culture and will continue to be in the future.”
Q: Can you reveal anything about a prototype with B&M that you are working on? A: “At this time, we have nothing prototypical going on with B&M. We are very much about delivering prototypes and unique products—testing the spectrum and delivering something fresh.”
Q: Are there any plans to fix the effects that are off on Congo Rapids? A: “I wasn’t aware of those issues but will definitely work with my team to determine what effects can be turned on or added to make that experience the one you and I remember it to be. I’m making a note of that now!”
Mark Shapiro then closes by saying that the company is in a great place with the bankruptcy now behind them. The term “bankruptcy” will no longer be associated with their company.
Six Flags will be launching a new iPhone app that will feature all parks in the chain, an in-park GPS system and a “friend finder feature” that will allow users to see each other when they are in the parks. The app will launch in April.
Mark Shapiro delivers a final “thank you” to the listeners for keeping involved with Six Flags. He asks that guests please continue to send in their comments and criticisms, as they use them and will continue to do so as they move forward. It is at this point that the call ends.
It was a great pleasure to have been included in this and I hope they do more in the future. It was a unique experience and I would do it again, even though I was pretty nervous about it.
I was surprised when he announced SFMM getting Mr. Six's Splash Island to. I'm happy they turned down the Speed Racer idea.
He misunderstood my question about Bizarro's lap bars. If anyone in the call could tell, I was really nervous, that Is probably why he misunderstood me. What I meant in it was when the new trains first arrived, it had the same restraints as El Toro. There are pictures to prove it. Then a few days later more pictures come out with the trains without lap bars. Then when it opened, it had the big, bulky, current ones. There is a huge difference between them. I wish I could have been clearer when asking my question.
I'm glad things are looking good for the company as they are coming out of bankruptcy!
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