Leland Wykoff

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/

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.

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/

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

Fee-Headrick Entertainment, operator of the Comedy Barn Theater, Hatfield and McCoys Dinner Show, Smoky Mountain Opry Theatre, Frizzle Chicken Cafe restaurant, and theater ticketing and sales outlets, in Pigeon Forge, Tennessee, has entered an agreement to be acquired by Dolly Parton associated World Choice Investments, operator of Dolly Parton's [Dixie] Stampeed, and other properties such as Piriate Shows in locations such as Myrtle Beach. https://www.wbir.com/article/news/local/4-pigeon-forge-theaters-could-soon-be-under-new-ownership/51-618120623 The deal is expected to close late this year. Sources report the sale will include the assets of the extensive show tickiting business and related assets such as wearhouse facilities associated with Fee-Headrick Entertainment operations. The news of the sale came as a surprise to employees of FHE. Industry watchers and observers had been expecting a shake up in the Pigeon Forge theater scene. WCI has struggled, for two years, as they have desperately tried to find the formula to make the former Lumberjack Feud successful, since its acquisition. The revamped show and theatre was announced as Dolly Parton's Lumberjack Adventure to muck fanfare. The Washington Post and other media outlets did major stories and puff pieces extolling the grand show, including the alleged multi-million dollar new sound system. Despite the strong Parton brand and major investments the show was a flop. Adjustments were made, the lumberjack theme was eliminated, and the theatre rebranded Dolly Parton's Smoky Mountain Adventure. The new production found much less audience than expected. Again, the theater name and show was revamped, and the production failed to produce the expected return. Currently operating as Dolly Parton's Celebration! dinner show the reviews and performance has been extremely disappointing. The local joke has become inquiring "if anyone knows the name of the show this week." Celebration! was slated to be replaced by Dolly Parton's Pirate Voyage Dinner Show imported from Myrtle Beach. This hasty announcement occured approximately 20 minutes prior to the scheduled announcement by FHE of the new Pirates Revenge Dinner Show to occupy a major Parkway frontage location. The close announcements suggested WCI was attempting to steal the thunder of FHE announcement. It seemed to underscored the difficulty WCI was having producing successful new shows. WCI appeared to be resorting to plugging-and-playing a proven show in lew of developing fresh new productions and products. The combination of five major theater shows is expected to create a juggernaut capable of marketing and capturing ticket sales for the evening time tourists are typically in the Pigeon Forge market. Independent operators are frightfully concerned. All of this shuffling could be a clue to other changes brewing in the theme park and tourist related entertainment industry. No doubt this is not the last of the realignments coming to the exhibitor/entertainment companies. Rather, this acquisition suggests a wave of realignments is about to be unleashed.

This article, and series, is instructive in understanding how theme park revenues are calculated by analysts: http://www.theparkdb.com/blog/the-business-of-theme-parks-part-i-how-much-money-do-they-make/ Likely some analysts use proprietary insights related to statistical relationships between other known data points and how they tend to track along with theme park revenues. Sort of like how Amazon can guess other books you may be interested in buying by tracking and mining data fields for relational relationships. Think along the lines as something as obvious as hotel occupancy and daily revenue rates, and seemingly unrelated markers such as sales of a specific brand of sun screen.

The Orange County Register has a rather interesting article today from behind the scenes of Knott's Scary Farm: https://www.ocregister.com/2018/09/25/knotts-scary-farm-has-1000-monsters-and-they-all-need-clothes/#nws=mcnewsletter

SeaWorld settles SEC complaint and agrees to pay $4 million in fines. Once again the SEC has entered into a settlement agreement which does not require the admission of guilt. Several academic studies have questioned the wisdom of such settlements. Shareholders harmed by the SeaWorld deception will not recover as a result of the settlement. Former CEO James Atchison will also provide funds of $1 million in settlement. http://www.sandiegouniontribune.com/business/tourism/sd-fi-seaworld-sec-settlement-20180918-story.html#nws=mcnewsletter

This is a very interesting read about the Disney and WED designer Rolly Crump--creator of Its A Small World exterior among other Disneyland features--and his view of the modern "Stroller park" of today. This story touches on design integrity, place making, visionary leadership, courage and convictions, along with insights into how some of the famous and lasting Disneyland features came to be. Worth the read. Enjoy! http://www.latimes.com/entertainment/herocomplex/la-et-ms-rolly-crump-20180907-story.html#nws=mcnewsletter

Cedar Fair parks are gaining quite the reputation for environmental issues. A few years ago it was Michigan's Adventure running afoul of sewage treatment permits, now Worlds of Fun and Oceans of Fun are having similar problems. This could become a public relations disaster if management fails to respond to address the underlying pollution and permit violations: http://amp.kansascity.com/news/local/article213690094.html

