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Cedar Fair Acquisition FAQ


jzarley
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Cedar Fair filed this 8K with the SEC regarding frequently asked shareholder questions about the Paramount Parks acquisition:

http://yahoo.brand.edgar-online.com/fetchF...00054&Type=HTML

Nothing really new that we haven't heard before, except the details of the penalties (reduction in purchase price) of $1M per day for each day later than a 06/30/06 closing date (up to a maximum of $31M)! So, I'm guessing CBS is going to be hot-and-heavy to get this deal closed by the 30th! biggrin.gif

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How? What is said in that FAQ about the themeing is the exact thing we've been told from day one: "We have not made any decisions at this time about how best to utilize the rights under the license agreements going forward."

The questions will continue.

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How? What is said in that FAQ about the themeing is the exact thing we've been told from day one: "We have not made any decisions at this time about how best to utilize the rights under the license agreements going forward."

The questions will continue.

It says that the licensing agreements come with the park. I know I've read elsewhere that they do plan on using the licensing agreements. Someone will have to search that and find out where because I can't remember if it was here or Pointbuzz or Coasterbuzz.

8. Will Cedar Fair keep the Nickelodeon and Paramount theming throughout the acquired parks?

The transaction includes the licensing agreements with Nickelodeon and Paramount. The Nickelodeon licensing agreement expires within four years and the Paramount agreement expires within ten years, subject to certain early termination rights. We have not made any decisions at this time about how best to utilize the rights under the license agreements going forward.

Most of all, here's the most logical reasoning, from this board no less. J Zarley's post on second page.

It even says "how best" to utilize them, meaning, utilzing them, not ditching them.

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To be honest...I didn't really think there was anything new at all related to the theming/licenses. The 8K was pretty much verbatim of what was said on each conference call.

The part I found really interesting was that CBS loses $1,000,000 a day for each day in July when the sale doesn't close. That was the first time I had heard that...

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I too find it surprising that the sale price will drop $1 million per day. To me, it doesn`t seem like CBS is pushing for the deal to get done by June 30th (otherwise it would be a $1 million penalty, not a reduction). But other than that, all the information was essentially just a synapsis of what was discussed in the teleconference the day the acquisition was announced.

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But, as others have said, the real licensing deal that has far more potential is Nick. The Paramount licenses are ok, but the Nick ones are the ones that can bring in the family demographic to the parks. The question I have is what type of extension to the Nick deal is available to Cedar Fair after the four years are up.

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Uh, I *DO* see new information here about the licensing....Quoting while adding emphasis:

The transaction includes the licensing agreements with Nickelodeon and Paramount. The Nickelodeon licensing agreement expires within four years and the Paramount agreement expires within ten years, SUBJECT TO CERTAIN EARLY TERMINATION RIGHTS. We have not made any decisions at this time about how best to utilize the rights under the license agreements going forward.

 

[emphasis supplied]

That could mean a number of things, among them:

* CBS and or Viacom may have the right to terminate the licensing earlier if certain conditions are not met.

and/or

* Cedar Fair may be entitled to some kind of refund if it chooses not to use the licensing rights, or some portion of them.

That language is hiding something. Something they chose not to disclose, but wanted to, sort of.

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Yeah...I had noticed that line too. There just wasn't enough detail there to really assume anything. And, of course, the early termination rights could go either way (i.e., another park wants to add a Nick-themed attraction and they're willing to pay a higher license than was granted to CF in the sale...) It could be a timing thing (after one year, three, or five, etc.) And, you're right...they seemed purposely vague on that point... After the sale closes there will probably more disclosed about the acquisition details, and that may shed a little more light on things.

To be honest, I couldn't care less whether they keep any of the Viacom themes or not (although, I do believe that Nick has a certain drawing power). I just really don't want them to spend a bunch of cash retheming for the heck of it. (Not that spending money needlessly has ever been a fault of Dick Kinzel.) Of course, if it doesn't affect the distribution and unit value, I guess I really don't care about that either. (Sound a little greedy? biggrin.gif )

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It makes perfect sense to keep the Nickelodeon theming for the next 4 years as Nickelodeon is way more popular than Peanuts.

As far as the Paramount theming is concerned, with the exception of Star Trek: The Experience and the Borg Ride at Carowinds - I don't thnk that any Paramount-themed ride is worth the license anymore.

People will enjoy TIJ, TG, Days of Thunder, CDBB, Drop Zone, and Face/Off regardless of the names - and none of those movies is all that hot anymore anyway. TR:TR might be an exception - but even that can be re-named and re-themed.

That's just my opinion anyway.

Have a great day!

Italian Chef

chef.gif

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