Leland Wykoff

Universal has entered a quiet period surrounding planning and negotiating Theme Park assets near Bedford: Universal in talks with government over UK theme park | blooloop

Appeals Court holds Cedar Fair did not violate the Americans with Disability Act when it refused to let a blind man operate a bumper car without assistance. Further, the court ruled Cedar Fair had no duty to provide assistance to the blind man by providing an Sherpa for the experience: Appeals court sides with amusement park operator over blind man on bumper cars | St. Louis Record (stlrecord.com)

Inside the collapse of Disney’s America, the US history-themed park that almost was (theconversation.com)

Like Beatrice snatched products from Wesson Oil to Samsonite Luggage?

The generally accepted rule for prudent theme park development calls for a major marketable capital investment (MCI) to occur on a three year cycle. Historically, a MCI was viewed as a major thrill ride, themed area installation, or addition of a major resort hotel property. In the two valley years between MCI smaller investments such as flat rides, theaters/entertainment venues, restaurants, retail, and place-making would be undertaken. This allocation of investment allowed parks to fully capture revenue values from major ride additions as the first year brought in new-to-park guests, second year those guests returned along with fallen-away guests, and third year the shine was still on the major investment and pulled in new and returning guests as the reputation of the investment continued to create and maintain guest demand. Valley years allowed parks to take a break from large capital intense investments while focusing primarily on direct revenue generation additions such as food and beverage, shops, parking, line-skip passes, and other new revenue streams. Example: Cedar Point invested heavily in the "new" Top Thrill 2 attraction for 2024. Prior to the discovery of the issues which have crippled the deployment of this ride, we could assume Cedar Point would go approximately three years before the announcement of another major new attraction. In the valley years we could have anticipated water park additions, flat rides, Camp Snoopy improvements, new food venues, shopping, and such. With the coming merger completion of Six Flags and Cedar Fair in the next week or so we can assume a much refined, and likely reduced from historical levels, MCI plan chain wide. Six Flags parks will require much cosmetic adjustment such as painting, deferred maintenance attention, place-making, food and beverage enhancements, and retail additions to improve on-park expenditures. Seasonal enhancements such as IP related Haunt product introductions as just announced will flesh out the capital expenditures budget. Major rides will likely be placed on the back burner for a couple of years as park potentials are evaluated, marketing studies are undertaken, and legacy Cedar Fair management works to establish and restore relationships with major ride manufacturers. Given the past bad blood between Cedar Fair and several ride manufacturers, and the effort to elevate Zamperla via TT2 has gone south, compounding Cedar Fair management failures to manage ride projects on-time and on-budget (think Knott's Berry Farm and its long idle Montezooma's Revenge and ongoing issues with Xcelerator), failure to successfully implement the Amusement Dark project introducing dark rides to each park, and apparent lack of follow thru on projects to expedite replacement ride part manufacturing in Ohio (rather than awaiting long delays on parts to be crafted by China and other Asian suppliers), management seems lacking in the skill sets necessary to engage in large complicated capital projects at this point in time. Watch for Cedar Fair/Six Flags managers to be picking up paint brushes, rather than erecting cutting edge rides for the foreseeable future. After all, management is still struggling to integrate an off-the-shelf mouse coaster at Cedar Point sourced from Zamperla. Tough engineering projects are likely on hold for the time being at Six Flags Entertainment.

Cedar Fair could have put the breaks on this IP expansion had they so desired. This is a clue the combined company will not run away from expanded IP as Cedar Fair historically has. Reports suggest additional Six Flags parks expect to announce additions of the stable of participating parks in adoption of the haunted house IP. As major streaming services expand efforts to monetize IP revenues watch for CF/SF to expand these branded experiences. Paramount and Warner Bro. Discovery are both desperately seeking to turn around losses in streaming. Neither of these entities have substantial theme park presence. Thus partnership opportunities exist which could be beneficial and profitable to both studios and the new Six Flags. Keep in mind these are rather low cost additions and enhancements to offerings already budgeted and planned for park operations. Large parts of each additional penny of revenue falls directly to the bottom line of operating profitability. Such deployment of capital investment has the potential of significant returns at low risks and low costs. Such enhanced haunted product will also be characterized by high mobility--haunt features and themes can be switched out and rotated among parks to provide constant annual refreshment of the product in various local markets. The potential exists for expanding relationships and partnerships with streaming services eager to expand product lines, awareness, merchandising opportunities, and unlock values from their vaults (note Saw is promoted as a 20th Anniversary product). The combined Cedar Fair/Six Flags provides a platform for showcasing exciting seasonal offerings and launching stages for a variety of IP products. These can potentially drive admissions, merchandise, and other on-park revenues. All at relatively low costs. The combined Six Flags Entertainment will be stretched thin as it deploys capital expenditures to upgrade both parks and park/company reputations. This will require an agile deployment of invested capital spends. FUN will be looking to maximize impacts and create bragging rights over competitors. FUN will not have adequate capital spend to simply add signature ride after ride to parks in the near future. Wow Factors must arrive at lower costs and risks. Seasonal and shoulder season revenue expansions are prime areas of exploitation to produce year round excitement and highly desirable new guest offerings.