The Orlando Sentinel newspaper chimes in on the departure and management changes at SeaWorld: http://www.orlandosentinel.com/business/tourism/os-seaworld-joel-manby-follow-20180302-story.html

As far as news analysis goes, this whale from today's Washington Post is a killer. Joel Manby must be pining for the quite relatively sleepy days he enjoyed while CEO of Herschend Family Entertainment. This analysis places a harpoon directly into the thin skin of SeaWorld and the sudden departure of Manby and his troubled leadership: https://www.washingtonpost.com/news/animalia/wp/2018/02/27/seaworlds-ceo-promised-to-end-the-blackfish-fallout-he-didnt-and-just-resigned/?utm_term=.92489e07dc7a

This mornings news of Joel Manby's abrupt separation from SeaWorld came as a surprise to almost as many folks as his hasty departure from Herschend Family Entertainment to take over the reins as SeaWorld CEO three years ago. FUN shareholders can rest easy. Former Cedar Fair CEO Matt Ouimet is locked up in a rather long non-compete agreement under his employment agreement and would not be available for employment at SeaWorld: https://content.edgar-online.com/ExternalLink/EDGAR/0001193125-17-304136.html?hash=cde9ed3333c0e16b104885df518e384245ffe74fe7d2793ab0066ba33398a2ad&dest=D466011DEX102_HTM#D466011DEX102_HTM However, Matt Ouimet could very well play a central role in the future of SeaWorld and its various assets. When Ouimet stepped down as FUN CEO it was reported he would take on special projects, some of which would be related to seeking opportunities for Cedar Fair growth and acquisitions, including evaluating parks to join the FUN Family. This afternoon I contacted Cedar Fair to inquire a little deeper into Ouimet's non-compete and employment agreement, particularly his specific duties. A Cedar Fair official who could address my questions was reported to be traveling and unavailable at this time. I am expecting a call back at some unspecified future time. Ouimet is being well compensated in his new role. Cedar Fair must be expecting big returns from his efforts. Things could be getting FUN soon.

Dolly Parton has said, in an issued statement, it is her desire to expand the Stampede concept into other cities and markets. Orlando once had a Dixie Stampede until they suddenly sold the property to outlet mall developers. Perhaps other markets may mean Northern cities where the Dixie moniker would have limited sales value. Or perhaps Parton has designs on expanding into locations adjacent to other amusement parks not necessarily associated with Herschend Entertainment. Current SeaWorld CEO Joel Mamby (former CEO of Herschend Entertainment) has expressed a desire and business plan to monetize underutilized land at SeaWorld locations. Cedar Fair has likewise embarked upon an effort to develop businesses beyond the gate of there parks. The confederate flags were removed from the signage, promotions, commercials, and show productions many years ago. It has long become "Dixie" in name only. The flag images had been downplayed and removed and the show began to take on Western characteristics such as Buffaloes, wagon trains, and monument valley type backdrops. Gone were the ole white plantation sets of earlier years productions. The removal of the "Dixie" name has caused quite a stir on social media particularly in the East Tennessee region. It seems to be a major point of pride for many people. Which is a bit odd given most of the East Tennessee region, and especially Sevier County (Pigeon Forge, Gatlinburg, Sevierville), were predominantly on the side of the North in that unpleasant incident. The Rebel flag was a rarity in these here parts until about the 1960's.

A few items to note in this report. It is a very small hotel at only 130 rooms, and this is perplexing. Why is Cedar Fair not planning a larger facility? The Spring Hill Suits flag makes sense in this regard, as a year round hotel they will have stronger booking in the off seasons with a nationally flagged hotel chain and the strong reservations system such a franchise offers. The report also indicates a newly aligned private road will lead into the property. This suggests an easy sight and drive line to the hotel from the interstate. That the Spring Hill Suits building is identified as being located in North Carolina offers some tantalizing clues to its location and a strategy to maximize public support for this project from North Carolina along with minimizing the taxes associated with a large investment in South Carolina. Likely the parking lots, pool, and other facilities will be on the South Carolina side of the parcel which the report indicates straddles the state lines. The hotel may be built in such a way as to allow additional buildings or towers to join the complex as room revenues and occupancy grow. Much like how Breakers is growing with the addition of a new tower once occupancy and demand were established by the smaller room count of the renovated Breakers (recall Cedar Fair characterized that project as a "refreshment" rather than a rebuild). Marriott/Starwood has many brands and the final flag may not actually be settled upon until much later in the process. Carowinds may well determine another brand in the Marriott/Starwood stable will suite them better from an average daily revenue standpoint. At only 130 rooms, each head in a bed must generate significant revenues to meet the stringent return on investment demanded by Cedar Fair. The new CEO and other talent brought on board will be looking to expand at a more rapid pace the development of out of park revenues. Be watching for FUN to monetize adjacent properties to bring new revenues whilst leveraging the marking dollars, efforts, and know-how which brings folks on park. Second gate properties such as museum attractions, dinner shows, and the like are no doubt in the planning process. The just departed CEO Matt Ouimet was a hotel executive prior to his arrival at Cedar Fair. For whom one may wonder? Starwood Hotels and Resorts.

