Six Flags and Cedar Fair Merge

[Leland Wykoff]

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.

 

 

[purdude86]

3 hours ago, Hoeter said:

I see several parks getting sold - ones in close proximity to one another.

NJFTP/Dorney and Knotts/SFMM immediately come to mind.

I strongly wish that Herschend approaches Cedar Fair to buy Kings Island.

Would Herschend want to buy Kings Island with having acquired Kentucky Kingdom though? Or do you think they would acquire KI and run both or potentially try to sell off KK soon after?

Of the Cedar Fair chains I'd most want to see them take would be Knott's. If the new company doesn't want both Knott's and Magic Mountain with their proximity, I wouldn't mind seeing Herschend take Knott's as it would fit in well with their theming style. The only downside is they don't really do scary Halloween, so that would like result in the loss of Knott's Scary Farm which would be a shame since it was the original Halloween park event.

[BoddaH1994]

6 minutes ago, RollerColt said:

This is directed at me, and I get it. I was the one who called this a monopoly and that's not the correct term for it. 

I don't really care about the competition between parks, because as you say they're regional. 

What I do care about is large corporations caring only about profit and not the consumers. 

These two chains were already owned by large corporations. So I don’t think that’s gonna change much from that aspect. They were always at the mercy of their share/unit holders. This argument would work if Six Flags bought Dollywood, but the corporate governance of SIX and FUN isn’t changing all that much. Will this be good or bad? Who knows, but this certainly isn’t a case of Walmart coming to town and running everyone out of business. It’s more like if Walmart and Target merged, but they kept being Target and Walmart (if that makes sense).

23 minutes ago, TheRickster said:

The company is going to be too big for the voice in the room that wants to run a theme park like a theme park. The boat is too big to be steered in the right direction now. Comparing FUN to SIX stock and shareholders is even very different. 

You could have made that argument when FUN bought Paramount, but that was a net positive, I think. I wish you would clarify about “righting the ship.” What do you think is too far gone to be fixed at this point?

[Orion742]

Don’t know if this is true or not but someone told me that the park names would stay the same. I hope that is true. I couldn’t stand Six Flags Mason Ohio. If Cedar Fair knows what they are doing then I think they will go well. Cedar Fair seems to be in charge after the deal. Most of their executives are at the top. 

I just hope that Banshee doesn’t become Batman the ride and Orion become Superman the ride. If that happens I am personally calling Hershend to save us.
 

[RollerColt]

2 minutes ago, BoddaH1994 said:

These two chains were already owned by large corporations. So I don’t think that’s gonna change much from that aspect. They were always at the mercy of their share/unit holders. This argument would work if Six Flags bought Dollywood, but the corporate governance of SIX and FUN isn’t changing all that much. Will this be good or bad? Who knows, but this certainly isn’t a case of Walmart coming to town and running everyone out of business. It’s more like if Walmart and Target merged, but they kept being Target and Walmart (if that makes sense).

You could have made that argument when FUN bought Paramount, but that was a net positive, I think. I wish you would clarify about “righting the ship.” What do you think is too far gone to be fixed at this point?

As always, you school me with logic and reasoning Bodda!

[disco2000]

2 minutes ago, Orion742 said:

Don’t know if this is true or not but someone told me that the park names would stay the same. I hope that is true. I couldn’t stand Six Flags Mason Ohio. If Cedar Fair knows what they are doing then I think they will go well. Cedar Fair seems to be in charge after the deal. Most of their executives are at the top. 

I just hope that Banshee doesn’t become Batman the ride and Orion become Superman the ride. If that happens I am personally calling Hershend to save us.
 

Would it be ok if they slapped sponsor stickers on the rides but kept the ride names the same.  

Like K-Mart on Orion trains.

[Tr0y]

3 minutes ago, purdude86 said:

Would Herschend want to buy Kings Island with having acquired Kentucky Kingdom though? Or do you think they would acquire KI and run both or potentially try to sell off KK soon after?

Of the Cedar Fair chains I'd most want to see them take would be Knott's. If the new company doesn't want both Knott's and Magic Mountain with their proximity, I wouldn't mind seeing Herschend take Knott's as it would fit in well with their theming style. The only downside is they don't really do scary Halloween, so that would like result in the loss of Knott's Scary Farm which would be a shame since it was the original Halloween park event.