Cedar Fair announces and confirms the management leadership which will take the reins of the newly merged company. Six Flags Entertainment Corporation will be the name of the merger of Cedar Fair Entertainment and Six Flags. The merger is anticipated to close July 1, 2024. The new company will relocate corporate offices to Charlotte, North Carolina, whilst also maintaining some corporate functions and offices at Cedar Point in Sandusky, Ohio, at least initially. https://www.msn.com/en-us/money/companies/cedar-fair-six-flags-reveal-leadership-lineup-as-merger-finalizes/ar-BB1osAme

The Disney Shareholder vote for the Board of Directors is tonight 4/2/24 at 11:59 pm. This is your opportunity to vote, or change your vote, for the dissident Board of Directors slate comprised of Nelson Peltz and former Disney Executive Jay Rasulo (you must also vote "Withhold" on the following candidates: Michael B.G. Froman, Maria Elena Lagomasino, Craig Hatkoff Jessica Schell, and Leah Solivan) if your goal is to elect Peltz and Rasulo. Disney has lost its way. Disney seems to be doubling down on producing movies and entertainment for which no profitable market currently exists. Disney studios has lost more money in one year than any studio in history--and that's saying a lot. Disney Parks and Resorts have been neglected, under invested, and treated like cash cows to fund any manner of foolishness in other divisions of the company. The newest Disney Cruise Line ship has debuted to less than stellar reviews. Streaming services are a huge money draining mess. Who is Nelson Peltz? And why do shareholders believe Peltz/Rasulo is the catalyst need to effect positive change and get Disney back on track as the premier entertainment company? Because Peltz has pulled off such a task before: he lead the board turn around of Proctor and Gamble and improved the performance of the company to all time highs. Rasulo has been an insider at Disney and clearly sees the problems created by current leadership. After Nelson Peltz exited Proctor and Gamble he moved on the join the board of international consumer goods company Unilever. The turnaround is well underway, non-core product lines have been divested, board governance has improved, a sharp focus has been placed on the most promising, profitable, and consumer preferred brands, executive talent has been sharpened and adjusted to execute a plan of success. Below is a link to the Unilever Growth Action Plan which reports upon, updates, and provides clear details about the turnaround. This plan is miles ahead of anything Disney has crafted to outline a concise plan of attack upon their many issues. Read the Unilever Growth Action Plan and decide for yourself if this is the type of leadership Disney shareholders deserve. If you agree that it is, vote, or adjust your vote, tonight to support Peltz/Rasulo. For those who think they have to few shares to make a difference, you should know Peltz board vote was so close at Proctor and Gamble that initially the company announced he had lost the vote. In fact Nelson Peltz won the vote by an extremely thin margin of victory. It is not to late to quickly vote or adjust your vote tonight. Here is the promised link to the Unilever Growth Action Plan update: https://www.unilever.com/news/press-and-media/press-releases/2024/implementing-growth-action-plan-at-pace/

Oh, my. What does this announcement suggest we might look forward to under the proposed Six Flags Cedar Fair merger? Five plus year timelines to refresh, renew, and renovate rides? If Cedar Fair has had this much difficulty managing rather mundane roller coaster updates one must question the ability of current management to integrate an entire chain of parks composed of troubled assets. A season pass holder system in shambles, failing on-park revenue growth, vast areas lacking strong elements of 'place making,' rundown facilities screaming for serious and urgent maintenance, among a host of other issues. The capital investments necessary are a daunting task to grasp. Much less finance and execute. We are to believe an organization which lacked the necessary moving parts to repair two coasters in a timely manner at Knott's Berry Farm is the correct management team to take on Six Flags and its plethora of problems? Color me skeptical.