Excellent story: http://www.knoxnews.com/story/news/local/tennessee/2016/12/18/questions-linger-wildfire-alerts/95144318/ Much of the carnage of the Firestorm could have been moderated if effective Fire-Wise building codes had been in place along with Woodland Urban Interface Landscaping Rules. The Sevier County area has been very resistant to updating building codes to reflect modern safety concerns. We now see the costly results of such inaction and the effects of this Firestorm will linger for years.

Thank you, and hats off to, The Interpreter, for posting this thread. Many, many, lessons came from the Cedar Fair Merger Debacle. This battle literally changed the Merger and Acquisition world, players, and processes. The role social media played in enabling the stunning defeat of the abusive merger attempt and attending corporate governance improvements is quite difficult to accurately quantify. However, it remains beyond question the InfoBahn assisted immeasurably in organizing, educating, and fostering investor actions at every turn. Investors were enabled to grasp complex nuances of finance, governance, SEC filings, and motivations of the power players (which were not always apparent as great care had been taken to obscure and camouflage those conflicts and interests) while having meaningful conversations. Not being talked at by the company and hired public relations hacks; rather having key conversations, exchanges, and consultations within the investment communities was the critical element. By leveraging active knowledge bases--including KICentral--and other channels many investors could be reached and engaged with modest expense and a depth of targeting seldom ever possible previously. Small unitholders, regulators, institutional unitholders, and families holding significant shares, such as the Knott's, could be engaged. Traditional media also played important roles by broadcasting to wider audiences the non-sound-bite issues. We can be pleased flat and social media players came to the table and joined hands in ways it would have been difficult to foresee. So, again, I thank The Interpreter along with the many other active participants, commenters, readers, and visitors at KICentral.com. as well as comment sections of newspapers and blogs. Unitholders likely would have failed to prevail in the battles to reform and address corporate governance issues at Cedar Fair without you, your platforms, and the active participation broader social media enabled. I suggest this new thread could be improved by linking to the full archive of the original thread for those who may desire to engage in deeper study and analysis. Would you be so kind as to provide such a link?

View the new "theatrical" analyst presentation from CEO Joel Manby and SeaWorld Entertainment: http://www.seaworldinvestors.com/events-and-presentations/event-details/2015/Investor-Day-Webcast/default.aspx They announce plans to partner and add hotel space at undeveloped space at SeaWorld San Diego. This may not work out well. The Dollywood's DreamMore Resort developed under Mamby's leadership is truly a stunning disaster; poor room design, pitifully small outdoor pool which misses the mark of resort expectations, food and beverage offerings which are far below standards, and a management team and workforce which are not capable of delivering resort services, all combine to dash the guest experience into disappointment.

Also see news coverage from the San Diego Union Tribune for additional details: http://www.sandiegouniontribune.com/news/2015/nov/09/seaworld-san-diego-phase-out-killer-whale-show/

The New York Times reports: http://www.nytimes.com/2015/11/10/business/seaworld-san-diego-killer-whales-shamu-show.html?ref=business No doubt this is a concession to the California Coastal Commission ruling earlier which would restrict breeding at the Park. SeaWorld will thus free up substantial capital funds for other improvements at the park.

Please also see issues alleged at Worlds of Fun: http://www.KICentral.com/forums/index.php/topic/31465-worlds-of-fun-ocean-of-trouble/

Worlds of Fun parent Cedar Fair is being sued by an environmental group alleging various violations in the treatment and discharge of waste water: http://www.bizjournals.com/kansascity/news/2015/09/21/mce-worlds-of-fun-enviornmental-lawsuit.html Charges are of "significant and persistent violations" encompassing 58 instances over 60 months. No doubt the townships in Michigan will look at the activity in these allegations as they continue to pressure Michigan's Adventure to tap onto the public sewer.

A heart warming story of a nun who worked for Walter Knott as a teenager: http://www.ocregister.com/articles/knott-682925-berry-florence.html

The Townships desire to impose excessive cost structure of sewage treatment plant upon Michigan's Adventure. Privately run sewer treatment systems often exceed the clean water standards of the corresponding public systems. This is nothing more than an attempt to impose a tax upon Michigan's Adventure in support of political patronage jobs. Look under the hood of the public sewer system and one is likely to find excessive employee counts and overcompensation provided to those with political connections. Here in the South we refer to it as the CBEP. Cousin-Brother Employment Project.

LA Times sheds some light: "It now seems clear that a Six Flags contract with Rocky Mountain is likely preventing Knott's parent Cedar Fair from working with the coaster company." http://www.latimes.com/travel/themeparks/la-trb-joker-coaster-six-flags-discovery-kingdom-20150903-story.html