Six Flags - Cedar Fair merger?

[Iggy ACE]

http://online.wsj.com/article/BT-CO-201 ... esAmericas

WILMINGTON, Del. (Dow Jones)--Creditors of Six Flags Inc. (SIXFQ) have found signs that life after bankruptcy for the troubled amusement park operation could include a combination with rival Cedar Fair LP (FUN).

Avenue Capital Management, the investment fund leading a drive to take over Six Flags in Chapter 11, sent representatives to Cedar Fair last fall, said Andrew Dash, attorney for the official committee representing Six Flags' committee of unsecured creditors. He's with Brown Rudnick.

"Did anyone ever tell you why representatives of Avenue traveled to Sandusky, Ohio, to meet with representatives of Cedar Fair?" Dash asked Six Flags Chief Financial Officer Jeffrey Speed.

On the stand in the second day of a court contest over Six Flags' Chapter 11 exit plan, Speed replied in the negative, and said he only learned of Avenue's visit to Cedar Fair during pretrial preparations for the confirmation contest.

Six Flags' finance chief said he could "only speculate" that Avenue was trying to learn more about the amusement park business now that it was committed to leading a $450 million equity raise to bail out Six Flags.

Creditors of Six Flags speculate differently. They suspect investors led by Avenue plan to merge Six Flags with Cedar Fair once they gain control of the company in bankruptcy. Besides Avenue's pilgrimage to Sandusky, Ohio, they point to an email that indicated Six Flags' backers were eyeing Apollo Management LP as a potential source of investment.

Apollo is trying to buy Cedar Fair in a deal announced in December 2009 at a value of $2.4 billion, including the refinancing of outstanding debt.

Deal speculation is a big step up for Six Flags, a company that tumbled into bankruptcy in June 2009, having resigned itself to being seized by secured lenders. Instead, it's the target of a Chapter 11 tug of war, with two groups of existing creditors ready to put up more money to get it out of bankruptcy. The prospect of a fast after-bankruptcy deal for Six Flags could be spurring bondholders to reach for their checkbooks to put more money into a company that was ready to wipe them out less than a year ago.

Creditors are urging U.S. Bankruptcy Court Judge Christopher Sontchi to reject the Avenue-backed Chapter 11 plan for Six Flags in favor of an alternative Chapter 11 exit proposal financed by bondholders led by Stark Investments.

Cedar Fair, through a spokesman, declined comment on a possible Six Flags connection. The Ohio amusement park operation is urging its existing owners to accept the Apollo buyout offer, which is scheduled for a March 16 vote. Apollo's offer has aroused opposition from Q Investments, a major Cedar Fair unit holder.

Avenue Capital didn't respond to a request to comment on whether its post-Chapter 11 plan for Six Flags includes a quick deal with Cedar Fair, with Apollo, or with both.

(Dow Jones Daily Bankruptcy Review covers news about distressed companies and those under bankruptcy protection.)

-By Peg Brickley, Dow Jones Daily Bankruptcy Review; 302-521-2266; peg.brickley@dowjones.com

[coasterkid94]

I'm fine with the merger, but if anything happens, they better keep the Six Flags name.

[Goku1910]

The link to the full article is dead. Gives me an error page.

[Cole]

I'm fine with the merger, but if anything happens, they better keep the Six Flags name.

I wouldn't mind our park being called just "Great America"
But I really hope this could go through. Two of the worlds top amusment companys toegether would lead to a crazy stacked line-up of parks.

Knotts
CAGAM
WOF
CP
Dorney
Kings Dominion
Canada's Wonderland
Kings Island

SFMM
SFGAM
SFGA
SFOG

This would be great for trips.

[DejaVu2001]

Personally, I think this is the stupidest thing I have ever heard. Lets take a company that is emerging from bankruptcy and merge it with another company that also has serious financial issues. What could possibly go wrong?

Then there is the issue of naming. Is SF dropped from all names, or is SF added to all names. Do we become Illinois' Great America or does CP become Six Flags Cedar Point? Then comes the issue of ride names. Would CF keep licenses this time? Knowing CF, probably not, so we could look forward to Bat-Hawk and The Dark Box and Flying Coaster. And we could also get 3 "new" kids areas - Planet Snoopy, Camp Snoopy, and Peanuts National Park.

Then there is the issue of policies, imagine CF and SF combining their most annoying policies. Imagine all of the coasters dropping to 1 train if it started to drizzle. Imagine Demon getting crotch-belts, every flat that doesnt already have seatbelts getting seatbelts, and operators with wireless microphones walking around having to say "check" everytime they check a restraint.

