DOJ seeks additional info from Six Flags, Cedar Fair on $8 bln merger

[BoddaH1994]

https://finance.yahoo.com/news/doj-seeks-additional-six-flags-114636554.html

May 2 is the new targeted compliance date. 

[Benjamin22]

Merger will go through almost certainly, this over zealous DOJ hasn't been very effective in all there attempted anti trust measures. 

[DonHelbig]

Here’s a piece I wrote on Theme Parks By Don. 

https://themeparksbydon.com/six-flags-and-cedar-fair-merger-faces-doj-hurdle/

[robintodd]

I can understand them looking into it but I would be worried about a monopoly being formed.  SIX and FUN remaining seperate would keep the capitalist gear of competition going to help drive down prices.  Remember the game Monopoly was originally invented to warn AGAINST the formation of monopoies.  Capitalism completely falls apart without  competition.

That being said it could be seen that even with the merger competition would still exist between the new entity and smaller parks, zoos and other forms of entertainment.  

Just a thought.

[BoddaH1994]

22 hours ago, robintodd said:

I can understand them looking into it but I would be worried about a monopoly being formed.  SIX and FUN remaining seperate would keep the capitalist gear of competition going to help drive down prices.  Remember the game Monopoly was originally invented to warn AGAINST the formation of monopoies.  Capitalism completely falls apart without  competition.

That being said it could be seen that even with the merger competition would still exist between the new entity and smaller parks, zoos and other forms of entertainment.  

Just a thought.

I think the DOJ is thinking exactly what you’re saying; however I don’t think it’s true in the theme park context. They’ll have to make certain concessions, but it’ll go through eventually. Just my guess 

[robintodd]

17 hours ago, BoddaH1994 said:

I think the DOJ is thinking exactly what you’re saying; however I don’t think it’s true in the theme park context. They’ll have to make certain concessions, but it’ll go through eventually. Just my guess 

Yea I would agree, unfortunately.  In the past 40 years there has been too many mergers that create monopolies, mostly because of businesses giving influencing our politics on both sides (thanks citizens united).  Toatally runining the ability of free markets to keep down prices.  

[Tr0y]

I don’t think this Merger will create a monopoly by any stretch. For one, I’d expect post merge that SIX will have a sell off of some of its parks to pay down its debts. Also, with amusement parks being a segment of entertainment, there is still a lot of competition in that space. For example, Kings Island is competing against the Reds, Bengals, AMC Theatre’s, Cincy Zoo and so on. 

[Bansheelover]

Saw this coming from a mile away. The DOJ will do everything they can to prevent this merger from happening.  With how many parks, and the amount of the country that will be under this umbrella I can see them saying it is a monopoly.  Have heard rumors on X that a lot shareholders on both sides are not happy with the merger. Time as always will tell.

[disco2000]

I don't think the DOJ cares as much about discretionary income mergers as they do something with grocery stores or other basic needs.

This is just standard procedure.

If for some reason the DOJ balks at it, all the merger team needs to do is tip their hand and say they plan to sell off X number of parks and all is good in the world.

It will be no different than Kroger being allowed to carry on with a merger if they sold over 400 stores so as to keep a competitor.

 

[Kenban]

I keep seeing monopoly thrown around, the problem is the parks largely exist as their own regional monopolies already.  The majority of the competition between Six Flags and Cedar Fair occurs in discussions between enthusiasts.  Guests primarily visit their local park, and in the rare instances where the chains do have parks close enough to compete they typically have other competition as well.  Kings Dominion for instance is closer to Busch Gardens than Six Flags America.

On a national level the two chains combined have a lower attendance than just the 4 main theme parks at Disney World.  When guests are willing to travel they have already spoken with their wallets and picked someone else.

I would be surprised if the Justice Department decides to do much.  

[BeeastFarmer]

3 hours ago, Tr0y said:

I don’t think this Merger will create a monopoly by any stretch. For one, I’d expect post merge that SIX will have a sell off of some of its parks to pay down its debts. Also, with amusement parks being a segment of entertainment, there is still a lot of competition in that space. For example, Kings Island is competing against the Reds, Bengals, AMC Theatre’s, Cincy Zoo and so on. 

Actually, post merger, it will be FUN, not SIX that will have to make these decisions. The ticker will be FUN, but the company will be called Six Flags. 

This is going to take some getting used to.

[DispatchMaster]

On 1/27/2024 at 1:33 PM, disco2000 said:

It will be no different than Kroger being allowed to carry on with a merger if they sold over 400 stores so as to keep a competitor.

This. If Kroger, which has been monopolizing the supermarket sector for decades, and has been abusing their market position to maintain low wages and maintain profit margins in excess of inflation in the last few years, is allowed to exist, there is simply no rationale to prevent the CF-SF merger.

Regional parks do not compete with one another, they compete with other entertainment options, and this merger does not affect that competition at all.

[BoddaH1994]

51 minutes ago, DispatchMaster said:

This. If Kroger, which has been monopolizing the supermarket sector for decades, and has been abusing their market position to maintain low wages and maintain profit margins in excess of inflation in the last few years, is allowed to exist, there is simply no rationale to prevent the CF-SF merger.

Regional parks do not compete with one another, they compete with other entertainment options, and this merger does not affect that competition at all.

Agreed. I feel like the DOJ doesn’t understand the theme park market. They’ll have to sell them on the fact that they don’t compete, which should be self-evident once facts are presented. There may be a few concessions, but I think this merger will happen. 

[Shawn Meyer]

^ I feel dumb here, but what does DOJ stand for?

[disco2000]

6 minutes ago, Shawn Meyer said:

^ I feel dumb here, but what does DOJ stand for?

Department of Justice (hint - if you opened the article it mentions it....)

[Tr0y]

3 hours ago, DispatchMaster said:

This. If Kroger, which has been monopolizing the supermarket sector for decades, and has been abusing their market position to maintain low wages and maintain profit margins in excess of inflation in the last few years, is allowed to exist, there is simply no rationale to prevent the CF-SF merger.

Regional parks do not compete with one another, they compete with other entertainment options, and this merger does not affect that competition at all.

Welcome back Chad! 

[CoasterJack]

39 minutes ago, Shawn Meyer said:

^ I feel dumb here, but what does DOJ stand for?

 

There's too many acronyms today, no one has the time for full words anymore

[beastfan11]

2 hours ago, Shawn Meyer said:

^ I feel dumb here, but what does DOJ stand for?

No reason to feel dumb for asking a legitimate question. 

[disco2000]

5 hours ago, DispatchMaster said:

This. If Kroger, which has been monopolizing the supermarket sector for decades, and has been abusing their market position to maintain low wages and maintain profit margins in excess of inflation in the last few years, is allowed to exist, there is simply no rationale to prevent the CF-SF merger.

Regional parks do not compete with one another, they compete with other entertainment options, and this merger does not affect that competition at all.

Welcome back - were you on a cruise with no internet or something?  Been awhile since you posted.

[DispatchMaster]

I've been waiting on my router to reboot.