What can be done to put SFI in the Black?

[ihauntu2]

I saw this kind of discussion start to take shape in the topic about Dan Snyder. I thought it might be worth its own topic.

The question at hand is what do you think SFI should do as a whole in order to bring the company out of debt and in to profit.

Please try to make as educated an opinion as possible, and try to keep the flame wars to a minimum.

I think SFI should get out of the mentality of building major attractions at parks that already have increasing or large attendance. SFGAM & SFGADV could easily stand a year or two without major improvement and not take a substantial loss in attendance or profit. They have great ride selection and a strong regional folowing already. SFMM sounds like it needs more money for maintaining its current machines instead of adding any more roller coasters.

Instead of throwing the major money at these parks, how about making meaningful / major additions at the mid-level parks. Parks that could be very packed and profitable, if SFI hadn't decided to leave them rot.

When they added Batman to SFSTL, the que line was always completely full, often to the point of them having to wrap a line around the entrance plaza/ circle in front of the gotham gates. The first year your average wait was almost 2.5-3hrs. After that it became a 1.5 - 2hr wait for the next couple years. This single addition to the park caused enough jump in revenue / attendance to cause the additions of Mr. Freeze / Hurricane Harbor.

If you build a major attraction, your attendance will rise. Instead of applying that adage to parks that are already profitable, SFI could raise the attendance of multiple mid-level parks which may actually end up more of a per capita gain in customer spending company wide. Instead we see the mid-level parks getting mediocre additions such as a "Tornado", which if SFSTL is any indication, those will be lucky to have raised attendance by 1-2% at best.

The other part would be to sell off those parks that do not make enough profit or that are worth more as real estate developments. SFEG comes to mind as a candidate for this. Sell them to developers or local groups interested in running them as amusement parks. Use the added cash flow to pay off any debt incurred by those parks and possibly fund additions to those mid-level parks left in the chain.

Anyway these are just a few ideas. What do you guys think? Got any other ideas for the chain?

[EagleFan344]

Yea I agree with you. They should add some big attractions to parks like Darien Lake, Kentucky Kingdom, Fiesta Texas etc. Parks that dont have 8 coasters or more like GAM, GADV, OG etc.

[greatamerica2003]

DOWNSIZE.

Unfortuantley, in this day and age its is too hard to keep a company with so much infrastructure going. Look at all of these underpreforming properties like SFEG, SFDL, as well as others. I am not saying that the only way is to bulldoze and sell real estate, but to look again the the explosive growth that the company experienced on its buying spree. Bad idea.

Also, don't be afraid to sell to another company or merge. Look at all of the other theme park operators. There are 2 main scenarios:

1. Owned and operated by a larger conglomerate. All of the big players are portions of a larger company like General Electric (which owns NBC/Universal) Disney, Busch and Viacom (Paramount)

2. Companies like Cedar Fair, which are big players but don't own a multitude of properties.

They need to find a new source of revenue. Under Time-Warner ownership, there was always cash around because of the overlaying company structure. And Time Warner owned 8 parks, not 40-some properties that can't all support themselves.

And thats another point all together. The parks that make money get bilked out of the money they made becuase the properties that make NONE get cash infusions to keep them going. It's a broken system that CAN be fixed, but sacrifices need to be made.

Last but not least is Family Orientation. Parks make hardly any money off of season pass holders, so they need to stop catering to them. Families spend the money. A park can make more cash off of a two-day visit than they can off of a season-pass holder all year. Why? Season pass-holders don't spend money in the park on food, merchandise, etc.

Six Flags has started to work on the Family Orientation aspect, but it will take time.

[rct2wizard360]

Okay lets look at it this way, how much money do the smaller parks bring in for SF. They obviously don't make enough profits to get them anything new. Let alone maybe even pay for anything. We really need to stick to the main parks here:

Six Flags Great America
Six Flags Over Georgia
Six Flags Magic Mountain
Six Flags Over Texas


^Those are all of the top parks that Six Flags owns. Every other park really hasn't brought in much, and SF seems to favor these parks. I think the other parks should be sold off. I know that these parks could easily be sold. They just have to do it. May not appeal to everyone. But, I'd sure enjoy it.

