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Leland Wykoff

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About Leland Wykoff

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  1. SeaWorld Orlando and regional parks from the Six Flags and Cedar Fair chains seen as surrendering customers to provide the three million new visitors to Epic: http://www.ocregister.com/universals-new-theme-park-is-an-epic-challenge-for-disney-and-seaworld
  2. Cedar Fair purchase option on Kansas City Schlitterbahn water park property sees activity: https://www.bizjournals.com/kansascity/news/2019/08/01/schlitterbahn-epr-properties-mortgage-repaid.html
  3. News out of Corpus Christi Texas: https://www.kristv.com/news/local-news/free-admission-to-schiltterbahn-on-select-days
  4. Thank you BoddaH1994 and CoastersRZ for your followup comments. Here are additional observations and information to consider. A Platinum Season Pass to the Texas Schlitterbahn water parks is listed at $275.00. A Platinum Season Pass to all Cedar Fair parks is listed at $222.00. Thus we can see Schlitterbahn has excessive season pass pricing power of $53.00 annually over Cedar Fair's legacy park system. This is quite a wide gap when one considers the CF system is composed of almost three times the number of parks as Schlitterbahn. The absence of Schlitterbahn parks from the CF website--and vice versa--suggests season passes are not being cross honored at legacy parks this year. Which would make sense. But what of next year? Pricing must change or Schlitterbahn pass holders could save a bundle of money by purchasing a cheaper CF Platinum Pass rather than a Schlitterbahn pass. This, of course, assumes the Schlitterbahn Parks join the unified CF Platinum Pass benefits next year. Thus revenue is at risk. Will Schlitterbahn pass costs be reduced to bring it line with the legacy parks pass? Or will CF pass prices take the substantial jump of over $53.00? Will such a steep price price jump be accepted by the legacy CF pass holders? Given the distance of the Schlitterbahn parks from other CF properties does it even make sense to include them in the legacy Platinum Pass product? And are they even the same type of product? Schlitterbahn is a water park. CF legacy properties are amusement parks with water parks attached (only a few of which are operated as seperate gates). If Cedar Fair believes it can entice a significant number of Schlitterbahn guests to travel the thousand or so miles to legacy CF parks season pass revenues could see positive impacts. Likewise if CF believes legacy giests will travel to Texas for a water park experience they could maintain the premium pricing power of Schlitterbahn's superior Platinum Pass. However, this seems like a stretch to me. Why pay hundreds of dollars more across a family purchase of CF season passes simply because it includes Texas waterparks you are unlikely to visit? The report by CF of revenues thru the holiday period likely include a weeks operation of the two acquired Schlitterbahn parks rather than just two to three days. This uptick in attendance is masking falling attendance at legacy parks. The gain is offsetting a loss. Recall CF exited the stand alone water park business some years ago when it sold off properties not attached or adjacent to amusement parks. Specific business reasons were clearly outlined by CEO Matt Ouimett for eliminating non-core operations. Cedar Fair's dive back into stand alone water parks is puzzling from this perspective. It suggests FUN sees limited growth opportunities elsewhere. CF has suffered a decade long acquisions drought. Let us hope the Schlitterbahn purchase is not a wet move.
  5. The Washington Post has an article exploring the downsides of amusement parks. It is an interesting read. It makes one wonder how the industry could change to improve and manage the guest experiences better: https://www.washingtonpost.com/lifestyle/amusement-parks-are-an-expensive-way-to-stand-in-line-while-roasting-in-the-sun/2019/07/22/ad309e06-a966-11e9-a3a6-ab670962db05_story.html
  6. The reported "flat attendance" must be questioned. Since Cedar Fair added a weeks worth of attendance over the Fourth of July holiday weekend at the two new Schlitterbahn Water Parks and Resort in Texas, attendance should have shown a jump. Rather flat is reported. Unless Cedar Fair was including the previous years attendance figures from Schlitterbahns in the year over year comparison (FUN made no indication in the press release they had adjusted the comparison to reflect past attendance at the newly acquired parks) attendance across the legacy parks has actually fallen. This raises the troubling prospect Cedar Fair is not effectively converting marketable capital investments in rides, attractions, place making, cuisine, and guest services into significantly sufficient increased revenues, earnings, or attendance. The increase in Out-Of-Park, and On-Park, revenues is certainly seems to be a bright spot. However, we need an better understanding of where the increases are coming from and how the accounting is working. Schlitterbahn includes a resort hotel. If those hotel revenues are lumped into the OOP and OP revenues then it is possible this additional revenue is masking poor performance at other Cedar Fair accommodations. Likewise, locker, cabana rents, food and beverage, towel rentals, etc. at the newly acquired Schlitterbahn parks may be contributing significant enough revenues to mask deeper problems or sluggish revenue being generated by legacy parks. Cedar Fair may be looking at a period of slower growth in traditional revenues as hotel and resort revenues increase. Those revenues may not necessarily enjoy as high margins as the legacy parks and operations. Additionally Cedar Fair may have