Cedar Fair settles with two employees for $50,000.00 in housing age discrimination issue. Cedar Fair also agrees to modify housing requirements and procedures. https://www.cleveland.com/court-justice/2024/02/cedar-points-parent-company-agrees-to-reforms-pay-50000-in-eeoc-age-discrimination-case.html

The Cedar Fair board has began the process of awarding executives bonuses for arranging the proposed Six Flags merger. No doubt other payouts will be announced as time marches on. It is telling former CEO, board member, and man charged with acquisitions, Matt Ouimett is no longer onboard and seems to be left out of the bonus gravy train. Things to think about. https://www.tipranks.com/news/company-announcements/cedar-fair-grants-special-award-to-executive-pre-merger

Today local newspaper the Sandusky Register reports on regional investors questioning the proposed merger between Cedar Fair and Six Flags. Quite interesting reportage: https://sanduskyregister.com/news/503820/rotten-merger-deal-raise-red-flags/

Once upon a time Cedar Fair planned to open a modest mass market hotel at Canada's Wonderland. Announcing the project way back in August 2018 plans called for a co-branded Hyatt Place and Hyatt House 203 room facility to welcome guests by 2020. The hotel was regularly mentioned and highlighted in analyst conference calls--until it suddenly wasn't. Cedar Fair confirmed the project had been abandoned when questioned by a shareholder seeking progress reports. Cedar Fair spokesperson indicated the lengthy government permitting and approval process would have to start over fresh if a project was later initiated. Oddly, Cedar Fair spent a good deal of time and money on a project that would not come to fruition. Now it appears a new project may well be underway up North. A trademark application has reportedly been filed for a hospitality development which suggests a project much beyond the scope of a cobbled together Hyatt may be in the works: Here is a link to the Hyatt Hotel announcement from August 27, 2018: https://newsroom.hyatt.com/082718-Cedar-Fair-to-Open-New-Hyatt-Place-and-Hyatt-House-Hotels-at-Canadas-Wonderland-near-Toronto Given the proposed merger with Six Flags it is not clear if this hotel project, and other expansions, may be abandoned as austerity budgeting could be ushered in and grip the combined SIX/FUN company. In any event, hats off to UrbanToronto.ca for reporting on these developments.

Here is a quick review of the "dirty dozen" crimes Disney allegedly committed in relation to Reedy Creek Improvement District:

Link to 72 page audit report: https://dw-wp-production.imgix.net/2023/12/CFTOD.pdf

Disney benefited for decades as a result of the Florida special Reedy Creek Improvement District. An audit of the district has turned up devastating allegations and examples of abuses of power including property tax issues, failure to deliver promised developments, bond and securities issues, evading Florida Sunshine Laws governing open government meetings and records, gifts funneled to politicians, operating ghost cities, bribes, and a host of other violations. A good overview of the issues are in the video link below:

A big elephant is in the proposed merger room. Expansive press releases from both Six Flags and Cedar Fair fail to address the possible negative tax implications of this transaction. Cedar Fair trades as a Master Limited Partnership which carries with it special tax benefits to Unit Holders. Should this merger result in conversion to a regular corporation, such as the mentioned C Corporation buried in paragraph 14 of the press release, tax implications for both profitability, unit holder payouts/dividends, and other issues are not directly addressed, or in fact, acknowledged: "Upon closing of the transaction, the combined company will operate under the name Six Flags and trade under the ticker symbol FUN on the NYSE and will be structured as a C Corporation." This is quite the omission.

For a refresher please re-read my post from September 1st concerning Matt Ouimet's sudden and shocking departure from the Cedar Fair family: This sudden move should have everyone thinking one name. Disney. Ouimet played significant roles at Disney in his earlier career. He developed Disney Cruise Line, oversaw the refreshment of Disneyland in preparation of its 50th anniversary, and was involved in the development of Disney time-share products. Currently Disney is facing challenges galore. Speculation circulates Disney may even be broken into two companies--one comprising the Parks/Resorts, retail, licensing of merchandise, and other similar business lines. Should this come to fruition Disney will be searching for executives to lead the spin-off businesses. Skill sets Ouimet is uniquely qualified to fill. Following Ouimet's tenure at Cedar Fair as an extremely effective and transformative CEO, he was tapped to serve on the Board of Directors in a role created to allow him to seek out development and acquisition opportunities to grow Cedar Fair. In this new role Cedar Fair failed to make any significant park acquisitions until 2019 when it was announced two Schlitterbahn Waterparks and Resorts in Texas would be acquired. Quickly thereafter Cedar Fair announced the acquisition of Sawmill Creek hotel, golf course, and marina in the Sandusky area. These acquisitions are minor when compared to the sale of Great America property in California with only an 11 year operating sale-lease-back agreement in place. Read this quote from the Cedar Fair announcement of Ouimet's departure carefully: “I am extremely grateful to have been a member of the Cedar Fair management team and board of directors,” said Matt Ouimet. “I have great confidence in the Company’s current leadership team and will enjoy following their future successes.” Could Ouimet be foreshadowing a similar future role with another company overseeing acquisitions and development of entertainment, waterparks, amusement parks, and resorts? A position in which he would be looking for strong management teams overseeing portfolios of desirable cash flow positive properties ripe for application of Intellectual Property assets to leverage value, attendance, and profitability? If so, Ouimet would be keen to "enjoy following [Cedar Fair's] future successes" and possibly being a part of that bright future.