[mschulz5]

I agree with you wizard, but you forgot one major park: Six Flags Great Adventure. Just thought I would point that out. Also, I believe that St. Louis is a good park and they should keep it as well.

[greatamerica2003]

We really need to stick to the main parks here:

Six Flags Great America
Six Flags Over Georgia
Six Flags Magic Mountain
Six Flags Over Texas

WE? Are you running the company?

Tack on Great Adventure, St. Louis, Astroworld and Fiesta Texas and then you have a nice, rounded out company with parks that are good performers. Funny on how those are the original seven plus one (Fiesta, and thats a very nice park) I would hate to lose a park like St. Louis, given that its an original from the very beginnings of the company. Lots of history there.

[rct2wizard360]

How the heck did I forgot GADV? Sorry guys.

[EagleFan344]

What about SFNE?

[Danhockey04]

Let's just say this, they probably wont, it would be a miracle for SF to get back into the black.

[greatamerica2003]

Let's just say this, they probably wont, it would be a miracle for SF to get back into the black.

In the 1980's Nobody said that Chrysler could come back from the red ink, and it did.

It's not over until the fat lady sings.

[ihauntu2]

Okay lets look at it this way, how much money do the smaller parks bring in for SF. They obviously don't make enough profits to get them anything new.

Some of these parks aren't as profitable because SFI hasn't spent any kind of real money on them to attract new customers.

No decent new attractions = No decent increase in admissions = No increase in profitability

Tack on Great Adventure, St. Louis, Astroworld and Fiesta Texas and then you have a nice, rounded out company with parks that are good performers. Funny on how those are the original seven plus one (Fiesta, and thats a very nice park) I would hate to lose a park like St. Louis, given that its an original from the very beginnings of the company. Lots of history there.

These are the kind of mid-level parks I'm talking about. If SFI were to actually spend some money in these areas, they might actually see a higher rate of return.

When you keep adding to the same park over and over again people around it come to expect a new addition every year. Then it no longer becomes a large attendance boost, but more of an expectation just to remain at current levels.

DOWNSIZE.

Unfortuantley, in this day and age its is too hard to keep a company with so much infrastructure going. Look at all of these underpreforming properties like SFEG, SFDL, as well as others. I am not saying that the only way is to bulldoze and sell real estate, but to look again the the explosive growth that the company experienced on its buying spree. Bad idea.

I've got agree with you. These type of properties do tend to bring the whole chain down.

[CoasterDude12-2]

I think a good way to at least help with the debt is to invest in Waterparks. They've already done that by adding a waterpark next to almost every park, but maybe just single waterparks will help more.

[kbfrm]

I have some ideas for this.
Like others have stated, I believe that they should slow down investing on the major parks, just improve them. Instead they should start investing in the parks that have an oportunity for making a large profit, look what Superman did for SFM, attendance sky rocketed there. If they sent some quality major attractions to parks like SF: Astroworld, Darien Lake, Elitch Gardens it could turn those parks into money makers.

They also need to clean up a few of their parks so they are not so dirty and run down like SFMM, SFKK, SFAstroworld. People don't like being in dirty and rundown parks, they just need to keep the park appearances good. Good rides won't hide the problems that plague some of their parks.

Another thing please budget the parks correctly, SFMM is drowning in problems, please help us. When rides have been down for 4 years, that is serious (cough Metro, Sky Tower). The park can't even afford to staff all the rides already there, why give us another, it just means another ride closes up. The park makes enough money to where these sort of things should be justified. Im sure there are other parks that could use a larger budget too that have similar problems.

Also, raise prices at the appropriate parks. Don't give out such dirt cheap discounts for the parks. Also they should stop handing out so many free admission tickets. Raise prices throughout the chain for season passes too, they shouldn't be payed off in only 1 or 2 visits, atleast 3 or 4 visits in my opinion.

And lastly, the parks need to become much more family friendly, SF parks as a whole have alienated a lot of families with all the thrill rides. Families spend the most money, thats where the money is at, not kids that go to the park weekly with season passes that don't buy much(or anything at all). Look at how popular Disney parks are, they are so popular because of the experience they offer, amazing themeing, and the family friendly rides and enviroment.