[Goku1910]

Personally, I think this is the stupidest thing I have ever heard. Lets take a company that is emerging from bankruptcy and merge it with another company that also has serious financial issues. What could possibly go wrong?

Then there is the issue of naming. Is SF dropped from all names, or is SF added to all names. Do we become Illinois' Great America or does CP become Six Flags Cedar Point? Then comes the issue of ride names. Would CF keep licenses this time? Knowing CF, probably not, so we could look forward to Bat-Hawk and The Dark Box and Flying Coaster. And we could also get 3 "new" kids areas - Planet Snoopy, Camp Snoopy, and Peanuts National Park.

Then there is the issue of policies, imagine CF and SF combining their most annoying policies. Imagine all of the coasters dropping to 1 train if it started to drizzle. Imagine Demon getting crotch-belts, every flat that doesnt already have seatbelts getting seatbelts, and operators with wireless microphones walking around having to say "check" everytime they check a restraint.

Best Rant Ever!

[sfgam1]

Illinois Great America. huh. Not too bad.

[david]

The deal would be good, if and only if:

- All names of the parks remain as they are today.
- MARK SHAPIRO HAS NOTHING TO DO WITH THIS MERGER.

Ok.

[Goku1910]

Mark Shapiro is CEO, so it's obviously going to involve him. I don't know why you hate him so much, the parks have been improving since he took over.

[Freakdaddy]

Mark Shapiro is CEO, so it's obviously going to involve him. I don't know why you hate him so much, the parks have been improving since he took over.

This is so correct. He has actually improved the parks in the worst economy in my lifetime (I'm 41). Not an easy task at all. I like the family vibe and the parks are much cleaner.

[david]

It's possible that I'm not seeing it that way because, I'm a rotten teenager that ruins the park!

[monsterfan99]

Mark Shapiro > Dick Kinzel

If you ask why, at least Shapiro did not buy parks they couldn't afford. He at least learned from the mistakes of others, unlike Kinzel, whom is going the Premier route for the Cedar Fair chain.

[w00dland]

The last two regional theme park companies that got too big ended up being bought out, or bought out then becoming bankrupt. Point is: It's tough to operate big time theme parks that are only bringing in people for a day or two compared to a resort destination.

In my very humble opinion, I think if Cedar Fair and Six Flags were to merge, it wouldn't work that well. Not because of what other people are saying (rides, management, etc) but because you are merging two companies together when neither of them can make any money. I'm not going to say that it definitely won't work because there is always room for change, but I think both companies need to have serious business changes before either will make big money.

Those big changes are the norms of the REGIONAL theme park giants today. A focus on thrills, and installing big coasters every couple of years. The parks grow so big that they don't become profitable anymore. Disney and Universal know how to do it, a couple of thrill rides, lots of shows and fun family attractions that are actually fun for the whole family.

Family owned and smaller parks know this, and that's why they've been around forever...Just my two cents.

[Jcoaster95]

^Like how Holiday World has 3 of the best wooden coasters in the world. They have free drinks, free parking, free sunscreen, and cheap food.

They get a new ride every year. They are more than obviously doing something right.

The thing is, the list of rides they get each year is diverse. Not just coaster, coaster, coaster; or kiddie ride, kiddie ride, kiddie ride.

[sfgamguy]

this could be very good, and very bad. Sounds good to me though

[tillenterprises]

Mark Shapiro is CEO, so it's obviously going to involve him. I don't know why you hate him so much, the parks have been improving since he took over.

This is so correct. He has actually improved the parks in the worst economy in my lifetime (I'm 41). Not an easy task at all. I like the family vibe and the parks are much cleaner.

Glad to see I'm not the only 41 year old here! Anyway, I agree for the most part and think Shapiro is doing a pretty good job. I like the fact that the season passes are so affordable, and you can visit other Six Flags parks with it, which really helps a family on a budget, not to mention the soda and food deals which really help! Personally, the only thing I'm not happy with him is tearing down and scrapping all the first generation freefalls in the parks, as well as Z-force/Flashback, but that's my own personal beef!

[onyxhotel08]

Great article from screamscape

In a strange news story I find hard to believe, it seems that some of Six Flags creditors believe that Apollo Global Management may swoop in to make an attempt to acquire Six Flags shortly after they finalize the deal to buy Cedar Fair, thus creating the theme park mega-merger deal of the century. While many theme park chains have been exchanging hands and merging of late, it just seems crazy that the former Paramount Parks, Premier Parks, Cedar Fair parks and Six Flags parks could possibly ever operate under one banner. The marketing overlap alone from a deal of this magnatude makes my head hurt as several major competitors could soon be allies.

