Leland Wykoff

The timing of this announcement suggests all is not well at Cedar Fair. I placed a telephone call to Investor Relations representative Mr. Michael Russell seeking additional information about these departures and the appointment of the new board members. I left a voice mail message seeking a return call from Mr. Russell concerning the BOD changes. Later I received a call from someone in Investor Relations who mistakenly thought I was calling concerning tax information. She then acknowledged the mistake, saying she returned the wrong call, and that Mr. Russell had my message and would be calling me at some murky unspecified time in the future. She cited it may be a few days as he was "busy returning other calls" as I might imagine. Hum. Not inspiring of confidence. A couple of issues make these departures and appointments concerning: First, it is the Unit-holders responsibility to elect board members, not managements duty to appoint them (unless, of course, in cases such as sudden incapacitation, death, or removal due to cause or malfeasance). Cedar Fair held its Annual Shareholder Meeting just a short time ago on May 18th and that was the proper opportunity and time to replace directors. Second, what transpired in the ensuing four odd months to require the sudden and unexpected departure and replacement, by appointment, of these board members? Cedar Fair provides little guidance on these issues in their News Release. Why? Perhaps timely responding to investor inquiries would help quell concerns. Third, why did Cedar Fair fumble the New Release, quickly requiring an updated document retracting the effective dates of the departures and appointments? First release indicated the effective date was October 3rd, then this was corrected to October 1st. Sloppy. Suggests turmoil in the corporate offices. How could such a vital fact have been wrongly reported? Did no one proof read the first sentence of the News Release? Forth, why has Cedar Fair not released information addressing these unsettling departures and appointments? These do not have the appearance of being "business as usual" type transactions. Given the unsavory history of misleading announcements concerning the departure of former executive Jacob (Jack) Falfas this becomes a more salient transaction. Recall, FUN was found to have lied about the circumstances of Falfas's departure by both courts and arbitration judges. Fifth, it is odd newly appointed BOD member, Ms. Michelle McKinney Frymire, holds expertise in the areas of Audit, Board and Corporate Governance, Nomination, and Compensation. She would be aware it is the duty of such committees and directors to look forward and present viable candidates to stand for election at Annual Meetings. That this did not occur in this instance suggests something is off kilter. It will be interesting to track Ms. Frymire's tenure on the FUN board. Six, newly appointed Director Jennifer Mason has an impressive history of finance and risk management duties at Marriott International. "Capital allocation, financial risk management, insurance, financial strategy, capital allocation, financial risk management, insurance, claims, business continuity, and global safety and security" are all pointed out as skills she brings to Cedar Fair in the News Release. Interesting the release failed to explain how those specific skill sets would benefit the company. Has a problem involving a deficit in these areas been identified by Cedar Fair? Again, the silence from FUN is deafening. Seven, why are calls and messages not being returned by Cedar Fair in a timely manner? Other than my calls yesterday to Cedar Fair additional calls have gone unanswered. Including the request for an email address for an executive. The unprofessional behavior is concerning and leads to a loss of confidence in the management and directors entrusted with the care of our company. This lack of attention and transparency leaves the impression Cedar Fair may be hiding something concerning. Perhaps Corporate Director of Investor Relations Michael Russell will carve out the time to return calls and address these questions.

https://www.barrons.com/articles/six-flags-six-stock-new-ceo-analysts-51636999062

The sudden and unexpected departure of Cedar Fair chief council Milkie has ruffled feathers at Sandusky City Hall. The Sandusky Register has a surprisingly frank story delving into the concerns and dissatisfaction by city officials. The article touches upon concerns about corporate positions shifting to the Charlotte office. https://sanduskyregister.com/news/326168/city-wants-sit-down/

Cedar Point's Castaway Bay indoor water park resort, along with the recently acquired Sawmill Creek Resort are to remain closed throughout the 2021 season. Renovations to both properties were underway following the 2019 season. However, work was slowed or suspended during the covid closures and crisis. It is unclear why hotel renovations were not completed or saw substantial progress during the covid pause. The delay in completing refreshments on these properties will depress off park revenues and earnings in 2021. https://www.cleveland.com/entertainment/2021/03/cedar-points-castaway-bay-wont-open-this-year-as-renovations-resume.html Additionally, the work scheduled to begin at the announced hotel at Canada's Wonderland was halted and the permitting process was abandoned by Cedar Fair. This shall delay the progress of pivoting CW into a Resort property with extended seasons. WinterFest at CW was exceptionally well received indicating the real posibilities for additional season extending festivals and events. In another blow to FUN some partners who provided and produced recent events, such as Feld Entertainment with the Monster Truck production, have not survived the economic covid crisis. These bankrupt partners may effect offerings in the coming season as events are paired back. Cedar Fair has made much of the learning they have come out of the lost covid year. The implications are FUN learnt a thing or two about the successful operation of food and other festivals independent of full park operations. This suggests more special event offerings may be on the table which will take place without rides and all attractions being open and full park operations underway. Such partial resort operations would substantially cut opperating costs while providing new cost effective revenue streams. Hotel operations being curtailed will necessarily hamper these efforts. It seems very short sighted of FUN not to have taken advantage of the 2020 pause and completed hotel and other renovations.

