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SF had their Q4/year-end call with the analysts today...I won't go into the financial results (the earnings release is on their investor information site), but wanted to pass along a funny (but not surprising) comment from Mark Shapiro.

One of the analysts asked if SF would possibly be a contender in CBS's sale of Paramount Parks, and Sharpiro said:

"Let me be perfectly clear on this--absolutely not."

He then went on to say that they had way too much to fix in their existing parks (not to mention the need to reduce their debt load), and couldn't consider any acquisitions...certainly not one of that size.

Again, not surprising...anyone with any knowledge of the industry had pretty much counted SF out from the beginning. But, from time-to-time someone still posts their "theory" that Six Flags will be the buyer. I think the definitive statement from the horse's mouth pretty much tells us definitely who Paramount Parks' buyer won't be. biggrin.gif

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HE could say that just to throw people off but I doubt it.  We all knew that Six Flags wasn't going to buy them anyway.  its gonna be Cedar Fair, Universal or Bush Gardens.

A definitive comment in an earnings call like that would fall under the jurisdiction of the SEC. While certain comments/predictions can be protected under the "safe harbor act", purposely lying to analysts (and thus the stockholders) would not. (That's one of the things that got Ken Lay into trouble...)

Yep, most people who understand the situation knew that SF probably wouldn't even be involved in the bidding. However, this is the first time that an industry CEO has said in public that their company absolutely would not be interested in the sale Paramount Parks.

And, my money is still on Blackstone, Madison-Dearborn, Texas Pacific, or a host of other investment funds before any of the current industry players. Of the park chains, CF would be the most likely, but there are still some substantial barriers there as well.

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The big hurdle for Cedar Fair would be the cost... Most reports put the purchase price in the neighborhood of $1-1.2 billion dollars. As of 3:00 p.m. today, CF's total market cap is $1.55B, with about $500M in current debt.

Of course, "mergers of equals" is not uncommon, but usually it's done via a combination of stock & cash, where the purchasing company gives a 1x multiple of stock in the new combined company to the owners of the company being purchased. However, since CBS's whole goal is to unlock the value of the theme park unit from their balance sheet, it doesn't make sense why they would want to trade their theme park unit for stock in someone elses...

CF could probably work out financing, but that would put their debt load in the $1.7B range...nearly as bad as SF. They could issue more stock, but that would dillute the ownership of their current unit holders (which usually gets stockholders pretty angry...) And, of course, they could partner with someone else to manage the acquisition. (Hmmm...maybe a 50/50 deal like Blackstone has with NBC/Universal in Universal-Orlando?)

But of course, I'm just speculating...

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HE could say that just to throw people off but I doubt it. We all knew that Six Flags wasn't going to buy them anyway. its gonna be Cedar Fair, Universal or Bush Gardens.

I CAN GURANTEE YOU, none of those 3 companies will buy paramount parks. I'll bet $500 on it... None of them have the money to.

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Uh, no.

Universal's Theme Parks are controlled by General Electric and Blackstone Group. Together they could buy a company 10 times the size of Paramount Parks and not even sweat.

Anheuser Busch could also afford Paramount Parks with very little difficulty, but probably isn't interested.

Cedar Fair has already been discussed, but could, with difficulty, finance the purchase. Hopefully, though, they learned a lesson (or two or three) with their somewhat recent acquisition of Six Flags Worlds of Adventure.

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Take this for what its worth. Rumor has it, Cedar Fair made an offer.....$900M. Viacom turned them down, obviously not reaching their 1.2B price tag. Of other note, if a purchaser for the chain isn't found by spring, the Parks are reportedly to be auctioned off individually. Kinda sad to think about them not being a chain, but that wouldn't surprise me at all. So for all those who think you're out of the water for Cedar Fair purchasing the Park, guess again. Again, all just rumor....but it does make ya think! :-)

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I'm sure all the parks have made offers but the fact is its at a auction, and im sure they were overbid by an investor. The park will be bought by an investor. Kept at the same value, then when gas prices level out and people begin to travel again they'll be sold off individually probly in the next 10-15 years. People just aren't going to theme parks right now. Buy low Sell high. Your probly going to learn very quick that paramount isnt nearly as bad of a company as you guys say it is. If youve truly looked into how the parks operate it would be a completley diffrent story.

