SIX FLAGS: After bankruptcy, what now

[BoddaH1994]

The deal ends a nearly yearlong Chapter 11 reorganization and cuts the company's debt from about $2.7 billion to about $1.15 billion. But the agreement also wipes out current shareholders, sending Six Flags stock down more than 50 percent.

http://www.reuters.c...E63R38T20100428

[bkroz]

Speed did not specify if growing the business included acquiring a competitor such as Cedar Fair (FUN.N) or finding a new owner for the company, which will have numerous hedge funds among its shareholders.

During testimony earlier this year, Speed said Six Flags had been approached by private equity group MidOcean Partners, real estate magnate Sam Zell, Providence Equity Partners, Apollo Management APOLO.UL and Far East International Holdings of Hong Kong.

Earlier this month the largest shareholder in Cedar Fair, Q Funding III of Fort Worth, Texas, said in a regulatory filing it had been approached by the Stark-led bondholders about merging the companies.

Cedar Fair owns 11 amusement parks.

Q Funding III did not immediately return a call for a comment.

I would be totally against the park becoming Six Flags Kings Island. But should Cedar Fair and Six Flag's parks be united under a common banner, I can honestly see a lot of good coming from it - DC Superheroes invading Action Zone, for one! But most importantly, any company that were to own both chains would undoubtedly and correctly see fit to close at least half of the parks - that means a lot of freed up money and a lot of freed up rides... Plus, many of the "issues" within Six Flags can be corrected by fusing them with Cedar Fair's policies, and vice versa. An emphasis on safety and cleanliness wouldn't kill Six Flags, nor would adopting Cedar Fair / Paramount's season pass system. And Cedar Fair would definitely benefit from Six Flags' attempts (I said attempts) at themeing... Look at Dark Knight Coaster's preshow, and even ride - not Universal or anything, but lightyears beyond anything we can expect from Cedar Fair alone.

I'm sure that's grossly oversimplified, but I don't get into the politics of it or anything. Just thinking out loud.

[Browntggrr]

After witnessing what SF did to GL and SW, I shutter to think what they would do with KI (or any other park that I enjoy).

But I will give them credit where it is due. SFGad is a great park.

[bkroz]

After witnessing what SF did to GL and SW, I shutter to think what they would do with KI (or any other park that I enjoy).

What Six Flags did to Geauga Lake honestly was full of good intention. They have done many awful things in parks. But to say that they hurt Geauga Lake in such an intentional way isn't necessarily true. Was the over-expansion a terrible decision whose negative consequences probably could've been anticipated with a little foresight? Yes. But to be fair, be it Six Flags, Busch Entertainment, Premier Parks, Cedar Fair, or otherwise, I highly highly doubt that there would still be orcas in Ohio in 2010...

And, had Six Flags' expansion not occurred, Cedar Fair probably wouldn't have picked up the park (what would they want with a mid-sized family park in northeast Ohio?) - that is, no Firehawk, no Planet Snoopy (at Cedar Point), no Dominator, no Thunderhawk, no Voodoo, no Carolina Cobra, no Firefall, no Americana, no El Dorado, etc.

Personally and emotionally, the loss of those parks is devastating. Logically, it was bound to happen due to the size. Six Flags certainly didn't expand to the park with intention to run it into the ground. It was simply a side effect of a management era past (thank God), poor advanced planning, and mismanagement. I think there are many who believe that, had Cedar Fair not purchased the Paramount Parks, Geauga Lake would still be open today. Who knows? What happened to the park can be blamed on many groups - Six Flags may be one of the biggest, but is far from the only, in my opinion.

At the very least, it would be interesting to see Six Flags come into the same park chain as Wildwater Kingdom, and to imagine their absolute terror at what their once-loved "pet project" had become... Imagine if you built this and came back only a half-decade later to find this.... Ouch, right?

[Browntggrr]

^ Way to many "what if's". We could go on for years about the different scerarios of what "could have been".