[sixflagsguy5]

SFGADV needs some money to get all of their rides running. When I was there, they were completely understaffed. They have so many flats, but most of them were closed. They have a great kiddie section near Skull Mountain, and they also just added the kiddie area in Golden Kingdom.

SFOG seemed pretty good when I was there. I don't really know though, because all of the negative things about the park were probably because it was the beginning of the season. I think they could use a new coaster to last them for the next few years. They have two waterparks, so I think that will help too.

I think that SFGAM is in good condition. All that I think SFGAM needs is more flats. I also think another kiddie coaster would be good too, but not a really boring one. More of a family/ medium sized coaster.

I haven't been to SFMM, but from what I have heard they need to get all of their coasters running, and also need park improvements and flats.

SFSTL seemed like a very nice park. I think they could expand a little, but besides that I think they are in good shape.

I haven't been to SFOT, SFFT, or Astroworld, but from what I've heard, Astroworld is a really run down park. I've heard mixed reviews, so it's hard to tell. I think maybe the waterpark part is good, but the rides aren't the best. SFOT and SFFT both seem nice too, but I don't have my own opinion, because I haven't been to either of them.

I have been to SFDL and it sucked. They had 1 train op on everything, and their rides weren't very good. An arrow mega looper, a vekoma SLC, SROS, Predetor, and a 1st generation boomerang.

[Raging_Bull]

SFOG should be in great shape next year with the addition of the B&M hyper they're getting.

[SF Critic]

Highlights....

"After a few years of belt- tightening, theme and amusement park owners have spent big bucks improving their attractions following their strongest attendance period last year since the 2001 terrorist attacks slowed the $10.8 billion industry's momentum."

Seems like after 9/11, many people were scared to venture out in the world like they use to (not to even mention traveling).

"Parks nationwide have spent an estimated $750 million on new rides and upgrades for this year, a vast improvement over the $500 million spent last year, said Dennis Spiegel, president of International Theme Park Services Inc., a consulting group based in Cincinnati. "

Looks like the GP just recently got hungry for some thrills again! Hooray!!!!

"Alone, Six Flags Inc., the world's largest regional theme park company with 30 parks in North America, has spent $135 million on new attractions, nearly twice what it spent last year, in an effort to reverse an attendance slide from the previous year."

Read for more info: http://news.tbo.com/news/MGB9Z5LRQ8E.html

Six Flags also flagged three parks this year.

SplashTown water park in Spring, Texas becomes Six Flags SplashTown.

Waterworld USA water parks in Concord and Sacramento, California become Six Flags Waterworld – Concord and Six Flags Waterworld – Sacramento.

After 9/11, Six Flags went into slump. They tried to attract people back to their parks Look at Six Flags attendance over the years

Attendance at all parks is 46.576 million for 2001.
Attendance at all parks is 42.495 million for 2002 (8.8% decrease).
Attendance at all parks is 41.728 million for 2003 (1.8% decrease).

If 9/11 never happened, Six Flags will probably still be gaining significant growth since 1999, still acquiring SFWOA and the Euro parks. Must I say more.

Now that 2005 seems to be very good for themeparks, who knows what SF has planned next in the coming years, but its looking good.

"SF: New attractions for 2006; Hotel for The Great Escape." SFGAdv getting at Hotel and soon a destination park." Get OUT of HERE!!!!

Hope this helps....

[Ilovthevu']

I'm with ihauntu2 on this one. I think that too many attractions go to the big parks. When they do buy attractions for these other non-main parks, they tend to be nothing worthwhile and are CHEAP. I sometimes wonder if SFStL is a main park.

I can't understand why they keep on buying parks like anything. It might be okay to buy waterparks, but for a regular park, they need to make sure the rides they are buying aren't horrible, and make sure that they can make it better.

I've never been to a SFNO, but I will comment on the rollercoaster companies there. SF has taken rides out of there, and has cut the hours. Something is wrong.
BTR-It's a good ride. (1 good ride)
Jester-It's Vekoma. Probably bad. (D Vu', the one hit wonder)
Mega Zeph-It's Wood. If its like the Boss, it might kill me.
Muskrat Scrambler-Wild Mouse (Mouse's are okay.)
Road Runner Express-Kiddie Vekoma
Zydeco Scream-It's a Vekoma Boomerang. I like boomerangs, but they might be rough for some people.