My biggest fear from a deal like this is in one fell swoop, we could see the monopolization of America’s regional theme park industry. Without competition to drive up innovation and propel the sale of new rides and attractions, the industry in this country will quickly become stagnant, wither and die. While it may not be a perfect example, lets take the events that transpired at Ohio’s Geauga Lake to heart as a possible micro-sized version of what could happen across the country.

For years, Geauga Lake and SeaWorld Ohio survived and even thrived as competitors running two very different theme parks on opposite sides of the same lake. When SeaWorld was sold to Six Flags, the properties were merged together into one giant mega-park experience and renamed Six Flags Worlds of Adventure. Instead of finding financial success… or even staying even with previous attendance levels at the two parks, they quickly found attendance levels at the megapark to be dwindling. Instead of spending a day at each park, many people simply came for one day to visit both at same time. Suffering, the park property was soon sold to their Cedar Fair, their nearest competitor who shared the same market with Cedar Point. They promptly removed the Six Flags branding and renamed the property back to Geauga Lake.

It’s no secret that once Geauga Lake and Cedar Point were owned by the same company, Geauga Lake essentially got the proverbial shaft when it came time to handing out budgets for new attractions. Cedar Point was Cedar Fair’s flagship park and there was no way they were going to get Geauga Lake steal their thunder. When the opportunity to buy the Paramount Park chain arose, Cedar Fair jumped right at it, taking over the other big competitor in the state… Kings Island. With three massive parks all sharing the Ohio market under one owner Geauga Lake always drew the short straw. Attendance and profits continued to fall, because of a lack of major new capital attractions, and before anyone knew what was going on Geauga Lake was shut down for good.
Now think about the parks that share the same basic market where this could happen all over again? Six Flags Great Adventure shares the same basic marketplace as Dorney Park and Six Flags America with Kings Dominion a bit to the South. In California Knott’s Berry Farm and SF Magic Mountain are close and to the north California’s Great America and SF Discovery Kingdom are also competitors. Six Flags St. Louis isn’t too far from Worlds of Fun, and Carowinds is about 4 hours from Six Flags over Georgia.
In short, this is the bad idea of all bad ideas… so lets hope this is just some crazy pipe dream and nothing more.

[RBull4life]

Glad to see I'm not the only 41 year old here! Anyway, I agree for the most part and think Shapiro is doing a pretty good job. I like the fact that the season passes are so affordable, and you can visit other Six Flags parks with it, which really helps a family on a budget, not to mention the soda and food deals which really help! Personally, the only thing I'm not happy with him is tearing down and scrapping all the first generation freefalls in the parks, as well as Z-force/Flashback, but that's my own personal beef!

It looks like there are three of us at 41. I agree with you on the Season pass. Two years ago, my family couldn't afford to go to Cedar Point for our vacation like we usually do every summer because of money being tight. Instead, we took a drive down to St. Louis and went to Six Flags. Didn't regret it one bit. In fact, we found it to be somewhat of a more enjoyable time than we had at Cedar Point the previous years.

It's possible that I'm not seeing it that way because, I'm a rotten teenager that ruins the park!

Yes.

[david]

^ haha. very funny.

[batcave]

Cedar Fair would be getting the better end of the deal on this...Six Flags is a more diverse company with a Production Company, and Hair Cutting Salon (Still don't get that one). Six Flags also has many more partners then Cedar Fair...aka Johnny Rockets, Papa Johns, and Cold Stone. Cedar Fair just has parks.

I say good job Shapiro. David, you are lucky I do not live in that area anymore, nor work at the park because you would be in for the best staple ever!

[Cole]

I dont know which side to take.
It sounds like this move could either be a homerun, or a strike-out.

[lord soth]

I just think it would be a plus to go to Cedar Point for free with my season pass. Although I forsee the price of the SP going up.

[BP317]

Im all for this, all the new attractions can take the signature trademarks from both companies. Storage lockers in front of the entrance, massive concrete queue jungles, triple the amount of garbage cans, TV's in the line advertising flash passes and video games, and combine the uniforms so the employees wear bright yellow shirts with blue shorts.

[monsterfan99]

combine the uniforms so the employees wear bright yellow shirts with blue shorts.

You sold me the idea with this

[Coastermonkey61]

I would think this would be more of a Miller-Coors merger. Both companies combined because they were losing substantially to Anheuser-Busch, but the companies themselves have remained relatively independent. The merger was more about the finances, not the products.