Would SW still be in Ohio? Perhaps. There was no indication that SW was not doing well, or, were looking to sell prior to the SF purchase.

If SF would have put in a half-hearted effort into their grand expansion, I would feel different. It was depressing to see what became of SW after SF took over.

Planning has not been a strong suit for SF.

Did they intend for it to happen? No.

But it did....

[bkroz]

Too true. If I'm correct (which I may not be), it was SeaWorld who originally acted to purchase the neighboring Six Flags Ohio... Because the county line runs down the center of the lake, and the county in which SeaWorld resided was unable to build structures above a certain height, and therefore unable to fall into the line of SeaWorld parks that were adding roller coasters (Steel Eel, Great White, Kraken, etc).

One can only imagine what would've happened if that deal went through... Yet another "what if," I know, but a good one - perhaps today, that SeaWorld Park would have all of the fantastic coasters there before Six Flags' expansion, and maybe some other gems - Journey to Atlantis? Kraken? Manta? It's almost painful not knowing what could've been.

I'm certainly hoping for alternate universes where every possible scenario ever considered is alive - perhaps in that world, Ohio is still home to four flagships from four incredible park owners - or more. Instead of two parks owned by one company...

[Browntggrr]

I have heard those same rumblings, but have not seen any other *proof* to back up those comments (i.e. park official comment, newspaper article etc.)

Although, I do have a difficult time believing that the Aurora government would not allow special considerations if asked.

[PhantomTheater]

^Aurora was asked, repeatedly and they refused to budge to either SW or SF. Bainbridge had a strict height limit of 180 ft (SV and Skyscraper). Solon was no help either, SF asked all three communities if the park could fund the widening of Oh 43 and all denied the request. Even now, neither have interest in trying to save the Dipper, all they are concerned about are the residents who disliked the park. The combined brilliance of Aurora and Bainbridge has them left looking at a decaying park. A sad sight for all who drive down Aurora Rd.

[Browntggrr]

http://www.conwaygreene.com/aurora/lpext.dll/Aurora/68?fn=document-frame.htm&f=templates&2.0

I have scanned through this numerous times, and still cannot find a height ordinance for commercial structures.

But it also is not the easiest read either.

[Delirium_Guy]

Too true. If I'm correct (which I may not be), it was SeaWorld who originally acted to purchase the neighboring Six Flags Ohio... Because the county line runs down the center of the lake, and the county in which SeaWorld resided was unable to build structures above a certain height, and therefore unable to fall into the line of SeaWorld parks that were adding roller coasters (Steel Eel, Great White, Kraken, etc).

That is incorrect. I have been able to get a bit of history regarding SeaWorld Ohio through work. While the Park was successful and popular, it unfortunately was an extremely expensive operation....more so than the other two SW Parks. A lot of this had to do with the costs they took on transporting animals back and forth during the winter months. It was Busch that was looking to sell the park and pull out of Ohio. I was quite surprised to see how many people from the Ohio park became transplants in Orlando...many are still with the company.

- Todd

[bkroz]

Too true. If I'm correct (which I may not be), it was SeaWorld who originally acted to purchase the neighboring Six Flags Ohio... Because the county line runs down the center of the lake, and the county in which SeaWorld resided was unable to build structures above a certain height, and therefore unable to fall into the line of SeaWorld parks that were adding roller coasters (Steel Eel, Great White, Kraken, etc).

That is incorrect. I have been able to get a bit of history regarding SeaWorld Ohio through work. While the Park was successful and popular, it unfortunately was an extremely expensive operation....more so than the other two SW Parks. A lot of this had to do with the costs they took on transporting animals back and forth during the winter months. It was Busch that was looking to sell the park and pull out of Ohio. I was quite surprised to see how many people from the Ohio park became transplants in Orlando...many are still with the company.