We can only hope. I wouldn’t throw out the possibility of SEAS either. 

[RollerColt]

32 minutes ago, beastfan11 said:

Great points. I certainly hope they can do this the right way.
 

But regardless of what direction the legacy CF parks go, the association with Six Flags could potentially be damaging. They could make every right decision, but for many the Six Flags name alone is enough for people to walk away. Example? Ironically enough I made a joke about Six Flags last week in front of my mom who more or less said, “I’m glad we have KI close because those Six Flag parks are dirty.” 
 

Mind you, she doesn’t know anything of the industry. She’s not an enthusiast (even though she used to drop me off at the park all the time when I was younger. Thanks mom!) 

But that’s the cultural attitude a lot of people have of the Six Flags brand. And that would be a big concern if I were one of the overpaid fat cats driving this bus. 

Just talked to my wife about this during our breaks. She's in no shape a fan of roller coasters or amusement parks. But when I told her the news she immediately said "well I guess we probably won't be going to Kings Island in the future if Six Flags is involved". 

[Leland Wykoff]

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.

[Tr0y]

6 minutes ago, Orion742 said:

Don’t know if this is true or not but someone told me that the park names would stay the same. I hope that is true. I couldn’t stand Six Flags Mason Ohio. If Cedar Fair knows what they are doing then I think they will go well. Cedar Fair seems to be in charge after the deal. Most of their executives are at the top. 

I just hope that Banshee doesn’t become Batman the ride and Orion become Superman the ride. If that happens I am personally calling Hershend to save us.
 

I would not be surprised if Action Zone gets rethemed to DC Universe. Since that’s the area most guest believe there needs to be a theming change.

Be careful what you wish for, we begged and wished for a giga coaster. Look what that got us.

[BoddaH1994]

7 minutes ago, Leland Wykoff said:

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.

They said something about how the C Corp would have some sort of tax advantage in the call. I don’t want to talk out of turn because I don’t know tax law, but I wanted to throw that out there.

13 minutes ago, RollerColt said:

As always, you school me with logic and reasoning Bodda!

Not trying to school ya! I bet most people think the way you did. 

 

 

[Orion742]

23 minutes ago, Tr0y said:

I would not be surprised if Action Zone gets rethemed to DC Universe. Since that’s the area most guest believe there needs to be a theming change.

Be careful what you wish for, we begged and wished for a giga coaster. Look what that got us.

Hey it wasn’t me lol I didn’t wish for a giga. Even thought it was a nice addition.

[rhyano]

I certainly was not expecting this, anyways the next 12-24 months are going to be very interesting looking at potential parks sold or even closed, I surly don't see all 40 some parks in one chain, that's just doesn't seem feasible. I think right away I'm thinking about the person that has Dorney Park or Six Flags America as their home park. 

[Oldiesmann]

As I said in the speculation topic about this last night, this will make the equivalent of a Platinum Pass much more valuable, not just because it gives you access to far more parks, but also because of the proximity to some FUN and SIX parks:

Dorney is within 5 hours of four different Six Flags parks (Great Adventure, America, Darien Lake and New England)
Worlds of Fun and Six Flags St Louis are 4 hours apart
Carowinds and SIx Flags Over Georgia are also 4 hours apart
Darien Lake is 2½ hours from Canada's Wonderland (though of course that time depends largely on how long it takes to get across the border)
Knott's and Magic Mountain are an hour apart

It will be quite interesting to see which parts of each chain are kept when all is said and done. Hopefully this ends up being a win for everyone involved, especially with Zimmerman remaining in charge.

[disco2000]

Does anyone remember the state of the park the final years of the Paramount years....

[SonofBaconator]

Red is Six Flags

Yellow is Cedar Fair

From this map, you get a really good look at where things might go from here once things get finalized. There is certainly a lot of overlap in California, the Mid-Atlantic/East Coast, and even the Northeast.
 

Some parks I think could coexist like Magic Mountain and Knott’s. Discovery Kingdom will eventually be the only park in the Bay Area once CGA’s lease is up. Then you have Dorney and Great Adventure in the NYC/Jersey/Philly market that seems to overlap as well as Six Flags America and Kings Dominion overlapping in the Maryland/Virginia market. One can make the assumption that Six Flags America might be liquidated and Dorney could potentially be sold off down the road.