The deadline for responsive proposals to the City of Gilroy for development opportunities upon excess land at Gilroy Gardens had been extend approximately three weeks, until February 12th. The proposal deadline extension suggested the City might have been engaged in chasing a particular developer, or developer group, negotiating an answer and submission to the Request for Proposal. The City of Gilroy received one responsive proposal from Imagine That Design and Production, LLC. Due to pandemic related city office closures it is possible other proposals may have been submitted. Once the mail has been checked and vetted Wednesday any additional submissions will be recorded. It is not expected other responsive proposals were likely received. Jimmy Forbis, Gilroy City Administrator, has confirmed the receipt of the response from Imagine That Design and Production, LLC. In addition, Gilroy has removed the RFP from its website as the opportunity to respond has officially closed. As more details emerge I plan to report them here.

Gilroy Gardens to open May 22 under the continued management of Cedar Fair: https://patch.com/california/gilroy/gilroy-gardens-announces-2021-reopening-date

Herschend set up an acquisitions and mergers branch before the epidemic arrived. Heavy hitters involved. Included was a stated intent to locate investment partners. Cedar Fair took simular action several years ago setting up former CEO Matt Ouimet in a position and office to oversee acquisitions. Then absolutely no transactions occured for years. The pandemic may accelerate, or act as a deceleration to acquisitions. Much will depend upon both healthy access to capital along with depressed asset prices, mixed with available funding for operators to restart operations. Here is a story about Herschend moves in the Growth Department: https://www.knoxnews.com/story/money/2020/11/24/dollywood-new-president-looks-to-expansion-smoky-mountain-cabins-dreammore-res/6405205002/

The Orange County Register has published an interesting report which delves into why Disney has moved to end its season pass programs. The likely culprit seems to be a concern millions of season pass holders will swamp Parks reservations soaking up all available visitations due to covid required crowd reduction efforts It helps to think about Park capacity much as an airline or hotel conceptualizes seat and room inventory. Once the airplane leaves the runway with an empty seat that revenue can never be recaptured. The seat was as perishable as a Boysenberry left to rot on the vine. Ditto a hotel room. If it fails to sell tonight that room night of revenue can never be sold and captured. The sun set and rose on the opportunity to sell the inventory. The room revenue potential is forever lost. Perished in the daylight. Now think about Park visits in the same vein. No longer able to just squeeze one more visitor in the gates due to covid capacity limits, your product has become much more like an airline seat or hotel room. Both industries the management of occupancy or seating capacity is referred to as yield management. The goal is to achieve some level of revenue on every seat or room every day. Some seats will be sold at a discount, if necessary. Same for the hotel room. At the end of the day the airline or hotel achieves increased revenues. Doesn’t that sound an awful like an amusement park with covid crowd restrictions? Yield management to the rescue. Suddenly, the Park must make each seat count. Maximum revenue must be obtained from each admission. See the problem with unlimited season pass admissions? On many days they are capable of soaking up every available space but at highly discounted prices. Best for Park industry to start selling the limited capacity at premium rates—just like cruise lines do. With suddenly limited capacity at Parks the value and revenue stream from each ticket becomes much more critical to company health and profitability. Indeed, it becomes paramount. The best, highest spending, guest must be placed in the Park first and foremost. Then unsold space can be discounted and put on clearance to harvest additional revenues. Just like an airline seat. These are the concepts the Orange County Register newspaper report hints at but fails to spell out in simple terms. Fram a revenue perspective Amusement Parks are now much more like hotels than a festival ground, which can almost always accommodate just-one-more guest. https://www.ocregister.com/2021/02/04/disneyland-seizes-opportunity-to-reboot-annual-pass-program

More details on the plans: https://gilroydispatch.com/year-in-review-2020-gilroy-seeks-developers-to-advance-recreational-goals/

Gilroy Gardens, managed by Cedar Fair for several decades, is seeking a new Development Partner to expand and utilize hundreds of aditional undeveloped acres with bike trails and other adventure and recreational uses. This could signal the impending end of Cedar Fair's management contract: https://patch.com/california/gilroy/gilroy-recreation-based-tourism-development-proposals-sought

Disney announces end of Season Passes as California Parks reopen following Covid interuptions. Look for other industry players to scrutinize Disneys move toward a membership type program and expect other chains to emulate the Magic Kingdoms lead. https://www.latimes.com/entertainment-arts/story/2021-01-14/disney-annual-pass-disneyland

https://www.ocregister.com/2020/12/29/imagineer-joe-rohde-reflects-on-40-years-of-dreaming-up-disney-theme-park-attractions

Lets try posting the link again. Sorry: https://sanduskyregister.com/news/293840/marous-announces-acquisition-of-battery-park/#:~:text=SANDUSKY — Battery Park Sandusky — an,commissioners agreed to the deal.

