Great America Sale Cancelled

[bkroz]

http://www.cedarfair...ry&story_id=332

Cedar Fair TO RETAIN OWNERSHIP OF ITS CALIFORNIA'S GREAT AMERICA PARK

• Valuable property expected to remain strong performer for Cedar Fair going forward
  
• Company reaches agreement with the San Francisco 49ers on parking and construction issues
  
• Expects to achieve high end of its annual distribution target of $1.35 to $1.65 per unit in 2012, and $2.00 or more in 2013
  

SANDUSKY, OHIO, December 6, 2011 –Cedar Fair Entertainment Company (NYSE: FUN), a leader in regional amusement parks, water parks and active entertainment announced today that JMA Ventures, LLC (“JMA”) has elected to not move forward with their purchase of California’s Great America amusement park in Santa Clara, California. As a result of JMA’s actions, the definitive purchase agreement governing this transaction, originally agreed on September 16, 2011, has been terminated.

“We respect JMA’s decision and are pleased to return to the long-term ownership of this exceptional property,” said Matt Ouimet, Cedar Fair’s president. “As we stated at the time the agreement was made, this is a quality park that has terrific employees and serves a strong market. We look forward to continuing to take advantage of the synergies which are uniquely available to us as a result of operating this park as part of our larger portfolio of properties.”

According to Ouimet, the termination of this sale does not alter the Company’s expectations of achieving record adjusted EBITDA between $365 million and $375 million in 2011. “In fact, we expect to be at the higher end of our original distribution guidance of $1.35 to $1.65 per limited partner unit in 2012,” he said. “With continued growth in our annual distribution rates and additional debt reduction through our improved operating performance, we believe Cedar Fair will maintain its position as one of the most attractive growth and yield stories in the leisure and hospitality industry.”

The Company also announced that it has reached a long-term agreement with the San Francisco 49ers related to the construction of the stadium and parking for NFL and other stadium-related events for the life of the new stadium. The agreement is still subject to the execution of a definitive agreement and the approval of the Stadium Authority and related approvals from the City of Santa Clara.

“The combination of an NFL stadium and a premier amusement park in one location offers tremendous and exciting opportunities for family entertainment. We are excited to reach an agreement on construction issues and parking that are important to the stadium project,” said Jed York, president and chief executive officer of the San Francisco 49ers.

“This arrangement leads the way to a mutually beneficial relationship between Cedar Fair, the 49ers and the City of Santa Clara,” added Ouimet. “California’s Great America was a strong performer in 2011 and we are confident this will continue into the future as we build the park’s customer base through new marketing initiatives and capital investments.”

Remember when the deal with Apollo fell through, then every word from Sandusky was that they were very excited about the opportunity to continue running Cedar Fair as a public company, as though their intention all along had been to cancel the deal. Now another deal falls through and we hear how very excited and optimistic they are to continue to operate this "strong performing" park.

It's like, shouldn't those in power at Great America (not to mention its loyal visitors and fans) feel pretty burned they tried desperately to unload the park, then failed, and are now pretending they're all cool? Shareholders felt pretty burned when every member of the "oligarchical" board voted for the privitizing of the company, only to then fall back and act like they were excited to keep it public.

So it appears the 2012 season will be another for Great America under Cedar Fair's rule, and with no new attractions yet again. If a new stadium were built, I really do think it would improve visitor-ship at the park - if families know they're heading to the stadium at night, may as well get an early parking spot and spend the day at Great America with their season passes, right? But with no investment for another year, it's a shame...

And then I think of Geauga Lake.

"What happened here to dim the lights of Hollywood's brightest showplace is about to unfold once again. But this time, it's happening to you."

[diamondhawk]

That's all I need to say.

[The Interpreter]

I beg to differ. The proposed sale gave Cedar Fair the leverage it needed to force a deal with the football team and City. It made it clear that Cedar Fair was willing to walk, could walk and would in fact walk. This has Mr. Ouimet's fingerprints all over it. Brilliant, simply brilliant. Well played, sir. From one hard nosed negotiator to another.

[bkroz]

http://www.mercurynews.com/bay-area-news/ci_19482474

"We have a proven operator," Matthews said, "who knows how to operate a theme park. And we're excited about this synergy, which is no longer adversarial."

Matthews said he's also thrilled to hear that Cedar Fair Entertainment plans to "make major investments" in the park, including a new waterslide attraction and roller coaster.

[The Interpreter]

Of course the proven operator has tons of theme park experience, even if his tenure at Cedar Fair is relatively short. And he's a finance guy, too.

The FUN is changing before your very eyes.

Who said all that? Terp did. And he stands by his story.

[westcoaster]

so it's staying now, wow, sure hope they get some new stuff, wonder if they will keep managing gilroy.

Now Cedar Fair / stepped up to the plate and kept the park? Could the rename it like a Knotts north with some new attractions.

Or Knotts that is very popular with 3 water parks and of course the farm, would this help???