Stranger combinations have happened. Carnival, the K-Mart of cruise lines, merged venerable Cunard into their family of brands, rather successfully. This was accomplished by maintaining brand integrity of Cunard. It is not clear, at this point, if brand integrity will be maintained, much less expanded, by legacy Cedar Fair parks. Should legacy FUN Parks take on the Six Flags moniker it could damage the premium consumer perceptions of those properties. Customers would suddenly come to equate a Six Flags Kings Island with the likes of a Roses Express discount store.

Will Cedar Fair really be majority shareholder? Note the shareholders of FUN will only have a slight edge of control at 51.2 percent. However, just as importantly, the new proposed board of directors will be comprised of an equal number of members from both Six and Cedar Fair, directly from the FUN press release: "Following closing of the transaction, the newly formed Board of Directors of the combined company will consist of 12 directors, six from the Cedar Fair Board and six from the Six Flags Board." Compounding this equal representation on the proposed new board, is the carryover of Six Flags staff. Given both Six CEO and CFO are given prominent positions political battles for internal direction and control are quite likely to develop. Cedar Fair appears to be the controlling party only in Fantasy Land.

Where to begin with this delicious story of a FUN/Six merger-in-the-works? Lets start with former Cedar Fair CEO, and Board Member, Matt Ouimet's rather unusual statement, September first, as he unexpectedly resigned his FUN board seat and special role overseeing development and acquisitions: "I am extremely grateful to have been a member of the Cedar Fair management team and board of directors, I have great confidence in the Company's current leadership team and will enjoy following their future successes." As I noted and posted in this forum at that time: "Could Ouimet be foreshadowing a similar future role with another company overseeing acquisitions and development of entertainment, waterparks, amusement parks, and resorts? A position in which he would be looking for strong management teams overseeing portfolios of desirable cash flow positive properties ripe for application of Intellectual Property assets to leverage value, attendance, and profitability? If so, Ouimet would be keen to "enjoy following [Cedar Fair's] future successes" and possibly being a part of that bright future." And here we are. Meanwhile news at Disney has gone from bad to worse. In the last week Disney news progressed into the realm of bleakness: Daily Wire announced, on Disney's 100th anniversary no less, they would be releasing a live action film adaptation of the classic tale of Snow White and the Seven Dwarfs just in time to compete with the much maligned Disney criticized woke Snow White revised release date. Disney is staring down an $8.61+ billion dollar payment to theme park rival and media competitor NBC Universal to complete the purchase of the remaining third of Hulu. Disney theme park attendance is widely reported to be dismal, perhaps in large part due to punishing price hikes, which is expected to suppress Disney revenues further, going forward. Disney recent film releases have been resounding flops failing to reach revenue expectations and generating losses. ESPN is on the block, as are other properties such as ABC, according to reports. Enter South Park. Broadcasting a devastating parody Special Event delving into Disney, CEO Iger, Kathleen Kennedy at Star Wars and Marvel divisions, highlighting serious management missteps, failures, gender and race swapping in classic stories, and the recent collapse of Disney shares by 60 percent. Enter Nelson Peltz. Activist investor extraordinaire who has drastically increased his Disney holdings as he promises a proxy fight (if necessary) to seek "multiple" board seats to shake-up Disney. Possibly selling off the Theme Park Division, and other properties and assets, to restore historical levels of profitability and growth opportunities to the company. Thousands of new layoffs are expected. Scuttlebutt suggests CEO Iger may be on his way out prior to his contracts end. The South Park Special is so severe none other than Vanity Fair felt the need to publish an article exploring the spot on episode: https://www.vanityfair.com/hollywood/2023/10/south-park-takes-aim-at-the-woke-disney-culture-wars Spoiler alert: South Park has announced it is a trilogy, with two more specials to soon drop. Like a shoe. Given this landscape it might make sense for Cedar Fair to acquire Six Flags. Combined they could fend off subpar offers from competing players in a consolidating industries of theme parks, entertainment concerns, and IP properties looking for new channels to expand customer engagement and acquisition. Should Disney spin-off a Theme Park entity it would likely be seeking growth opportunities in prime regional parks such as those held by Cedar Fair, and possibly Six Flags. Merlin Entertainments was bought out by private equity