- Todd

Well, while we don't know the cause of the closure, I absolutely believe that most still work in Orlando - the Busch parks are probably the best in most regards - entertainment, operations, theme, guest services, involved and genuine employees, landscaping... It's no surprise to me that they'd find a place for each and every worker who wanted to stay with the company after SeaWorld's sale - and what happened to all those people who worked at Geauga Lake when it was closed?

[Coasterfun]

Too true. If I'm correct (which I may not be), it was SeaWorld who originally acted to purchase the neighboring Six Flags Ohio... Because the county line runs down the center of the lake, and the county in which SeaWorld resided was unable to build structures above a certain height, and therefore unable to fall into the line of SeaWorld parks that were adding roller coasters (Steel Eel, Great White, Kraken, etc).

That is incorrect. I have been able to get a bit of history regarding SeaWorld Ohio through work. While the Park was successful and popular, it unfortunately was an extremely expensive operation....more so than the other two SW Parks. A lot of this had to do with the costs they took on transporting animals back and forth during the winter months. It was Busch that was looking to sell the park and pull out of Ohio. I was quite surprised to see how many people from the Ohio park became transplants in Orlando...many are still with the company.

- Todd

Thank you. I have always wondered if that was true. After visiting both Busch Gardens and SeaWorld Orlando I'm sorry I didn't visit the Cleveland park more than once.

[CoastersRZ]

http://amlawdaily.typepad.com/amlawdaily/2010/04/six-flags-bankruptcy-ride-over.html

Check out some of those attorney fees that have racked up in settling this bankruptcy!

[bkroz]

Shapiro stays, Snyder out.

http://www.telegram.com/article/20100502/NEWS/5020635/1002/BUSINESS

[The Interpreter]

Six Flags has emerged from bankruptcy. Some will find this ominous:

...At the court hearing to confirm the company's bankruptcy plan, Speed would not tip his hand regarding acquisitions to expand.

One likely target could be Cedar Fair LP (FUN.N), a Sandusky, Ohio, operator of 11 theme parks and seven water parks. Apollo Management recently dropped its $635 million planned takeover of Cedar Fair, a bid that was opposed by Q Funding III LP, Cedar Fair's biggest shareholder.

Q Funding, which is fighting to reshape Cedar Fair's board, has said in regulatory filings that the bondholders who now own Six Flags had approached them about merging the two theme park operators.

Q Funding and Six Flags did not immediately return a call for comment....

http://www.reuters.com/article/idUSTRE6422RF20100503

[coaster_junky]

wow, you'd think they would wait a little while before trying to do something like that, especially after just exiting a bankruptcy.

edit: glad to have you back terp.

[The Interpreter]

Ah, but that would depend on what Q is up to, wouldn't it?

[coaster_junky]

^i honestly have no idea , i was just going by, if i, for example, finally was done owing money, i wouldn't want to jump right back into owing money.

[The Interpreter]

Emerging from bankruptcy does not mean you do not still owe money. It, in this case, means you, as Six Flags, owe much less money. And just because Q may want something (which it may not) does not necessarily mean that unit holders and/or the Government would allow such. Apollo learned something like that recently...and went on to buy Hardee's instead.

[coaster_junky]

ah... i see, i think, that makes more sense to me now, than it did a little while ago.

[The Interpreter]

The official press release:

NEW YORK, May 3, 2010

NEW YORK, May 3, 2010 -- Six Flags Entertainment Corporation (formerly Six Flags, Inc.) announced today that it has completed its balance sheet restructuring and emerged from Chapter 11. The terms of the restructuring were confirmed by the Court effective as of April 30, 2010.

The restructuring reduced Six Flags Entertainment's indebtedness and mandatorily redeemable preferred stock from approximately $2.7 billion at December 31, 2009 to approximately $1.0 billion at emergence (excluding seasonal drawings under the company's revolving credit facility at emergence). As a result, the Company's annual cash interest expense will be significantly reduced to approximately $75 million. The restructuring also included $725 million in new equity committed by the new shareholders. The plan also provides for payment in full of all of the Company's trade creditors.