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Some of us know well how parks operate...from Busch to Six Flags to Paramount to Disney to NBC Universal to the family parks.

And I, at least, have NEVER said Paramount was a bad operator. There are things they do very well indeed: rides operations, admissions, season pass processing (including letting customers use next year's pass after processing this year) customer service, merchandising, games.

And there are things that they could do much better, but choose not to: theming (particularly the maintenance thereof), entertainment, shows, food, landscaping.

They do what they do because it is what they have chosen to do.

A new operator WILL be different. In some ways better, in other ways the same, in others not as good as Paramount.

That's the way it is.

I also would not assume the parks will eventually be split up. I actually think that is among the least likely of outcomes...though I CAN easily see the Canadian park going its own way. . .

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And I, at least, have NEVER said Paramount was a bad operator. There are things they do very well indeed: rides operations, admissions, season pass processing (including letting customers use next year's pass after processing this year) customer service, merchandising, games.

Paramount may operate PKI well, but when it comes to PKD- the operations are plain embarressing. It is quite easy to see that Paramount treats PKI like the signature park.

I have been to PKD twice. Once in 1999, and again last summer. Both times the park was a major disappointment. Rides were down, limited concessions available, lack of security, not clean, etc. Quite honsetly, back in '99 my wife and I planned to go to PKD for two days with our PKI season pass, but about 3:00pm on day one, I found directions to get to Busch Gardens for day 2. Going to BGW saved the trip.

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Let's not tell TTRyan who owned Universal during the time Islands of Adventure was planned and built! smile.gif

No, it wasn't Japanese.

No, it wasn't Chinese.

Think about fried potatoes....or bakeries at the end of International Street (well, there USED to be one...)

Oui, oui, mon ami!

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And I, at least, have NEVER said Paramount was a bad operator.  There are things they do very well indeed:  rides operations, admissions, season pass processing (including letting customers use next year's pass after processing this year) customer service, merchandising, games.

Paramount may operate PKI well, but when it comes to PKD- the operations are plain embarressing. It is quite easy to see that Paramount treats PKI like the signature park.

I have been to PKD twice. Once in 1999, and again last summer. Both times the park was a major disappointment. Rides were down, limited concessions available, lack of security, not clean, etc. Quite honsetly, back in '99 my wife and I planned to go to PKD for two days with our PKI season pass, but about 3:00pm on day one, I found directions to get to Busch Gardens for day 2. Going to BGW saved the trip.

I haven't been to PKD since the early 90s, so I can't really comment on that park's operation. However, like everything else, local management seems to be what makes the difference in a park's operation.

SFOT was my "home" park for a couple years. I can honestly say that I always had a great time when I went there...the park was clean, well maintained, and staff/customer service was good. It was a completely different experience from my visits to SFWOA! It was like the two parks weren't even owned by the same company... By the same token, I had several good experiences at SFGA, and very negative ones at SFMM (and SFKK)...

One of the things that Mark Shapiro mentioned in the call was their plan to centralize more of the corporate operation for things like F&B and retail. I was suprised to hear how much discretion the local GM had in things like food pricing, retail items sold, procurement, etc. While there is an argument to be made for basing those things on the local market, there's also a lot of value in consistency and economies of scale. I've spent the majority of my career working on the corporate side of the hospitality business in companies ranging from a few hundred locations to 1000+...I can't imagine not centralizing those business units.

I think Shapiro has his work cut out for him, but after listening to the analyst call I'm much more impressed with him. In everything I had read up until that point, I had just considered him some slick marketing guy...but it was very apparent from his comments that he has a real passion for the parks, and sincerely wants to restore the value of the SF brand. I'm rooting for him to do just that...

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  • 3 weeks later...

All I can say aout SixFlags is they are terrible of running parks they bought Wyandot Lake here in columbus and it's been a joke I thought that they would at least try to make some imporvements to the park instead they just ran it into the ground I'll be glad to see the day when the Columbus zoo takes it back over

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All I can say aout SixFlags is they are terrible of running parks they bought Wyandot Lake here in columbus and it's been a joke I thought that they would at least try to make some imporvements to the park instead they just ran it into the ground I'll be glad to see the day when the Columbus zoo takes it back over

They seem to do a fine job here in ATL. The word about Goliath is nothing but posetive.

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