Interesting development involving management of a Sandusky marina. Given Sawmill Creek marina has a history of losses (see allegations from lawsuit in report above). Perhaps consolidation in Marina operations is coming to the lake front: https://sanduskyregister.com/live-content/subscribe/

The Sandusky Register reports on a lawsuit filed by former partners of Sawmill Creek Resort claiming they failed to receive profits from the sale. Of particular interest are alleged revenues and losses reviled in the filing. The suit claims the marina saw only about $330,000.00 in revenue in 2017. The golf course was operating at a loss most years acording to the court filing. The Resort was reportedly in debt. Cedar Fair acquired Sawmill for around $13.4 million dollars. Originally announcing a two year renovation and refreshment would be undertaken. Cedar Fair did an about face and announced a full closure of the Resort with all or most work to be completed over the winter and spring. Renovation efforts were reportedly suspended, stopped, or significantly pared back following the pandemic outbreak. https://sanduskyregister.com/news/293624/former-sawmill-investors-sue/

Here is an interesting story: https://www.postandcourier.com/business/carowinds-theme-park-on-the-sc-nc-line-to-reopen-this-year/article_15c4dc6c-1936-11eb-96c1-87ed1331f50a.html Carowinds is likely opening this season to position itself for opening for operations in Spring 2021. They may wish to develop a track record of success they can point out to justify the safety of a fuller reopening next season. Carowinds strattles two states thus requiring multiple jurisdictions approval of broad plans to reopen (possibly to limited operations) next year. The events planned for this season could, conceivably, take place in only one state. Thus it would be easier to utilize leverage to resume some operations now. Think of it as setting the table for next year.

Disney Cruise Line announces three neew ships, to be built in Germany, with a passenger capacity similar to current ships: https://dse.news/releases/2019/10/30/disney-cruise-line-announces-three-new-ships/

Herschend Family Entertainment planning a new resort hotel near the existing DreamMore Resort. Local station WATE reports some salient facts: https://www.wate.com/news/local-news/plans-hint-at-dollywood-addition/?utm_medium=social&utm_source=facebook_WATE_6_On_Your_Side We can extrapolate from the WATE report and reach a few likely conclusions amd educated guesses as to the scope and direction of this project: This will be the long delayed follow-up to the DreamMore Resort. One clue is the street name leading to this area--Dollywood Resorts Way. Resorts, plural. Not singular. This Resort will be of similar size to the DreamMore which hosts 300 plus rooms and suites. Parking for 100 employees suggests a total workforce similar to DreamMore. Dollywood has experienced a bit of a rough patch in opening and operating the DreamMore. A management company, Gemstone Hotels & Resorts, opened the property and immediately was challenged by tough labor force issues. Wages offered for many key positions were far below par for similar positioned upscale hotels. Virtually the entire housekeeping staff has walked off, reportedly, on more than one occasion. Guest rooms are small, furnishings and design are at least a decade behind modern benchmarks, and food and beverage operations consistently have received poor reviews. In this challenging climate further Resort openings were delayed. Now catch-up time seems to have arrived. Perhaps the new offering will improve the collection of accomodations. Generally theme park resorts opt for a "good, better, best" strategy to capture the low, middle, high rate categories. Thus it is likely this hotel will be positioned as more, or less, luxurious than the DreamMore. Being located literally on higher ground we can bet it will be a more upscale property. Views and elevated location likely will comand higher rates. The 100 employee parking spots also offers clues to the level of service and luxury. Three star hotels generally employ eight staff per every ten guest rooms. Four star properties employ twelve staff per ten rooms. Thus employment would run 248 to 372 people. Divide the 100 employee parking spots across three shifts and we can guess employment at approximately 250 to 275 total workforce. About a three star plus property. Look for Dollywood parent company Herschend Family Entertainment to learn from mistakes in the design of DreamMore in areas such as furnishings, guest room size, handicap accessibality, guest room amenities, internet connectivity, improved corridor and public space ambience, and more efficient guest baggage handling and bell hop services. Or so it would seem.

https://www.bizjournals.com/kansascity/news/2019/10/30/cedar-fair-schlitterbahn-kck-park-option-expires.html

https://www.knoxnews.com/story/entertainment/2019/10/21/dollywood-pigeon-forge-2020-season-new-festival/4052754002/