[Leland Wykoff]

The Interpreter gets it right; Matt Ouimet's fingerprints are all over this transaction. See this paragraph from insidebayarea.com:

"Santa Clara officials indicated Cedar Fair's new president, Matt Ouiment, a former top Disney executive, was determined parking concerns would be addressed. The 49ers released a statement praising the Ohio-based company's decision to retain control of the park."

Full story here: http://www.insidebayarea.com/news/ci_19482475

Keep in mind Great America Park was reported by Cedar Fair to be one of the top performing parks last quarter. This could be due to many factors. Consider many people may have visited Great America due to the impending sale--kind of a "best visit now before it is gone" situation. The parks finances were no doubt helped by the significant write-down which Cedar Fair took on the asset.

Significant modifications and or improvements to the park may very well take place during the disruption which will be caused by stadium and parking construction. Recall Ouimet oversaw the rehabilitation of Disneyland on a tight schedule for it's 50 anniversary.

Once again Cedar Fair is quiet concerning the Gilroy Gardens management contract. The only news we have is what is leaking out around the edges.

Developments will be interesting to watch.

[kingsrattler]

Of course the proven operator has tons of theme park experience, even if his tenure at Cedar Fair is relatively short. And he's a finance guy, too.

The FUN is changing before your very eyes.

Who said all that? Terp did. And he stands by his story.

I couldn't agree more with this. The biggest thing the future CEO brings is finance experience in the amusement park industry. Something that past CEO's have lacked. I perceive a future CEO who is not going to delve so much in the day to day operations, but will be bigger picture guy, a vast difference from the current situation.

Not to say one completely benefits over the other, I for one, am young in my years of experience to make a judgement. But I can't help to be excited to see a different model being used at one of my favorite park chains.

[KIfan1980]

From the thread when the sale was announced:

Chalk this bit of financial wisdom up to our new President and CEO, in waiting, Matt Ouimet.

From the thread when the sale was cancelled:

The Interpreter gets it right; Matt Ouimet's fingerprints are all over this transaction.

I wonder sometimes if we are too quick to give credit and/or too quick to place blame when we learn about things happening with CF.

I am hopeful that the powers that be at CF did all the necessary due diligence on the deal and determined that it was in the best interest of FUN to move forward with CGA as part of the parks portfolio and then decided to work in partnership with the 49ers and Santa Clara on a solution for issues including parking. That said, you'd have thought this due diligence would have been completed prior to deciding to sell the asset - this is the area where I'd question the leadership at FUN as I'd think it better to never announce a deal than announce and then cancel (twice now).

[WOF Guy]

IIRC, the 49ers owner was a partial backer of JMA's tenative purchase of CGA. I imagine the 49ers owner wasn't to eager to put up said capital or having an interest in the park.

I suspect the 49ers sought an agreement with CF and when it was obtained pulled their funding from the deal. Without the funding JMA cancelled the purchase.

[Leland Wykoff]

Cedar Fair did not receive a break-up fee from JMA Ventures LLC to walk-away from the deal. This suggests either one or more parties were sure of one of two things: 1) the transaction would close, or 2) the transaction would never close.

If the parties were certain the transaction would never close (and thus did not require a break-up fee) it may indicate the deal was a tactic to bring reluctant parties to the negotiating table. Reluctant parties could have been Santa Clara, the NFL, the 49ers, or, of course, the Cedar Fair Board, or CEO Mr. Kinzel.

If the parties were certain the transaction would close the absence of a break-up fee is odd. There would be nothing to loose for either party to include such a fee if completion of the deal was certain.

Given the timing of the public hearings concerning the stadium funding it seems likely this was a cleaver maneuver to gain concessions or agreements which had otherwise eluded Cedar Fair.

Cedar Fair confirmed it will "continue to manage Gilroy Gardens under our management contract."

Again, it seems The Interpreter got it right; hats off to Mr. Ouimet for a negotiated resolution.

[mccarthysnerd]

Great played move by Mr Ouimet.

[CoasterGeek101]

Its a nice little park, but I think Cedar Fair can make it a really high thrill park if they just put money into it.

[Browntggrr]

Funding questions resurface for San Francisco 49ers stadium after board yanks $30 million but should not halt construction.

http://www.mercuryne...-after?tw_p=twt

[TheCrypt]

Speaking of, how is Great America's woody coming along? I've heard zero news articles about it since the press release.

[thekidd33]

The site is just dirt and survey marker's at the moment, vertical construction is supposed to begin in August, though there is some wood for the coaster in the parking lot.

[Browntggrr]

Now, the 49ers are suing Santa Clara:

http://blog.sfgate.com/cityinsider/2012/06/28/49ers-go-to-court-over-santa-clara-countys-30-million-cash-grab/

[BB1]

What people do for football, it shocks me. Anyway to the main topic im glad its still with the Cedar Fair company, it means the their Boomerang Bay will stay (hopefully) for the time being. Making BB1's trip to Boomerang Bay possible!

[Gordon Bombay]

^It's not just football, it's all the additional revenue and economic development sports teams and their facilities can bring in. A lot of pro sports teams have this potential, but football especially. Look how hard other cities have fought to keep their teams and in the case of the 49ers it seems they were staying in the area and just a matter of who wants them in their specific city.