It needs more rollercoaster, if not replacing some with better ones. Of course, SF is going to take away hours with this coaster line-up. And SF argument (like some of yours) is that they don't make enough money to get anything. I'm sorry, but flats don't pull people in to pay $40 some dollars.

[w00dland]

I can't understand why they keep on buying parks like anything. It might be okay to buy waterparks, but for a regular park, they need to make sure the rides they are buying aren't horrible, and make sure that they can make it better.

They havn't purchased a park since their buying sprees of the late 90's and 2000. Ever since 2001 they have spent less money and sold parks.

And rollercoasters aren't the answer to some parks worries. My favorite park of all time is Islands of Adventure, they have 5 roller coasters (if you count DD as two coasters) 2 of them is a kiddie coasters as well. They have amazing theming and great other rides. The atmosphere of each section is different than the others.

[Ilovthevu']

They are willing spend a lot of money on theming over there. I don't think the rides are that terrible over there, but you know each one costs a big chunk.

I thought that the ride/show where the water goes above you was completely stupid. It probably costs a lot of money unlike a Zamperla Balloons, or a Huss (found unused at Huss's lot) Top Spin. The bottom line is that put a fortune into those parks whether it be a rollercoaster (DD) or Jurassic Park.

[CoasterDude12-2]

And rollercoasters aren't the answer to some parks worries. My favorite park of all time is Islands of Adventure, they have 5 roller coasters (if you count DD as two coasters) 2 of them is a kiddie coasters as well. They have amazing theming and great other rides. The atmosphere of each section is different than the others.


The reason IOA coasters are top ranked (The intense ones, anyway) is because the theming is so expensive and they take time to keep it that way. SF would buy the exact same thing and build it over a parking lot and name it Scream, Medusa, Mind Bender, Boomerang, Superman, Batman, Joker, Poltergeist, etc. and theme it not. Sf doesn't really care about theming, they theme few of their rides and it is rarely extensive.

[FParker185]

word is SF is quitely up for sale, and all of SF upper managerment have filed papers with the SEC (damn almost typed SEX, thought it was amusing though, it's late), saying that if/when the company is taken over or sold, if they are let go they get a really huge severance pay, which is usually the first sign of an impending takeover or sale of a company. Alittle food for thought, especially considering how much $$$ SF is investing in the parks this year, could really up the sale value of the chain.

[ihauntu2]

http://yahoo.brand.edgar-online.com/fet ... &Type=HTML

For those of you that don't speak legalese.

Persons affected : James M. Coughlin - General Counsel, Hue Eichelberger & Thomas J. Iven - Executive Vice Presidents, also unnamed employees (possibly due to confidentialty agreements) - more than likely upper management given the wording of the agreement exhibit 10.1

Outcome: Each person affected has been awarded a new severence pay package as of 7/21/05 that includes one year salary and one year benefits. The package only goes into effect if

1. The company changes hands by complete takeover or one current shareholder gaining 30% of voting power.
AND
2. The company terminates employment without cause within 3 months prior to the change in ownership or 18months after that change. The employee may also choose to quit with good cause within that time period and still receive the severence package.

My thoughts - This appears to be a reward package to encourage individuals to remain with the company. It does not appear to be a golden parachute for higher ups. It was filed by the company on behalf of what appears to be a form letter notifying employees of the new plan. It was not filed by the managers themselves.

There must be some sort of rumor going through the company about potential takeover or imminent threat that is causing lower morale and causing good employees to jump ship to other companies on the executive level.

I don't think it will be a complete sale since the agreement is not a golden parachute. It doesn't give any kind of huge bonus to the highest executives which is usually a good sign of a takeover.

Instead I think it has more to do with the actions of someone like Dan Snyder or Bill Gates, as they could attempt to get a large number of shareholders to turn over their proxies to them resulting in one person possesing over 30% of voting power.

If I am wrong and SFI is really looking for a sale, then let me be first to say that it is crap that upper management has been running the company in the interest of making a sale, and not in the best interest of the company as a whole. That would explain why they have only been pumping up a few properties and letting the others stagnate or rot. That way they have the BS sale angle of "Look what these properties can do (SFGAM, SFGADV), and with them you get all these other properties with the same potential (any number of stagnate or rotting parks)."