some revenue leakage or loss if the Schlitterbahn parks are brought into the season pass system of the legacy parks. Schlitterbahn season passes are currently reported to be more expensive than a Cedar Fair all-park access season pass. Maintaining the premium Schlitterbahn gate and season pass pricing my present difficult challenges. Knowledge as to the cross-over use of legacy Cedar Fair Parks by Schlitterbahn customers would be analysis which could predict the possible revenue leakages or opportunities. We simply do not know. As the summer season moves along time will tell if FUN is experiencing broad based issues with sluggish attendance. The next quarterly conference call should provide more guidance. With careful analyst questions the source of increasing OOP and OP revenues should become more transparent. Expanding seasonal events and attractions has a risk of negative impacts from sever weather issues. The increasing sale of season passes can provide some cushion as revenues are pre-collected whether the guest actually makes a wintertime or springtime visit to the parks. But if actual attendance falls, so does the OP revenues. Historically marketable capital investments in signature rides has resulted in observable, measurable, obvious revenue increases. It is troubling he last few years have exhibited a decoupling of healthy revenues from park investments. Watch for more possible issues with revenue generation at Cedar Fair. Otherwise it may not all be FUN and games.
  7. Cedar Fair recently completed a $500 million bond offering at 5.250% due in 2029. Bond proceeds have thus far been used to purchase the land upon which California's Great America sits for $150 million, the Schlitterbahn Waterparks and Resort acquisition for $261 million, assuming Cedar Fair exercises its option to purchase the Kansas City Schlitterbahn property (currently shuttered and non operating on an approximately 40 acre site) for $6 million, that brings us to a total of $417 million expended. This leaves a balance $83 million available for acquisitions or "other corporate purposes" to be utilized. Given the tax value of Sawmill Creek is reported to be in the $8 million range (actual purchase price will likely exceed tax valuation) Cedar Fair will still have a chunk of change to continue acquiring properties. Or developing aditional hotel/resort products. I fully expect Cedar Fair to excercise the option on the Kansas City Schlitterbahn property. The option purchase price values the land and improvements at approximately $150,000.00 per acre--a bargain for a prime location--and with the opportunity to block competitors. Of course, we may see Cedar Fair utilize some portion of the bond proceeds to fund improvements and/or enhancements to the recent acquisitions. However, I feel it is likely Cedar Fair is still gunning for additional operations to acquire. It sure is FUN to watch. Unit price (share price) has fallen and thus pushed the unit payout (dividend) yield to over 8%. That's lots of FUN.
  8. The cost of the CGA land was a bargain when considering the lease payments were very close to the bond debt payments on the purchase price. Essentially Cedar Fair has converted lease payments to actually acquiring a valuable asset. The sale issue were propelled by a change in California law. No longer are Economic Development entities allowed to own land mortgaged/bonded on the public dime (this is a shortened explination of a more complex issue--but it suffices to assist in understanding the sale and purchase). California agencies had to sell the land. Fortunately FUN stepped up and acquired the property for approximately a million three hundred fourty thousand dollars per acre. Cedar Fair did quite well in this deal. They secure the future of the site along with the future value of improvements they may make. Cedar Fair has also eliminated much political uncertainty involving the site. Cedar Fair funded the purchase price by rolling it into the corporate bonds recently sold which also funded the Texas water park and resort purchases.
  9. Merlin entertainment is combining with the Lego family and Blackstone as the exhibition and entertainment field continue to consolidate. This will likely push further mergers in the theme park industry. https://www.cnbc.com/2019/06/28/lego-familys-kirkbi-and-blackstone-to-buy-madame-tussauds-owner-merlin.html
  10. Here is a good article with an overview of improvements and progress at Dollywood for the new season: https://www.knoxnews.com/story/entertainment/2019/03/15/dolly-parton-talks-dollywood-wildwood-grove-opening-netflix-series-9-to-5-christmas-in-the-square/3080580002/?utm_source=knoxnews-Daily Briefing&utm_medium=email&utm_campaign=daily_briefing&utm_term=list_article_thumb
  11. This is a wise move as it improves three areas of revenue. 1) Yield management of resort and hotel properties are improved as otherwise empty rooms produce lucrative marginal revenues. Given a hotel room is perhaps the most perishable item sold--if a room goes empty tonight that revenue can never be recovered yet the high fixed costs of room inventory were expended nonetheless--almost all of the marginal room revenue enhancements fall to the bottom line. 2) On park revenues have the potential for incremental growth as guests visit Cedar Point and purchase food, beverages, locker spaces, water park admissions, gifts and souvenirs, photos, and possibly additional hotel nights. 3) Admission revenues increase as the guests purchase the Wild Card option with the hospitality stay. Think of it as a limited season pass which shifts visits to the slower shoulder season. Such a strategy also creates space at Cedar Point for potentially higher revenue guests as crowds are thinned via revenue leveling from peak periods.