Cedar Fair's refusal to comment suggests there is *something* to the Reuters report. If this were a totally false rumor and completely incorrect report Cedar Fair could rightly set the record straight. Now, today. Cedar Fair has chosen to refuse to comment. Thus we can be reasonably sure something is afoot. What we cannot know at this moment is *what* is afoot. The fact Cedar Fair has declined to repudiate the report unequivocally is telling. Perhaps, Cedar Fair has not yet received an offer, but expects to receive one soon. Perhaps, Cedar Fair plans to make an offer for Six Flags and is playing the beat the clock game. Reports of Six Flags personnel having been sighted at King's Island have surfaced online (the veracity of such reports are unknown). Six Flags is soon to be without a CEO as the current executive is scheduled to soon retire. Meanwhile, over at SeaWorld, turmoil continues in the executive suite. The former Carnival Cruise Line executive hired as Sea's CEO abruptly quit after less than a year. A revolving door seems to have been installed on the CEO's office. Cedar Fair spent nearly a decade without a significant acquisition--despite having always having driven growth via acquiring accretive properties. Rather, over the past decade Cedar Fair has disposed of three waterparks, closed a park, and demolished hundreds of hotel rooms. Suddenly, within two years, FUN has purchased two major waterparks, has an option to purchase a third Schlitterbahn property, acquired the Saw Mill Resort including a marina and golf course, are building two new hotels, an indoor sports facility is due to soon open, and other sports complexes are on the drawing board. FUN has reduced debt along the way but has also increased debt by fully financing recent acquisitions and, presumably, renovation and refreshment costs as well. Debt levels remain relatively high--possibly limiting exploiting some opportunities over the past eight years. The direction of Cedar Fair is difficult to predict. Recall, Matt Ouimet is still onboard, filling the role of growth and stregic executive. FUN stood still for near a decade. Perhaps they now plan to rollover. A partial combination could make sense for both chains--take small or underperforming parks from both chains and create a third company. Or FUN may be looking to shed some properties, or acquire some SIX parks. Understand that Thomas Cook Bankruptcy has placed several hotel/resort properties on the block. Merlin Entertainment is also under a merger deal, partially involving private equity, and they operate resort properties along with amusement parks and second gates. Additionally, private equity is making a move on Great Wolf Resorts, again. Lots of changes and a general shuffling seems to be underway in the entertainment business. Complex deals could be around the corner.

A new Zipline Coaster has opened at Paula Deen's Lumberjack Feud. Reported to be the first such combination zipline/coaster in the world: https://www.wbir.com/article/news/local/new-zipline-roller-coaster-opens-in-pigeon-forge/51-a09d7a83-4d0f-4cd4-96e7-1263eea5f075?fbclid=IwAR2sq7Iz8VUjPI9eR_EiVKRkuo9br9B3ZK_6SPQM0ueWfUldyxwuGeh0rNg

Clearer financial reporting and increased transparency removes obscurity and cloudiness surrounding performance of legacy parks. Reported growth is reported on a comparable basis, along with the overall increases due to the inclusion of the results of the Schlitterbahn acquisition. The news is good and offers clarity of improved performance by the legacy parks: "...(on a same park basis, excluding the Schlitterbahn parks) year-to-date preliminary net revenues totaled a record $1.08 billion, up $48 million, or 5%, on a 2%, or 465,000-visit, increase in attendance; a 2%, or $1.08, increase in in-park per capita spending; and a 5%, or $6 million, increase in out-of-park revenues." The overall results, including the Schlittrbahn revenues, improve the results further. Cedar Fair claims the Schlitterbahn Water Parks are contributing results ahead of forecasts. Presumably FUN has already taken steps to reduce costs and improve revenues at Schlitterbahn Resorts: "The year-over-year growth was driven by a 1.1 million-visit, or 6%, increase in attendance to 21.0 million guests; a 3%, or $1.24, increase in in-park per capita spending to $48.79; and a $10 million, or 9%, increase in out-of-park revenues to $130 million." All these results are to be tempered by the knowledge a significant number of operating days shifted into the reporting period. While FUN has improved the transparency of the reporting the company failed to provide guidance or a reminder in the release of the impacts of shifted operating days into this period. Perhaps next reporting period we shall enjoy more clarity on these issues. Cedar Fair has more room for improvement in reporting of revenues and attendance trends by fully accounting for such anomalies in the calendar. CEO Richard Zimmerman indicated a strong start to the season pass sales for next year, introduction of new PassPerks rewards program, and strong acceptance of special events is driving sales in a positive direction. https://ir.cedarfair.com/news/news-details/2019/Cedar-Fair-Reports-Record-Revenues-Through-Labor-Day-Weekend/default.aspx

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

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