[Orion742]

14 minutes ago, rhyano said:

I certainly was not expecting this, anyways the next 12-24 months are going to be very interesting looking at potential parks sold or even closed, I surly don't see all 40 some parks in one chain, that's just doesn't seem feasible. I think right away I'm thinking about the person that has Dorney Park or Six Flags America as their home park. 

I’d be wayyyy more worried about Six Flags America. Clearly CF has plans with Iron Menace next year. Personally, besides CGA I think all the CF parks will be fine.

[DeLorean Rider]

Today I have been confronted with just how much of a theme park snob I actually am. I didn't realize how much of a negative bias I have against Six Flags until the words "Six Flags Kings Island" started bouncing around in my head. It has been quite the rude awakening. 

[cdubbs727]

Ugh, This is gross. Six Flags is the McDonald's/WalMart of theme parks, a brand known for being cheap and shoddy. I know it's a "merger of equals" (barely), but I really think it just ends up hurting the existing Cedar Fair parks. I don't want everything to get a consistent look and feel -- I want our local parks to retain their unique style and charm. I don't want constant off-the-shelf roller coasters; I want years where the parks continue to invest in the look and feel of the park and celebrate their history. I want a visit to Kings Island to feel special, not like I'm just going to any other run-of-the-mill park. And while we can hope there's good input from CF on this, I worry that this many parks just spreads them too thin and the parks don't get the love and care they deserve. 

Best-case scenario is another chain -- but a good one -- buys Kings Island. But who? I haven't been to the Hershey park; is it good? Universal is dipping its toes in smaller regional things in Texas and Vegas, but this seems a bit too much for them. 

I just have a bad feeling. 

[cincyredsfan72]

Here is a good read from a familiar face who we all miss.

[TheRickster]

1 hour ago, BoddaH1994 said:

These two chains were already owned by large corporations. So I don’t think that’s gonna change much from that aspect. They were always at the mercy of their share/unit holders. This argument would work if Six Flags bought Dollywood, but the corporate governance of SIX and FUN isn’t changing all that much. Will this be good or bad? Who knows, but this certainly isn’t a case of Walmart coming to town and running everyone out of business. It’s more like if Walmart and Target merged, but they kept being Target and Walmart (if that makes sense).

You could have made that argument when FUN bought Paramount, but that was a net positive, I think. I wish you would clarify about “righting the ship.” What do you think is too far gone to be fixed at this point?

FUN isn't near the size of SIX though. The company culture is extremley different and SIX has shown again and again to bend to cheapening out while Cedar Fair has leaned into a more low and slow routine.

The main issue I have is Six Flags has a horrible public image. As others have even commented already in this thread, non-amusement park people usually have nothing positive to say about Six Flags. Ask your friends from St Louis and Rochester etc if they like Theme parks and the opinions they'll have are often horrible, because SF has damaged the image of the entire industry across the nation.

If the board was 7v5 I'd be more optimistic, but being equal between sides and with SIX having so much more outside industry influence through the years it brings, I'm just concerned the current direction of CF will be hard to maintain over "just cut everything to maximize bonuses and the 10k. Also that from the statement the Cedar Fair name will be dissolved and the company will take on Six Flags. That just seems entirely tone deaf to public knowledge. But at the market level, hardly anyone knows who Cedar Fair is but everyone on wallstreet has heard of six flags and not in a positive way.

 

Why cut a regional deal with Skyline when we have the power to now just throw in a national chain? Why not bring Nathans to every park in America. The strength of a company Six Flags sizes is a lot of rope to hang themselves.

 

I worry Six Flags negatives are far greater than the good Cedar Fair has. Even getting Cedar Fair on track post Kinzel took a good effort. It took a Disney man that understands the industry, trust and investment to get there.

[TheRickster]

34 minutes ago, DeLorean Rider said:

Today I have been confronted with just how much of a theme park snob I actually am. I didn't realize how much of a negative bias I have against Six Flags until the words "Six Flags Kings Island" started bouncing around in my head. It has been quite the rude awakening. 

I had this though too make it go away. I don't think they'd be dumb enough to brand everything Six Flags, if anything they need to remove the name from most of the parks except where it could be seen as a postiive like in Texas.