  12. The Knoxville News Sentinel reports the deal has closed and World Choice Investments, Dolly Parton's dinner show theater vehicle, has now fully acquired the assets of Fee/Headrick Entertainment including Comedy Barn, Hatfield & McCoy Dinner Show, Frizzle Chicken Restaurant, and Smoky Mountain Opry. WCI has also acquired the ticketing business, along with warehouses and other assets, Fee/Headrick used in the normal course of business operations. https://www.knoxnews.com/story/entertainment/2019/02/01/dolly-partons-dinner-show-company-buys-fee-hedrick-entertainment/2743141002/
  13. Cedar Fair may be signaling a new direction in management of ride assets. With a quick turn around parts supplier Cedar Fair will be able to reduce operating costs of repairs, ride life extension, and possibly even ride refreshments and renovations. The reduction in ride downtime can have several benefits including enhanced guest experiences, more effective installed capital productivity, purchasing and pricing leverage over traditional suppliers, and leveling of park staffing costs. Recall some years ago Cedar Fair embarked upon a world wide effort to locate legacy flat rides which were rebuilt, repaired, and renewed by outside vendors and companies, then installed in several parks. Those rides were more in the category of flat rides if memory serves me correctly. This development could lead to Cedar Fair being able to bring this capacity more in-house and in cooperation with a local vendor. Cedar Fair has been oversubscribing the marketable capital expenditures in the last few years. Rather than the 10 percent of revenue goal, Cedar Fair has been clocking in about 40-50 percent higher at the 14+ percentage of revenue cap ex reinvestment. At some point those costs must be brought into alignment with market guidance. This may be an effort to reduce the costs associated with attraction operation and a trimming of capital expenditures down to the expected and projected ten percent range. Cedar Fair, under the modern management era, has learned many valuable lessons. When Cedar Point removed two legacy rides to make way for the iconic, energizing, and defining GateKeeper roller coaster, the reduction in maintenance costs associated with the discontinued rides produced adequate enough savings to pay for the installation and operations of GateKeeper. Thus GateKeeper actually reduced operating costs. Thinking along these lines I rather suspect management expects significant gains going forward. The article reports Bitec/Simple Machining Inc plans to invest approximately $5 million in the next four years in the venture. That suggests a large volume of parts are expected to be ordered and manufactured in the near future. Assuming a very conservative ratio of $5.00 in orders for each dollar invested in plant and equipment that places a revenue value of $20 million in parts. This strategy also allows Cedar Fair to hedge against disruptions to the parts supply chain by circumstances such as embargoes, punishing trade tariffs, or demands by competitors which might temporarily restrict availability of parts from overseas. Given the lack of progress in trade agreements with Asian countries such a move seems very wise.
  14. A documentary was produced in 2002 concerning Paramount Pictures, The Kid Stays in the Picture, and the near death sentence it received under ownership by the Gulf+Western conglomerate. It is quite the view and is instructive of many of the forces which continue to shape and influence Entertainment Companies (even CedarFair). Following is a link to the IMBD entry for The Kid Stays in the Picture. Enjoy the read, and if you are interested in about a couple of hours of good film, stream the film on one of the services where it can be found. https://www.imdb.com/title/tt0303353/
  15. Fee/Headrick Entertainment awards long term employees with $5 million dollars in bonuses, as well as a five night cruise in the Bahamas, following the acquisition of the company by Dolly Parton vehicle World Choice Investments. Employees are pleased to be acknowledged and rewarded by David Fee and Jim Headrick so generously as they share in the spoils of a top of market price with those who have helped grow the company. This taking care of employees was also evident two years ago when a devistating Firestorm roared through Sevier County and the Hreat Smoky Mountains National Park. FHE lead in giving to recovery efforts with an immediate $500,000.00 initial gift. In addition FHE provided unparalleled support to staff and the families of employees who suffered fire losses with housing, relocation funding, utility, food, and cash assistance. FHE immediately opened warehouse and under utilized theatre space to organize and act as relief distribution centers and centralized receiving depots. Here is a local television story containing some details of the employee reward and bonus program: https://www.wvlt.tv/content/news/Pigeon-Forge-entertainment-group-to-give-employees-5M-in-bonuses-cruise--503073961.html?fbclid=IwAR3_qLJ9ljPnydoxx0yD-ERi7eObILwog7o1TiZGy9Bmmx_ZiXxVmmS13GQ
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