Blackstone and is looking to expand. Sea World Entertainment would become a small fish in a big pond should a Cedar Fair Six Flags merger consummate. Herschend Family Entertainment would be in a tight corner with limited expansion opportunities. Tomorrow morning Cedar Fair has a quarterly conference call with analysts. It is expected terms of the merger may be announced in this call scheduled for 10:00 am EDT (link to listen live to the call below). Given the dynamic repositioning, branding, expanding, and turmoil in the Theme Park business, what are we to make of this reports today by respected sources such as The Wall Street Journal, Reuters, Forbes, Bloomberg, Cleveland Plain-Dealer, many reporting merger verification by at least two knowledgeable sources "unauthorized to speak" on the deal. Translation: it is highly likely to be true, and we can speculate that the "unauthorized" sources may be carefully orchestrated leaks by one or both parties to the proposed merger. Concerning questions of who will be acquiring who. Cedar Fair has the stronger management in industry experience, is has been much more productive in revenue generation than Six Flags (FUN generates more revenue with significantly fewer parks than Six). Six has gone thru CEO's at a frightening clip. Six seems not to enjoy the skill set at the management nor board level to be the acquirer. Also, it is worth noting, FUN has not made a statement repudiating the story. This silence speaks volumes. I feel it is most likely FUN will be the acquirer in this transaction should it come to fruition. However, it is possible Six Flags may be the acquirer in the event such a transaction would resolve sticky issues such as non-compete or corporate governance issues which could stand in the way of CEO and other top management employment due to covenants or other restrictions (or, of course, to trigger enhanced payments to management due to employment contracts). It is likely current CEO Richard Zimmerman many not be ascend to the CEO position of a much larger entity as would result from a FUN/Six combination. One candidate comes immediately to mind who possess the skill sets for the task: Matt Ouimet (remember, his final task and tenure at Cedar Fair was overseeing acquisitions and growth opportunities. Recall his departing words about "enjoy[ing] following their future success." Cedar Fair management could right the Six Flags ship particularly in areas such as revenue management, cost containment, place making, cuisine, parking, marketing, and CRM programs to identify and increase season pass sales and productivity along with food, beverage, and retail revenue enhancements. Six Flags has payed a heavy price for efforts thus far to eliminate serving in the role as cheap day care for rowdy teenagers and youth. Revenues and earnings have suffered. But an important corner has been turned. How might such a transaction be accomplished? Likely a stock swap deal, possibly involving some measure of cash. Due to high interest rates, an all cash deal would likely be prohibitively expensive. Cedar Fair has conserved cash by reducing the unit holder payout (read, dividend) and reducing debt owing to the proceeds of the recent sale of California's Great Adventure. Note Cedar Fair has not projected expected revenue losses going forward which is a bit odd given the CGA revenues will cease with the closure of the park, which could be in as little as three years (possibly longer under the lease agreement). Cedar Fair has not warned of revenue losses as they likely have been planning an acquisition for some time which would more than offset the loss of a major park. Six Flags more than fits the bill. In any event it shall be FUN to listen to the Quarterly Conference Call with analysts Thursday morning shortly following the pre-market release of the financials: https://www.cedarfair.com/news

South Park Panderverse special reportedly delivers devastating sarcasm and take down of Disney management and story telling failures. Panderverse has been racking-up interest at eight times that of Marvel online. The SP episode exposes Disney for poor management in the most serious cartoon manner imaginable. Iger is depicted as Cartman riding the Disney stock price down, down, down. Powerful indeed. Here is an analysis of part of the issues covered in Panderverse Part 1 (of an expected 3 episode outing).

See EEOC news release concerning the legal action the Agency is taking against Cedar Point's parent company(s): https://www.eeoc.gov/newsroom/eeoc-sues-ohio-amusement-park-age-discrimination

Updating legal issues involving Cedar Point provided employee housing and age discrimination targeting older employees, who were told CF policies indicated they were not eligible for housing, are progressing. One of the three known parties to the suite is reported to have reached an as of yet undisclosed settlement with FUN. See article for details and possible updates: https://www.cleveland.com/court-justice/2023/09/eeoc-sues-cedar-points-parent-company-over-housing-policies-for-workers-40-and-older.html