"This reorganization constitutes the final step in the repositioning of Six Flags," stated Mark Shapiro, President and CEO of Six Flags Entertainment. "Since the new management team arrived in 2006, we have concentrated on broadening our audience base by improving the product offering. In that vein, we instituted significant operational changes – upgrading and investing in the appearance and cleanliness of the parks; creating a more diversified family entertainment experience; growing in-park revenue by increasing length of stay and offering guests high quality brands; elevating guest service through targeted staffing initiatives; and growing sponsorship and licensing revenues."

Mr. Shapiro continued, "Now, with the restructuring completed, the Company's opportunities are no longer limited by the legacy debt levels. With our new balance sheet, we now have the financial strength to generate long-term sustainable growth while continuing to enhance the reputation and reach of our brand."

Coupled with the equity investment, the restructuring was financed by approximately $1.0 billion of senior secured credit facilities, and a $120 million revolving credit facility. In addition, an affiliate of Time Warner agreed to provide the Company with a $150 million multi-draw term loan facility to be used to fund annual Partnership Park put obligations above specified levels.

Application will be made to list the new common stock of Six Flags Entertainment on the New York Stock Exchange.

About Six Flags:

Six Flags Entertainment Corporation is a publicly-traded corporation headquartered in New York City and is the world's largest regional theme park company with 19 parks across the United States, Mexico and Canada.

SOURCE Six Flags Entertainment Corporation

Note:

* The new name.

* The absence of one park in the slug line...only one park was closed during the bankruptcy proceedings...and it was located in Kentucky.

[PREMiERdrum]

Six Flags Entertainment Corporation (formerly Six Flags, Inc.) announced today that it has completed its balance sheet restructuring and emerged from Chapter 11. The terms of the restructuring were confirmed by the Court effective as of April 30, 2010.

Strange that SF also went with... "entertainment corporation" for their name. Leaving the possibility of "Cedar Flags Entertainment Corporation?"

(Yes, I know CFEC is actually "Company," not "Corporation." It's just funny how similar they are)

[The Interpreter]

Strange that the first sentence of your post ends with a Q.

Coincidence?

[bkroz]

Cedar Flags? Try Six Fairs (or, twenty-six, as it were)... Much more appropriate considering our current CEO's view of his parks as "dressed up carnivals."

[The Interpreter]

Something tells me that leader would get to join Dan Snyder...with a season's pass but no board seat before it was over. . .

[coaster_junky]

:facepalm: it wasn't until i read "six fairs" that i put the connection in the quote by that ceo and the name of his company.

[bkroz]

Well I'm sure Mr. Kinzel would be more than happy to get only a season pass (and a nice $20,000,000 farewell) for his time. After all, he's just an operations guy!

[The Interpreter]

Mr. Snyder was not quite that lucky. He, like other Six Flags shareholders, lost his equity interest, and his golden parachute, though golden, was not quite that rich. Assuming, of course, he does not face certain actions in the future for what many allege was self-dealing with the likes of his Red Zone companies, Dick Clark Productions, Johnny Rockets, etc. Twill be interesting to see how those deals fare in the future.

Among other equity holders who were wiped out was Bill Gates...

[TH13TEEN]

I still find it amusing that "Q", is so set on merging theses two amusment giants.

[The Interpreter]

I am not sure that is the case. I think Q intends to keep current Cedar Fair management guessing as to what its intentions are for as long as it possibly can. I suspect it thinks that by doing so it can best motivate Mr. Kinzel and Co. to do what is necessary to maximize unit holder value in both the short and longer terms. One thing is very likely...were it not for Q, we'd likely now be finding out what Apollo's true intentions were...and I doubt they, in the long run, would have been good for the parks. For instructive comparisons, watch Hardee's now...which Apollo has gone on to purchase...