[BeeastFarmer]

I hope they employ the Kroger mentality. They typically keep the brand name of acquired companies but integrate best practices across the company. 

Doubtful that the new company would offload ki to Herschend. Ki is a powerhouse and I don't think Herschend could muster the debt needed to absorb it.

Great Americas will be reunited for a small time period, and a longer time if the new company and the landholder decide to extend the ground lease. Otherwise, they will still have a presence in NoCal.

I wonder how ****ed Sandusky and Arlington are.

[Taylor.B03]

I hope the six flags name isn't leaned into. It would be great to un-six flags the parks and bring back their previous names (except the OG six flags over Texas park). I think it would be wiser to see six flags as the corporate owner and operator of the parks rather than the namesake. Branding and identity of parks should be individual just like how we don't see "Cedar Fair Kings Island". Most people can look at the park and say that they loved or hate the park. Things like season pass advertising and the in park shopping bags that tell you what parks are affiliated are the best way to inform the consumer that "there's more to this than just Kings Island!". That's how I found out about amusement parks other than coney and ki without adding more complexity to ki branding. It allows ki to be it'self and not be an advert of the CF company, there are other means of advertising it which work!

[Taylor.B03]

1 minute ago, Taylor.B03 said:

I hope the six flags name isn't leaned into. It would be great to un-six flags the parks and bring back their previous names (except the OG six flags over Texas park). I think it would be wiser to see six flags as the corporate owner and operator of the parks rather than the namesake. Branding and identity of parks should be individual just like how we don't see "Cedar Fair Kings Island". Most people can look at the park and say that they loved or hate the park. Things like season pass advertising and the in park shopping bags that tell you what parks are affiliated are the best way to inform the consumer that "there's more to this than just Kings Island!". That's how I found out about amusement parks other than coney and ki without adding more complexity to ki branding. It allows ki to be it'self and not be an advert of the CF company, there are other means of advertising it which work!

One more thing I forgot to add.

Remember last year on the 50th anniversary. The paramount era wasn't able to really be recognized due to it being heavily branded. What if we go 20-30 years in the future and get sold off. Those years may never really be able to be as historically recognized due to branding issues. I would hate a 100 year anniversary to have holes due to the park name and licensed characters (DC in particular). 

[DoomPlague]

I'm sort of hoping they are going with the Six Flags name just to throw a bone to the SF board/investors. Otherwise it seems like CF is taking the lead here.

Then again, there seems to be this idea in the corporate world that brand "recognition" is all that matters regardless of reputation. Reminds me of when SBC decided to take on the name AT&T which people had little love for.

[MisterSG1]

It would be extremely foolish to rename Kings Island or Canada’s Wonderland for example.

While Six Flags over Toronto may sound cool, the park has been known as Canada’s Wonderland in some form throughout its 40 year history. Same goes with Kings Island. (There’s also the civic nonsense involved here saying that Wonderland isn’t technically in Toronto so it shouldn’t be called that)

If they were stupid enough to rename it, the vast majority of guests would refer to it by its original name. Kind of like the Skydome, Rogers bought the building and arrogantly renamed it Rogers Centre in 2005, but almost no one refers to it by that name except the media.

Even during the days of “Paramount Canada’s Wonderland”, most still referred to it as Wonderland or Canada’s Wonderland. Thinking of the park as “Paramount” almost never happened.

[DispatchMaster]

3 hours ago, BoddaH1994 said:

Let’s just hope and pray that they do take the best of both chains and do something special rather than making it kind of dismal like some of the Six Flags parks.

That's the hope, but it relies on each chain recognizing their weaknesses relative to the other chain, which is often not easy. 

[KIBeast]

I will say this...I will reserve judgement on how the chain is doing until 5 years down the road. At that point, you should at least begin to hear about changes to how Six Flags parks are managed. I would expect it would be longer than 5 before we will know the full effect of this merger. I don't see Kings Island being sold off. You don't sell off some of your most profitable parks when there are some less profitable that could be sold first. With CF management being utilized more, this should be seen as a good thing, not a bad thing. 

Also, we should face facts in that Six Flags has a better nationwide brand recognition than Cedar Fair. 

Finally, for the record, the only complaint I have about Orion is strictly my enthusiast preferences.

[Tr0y]

I hope the person that posted this gets the help they need from therapy.