Six Flags To Sell 7 Parks!

[RailRider]

All seven parks were sold to PARC 7F-Operations Corporation (PARC) of Jacksonville, FL for $312 million, a corporation that appears to have been set up by an invesment group to run the “seven flags†parks. The list of seven properties includes: Six Flags Darien Lake, Six Flags Elitch Gardens, Enchanted Village, Six Flags Splashtown, Six Flags Waterworld (Concord), Frontier City and White Water Bay. Combined with the $77 million from the sale of the Astroworld site will bring a total of $353 million into Six Flags to pay off their huge debt levels. Six Flags Elitch Gardens and Darien Lake will both drop the Six Flags name, but season passes already purchased will be honored at the parks still as well as at all Six Flags properties in 2007. One odd twist here is that “PARC will simultaneously sell the parks to CNL Income Properties Inc. (CNL), a Florida-based real estate investment trust, and lease back the parks from CNL pursuant to long- term leases.†Six Flags will hold a teleconference on Friday at Noon to discuss the impact of the sales on the company.

~as taken from screamcape~

Interesting notes regarding the sale:

Not selling Six Flags Magic Mountain

PARC will Sell the properties and then pay a Lease for them. Very odd way to run amusement parks and honestly gives me the sense that these parks days are numbered. Never like seeing the involvement of Real Estate Investment companies or Investment Groups, usually parks dont last long after that. Could these parks be facing the fate of AstroWorld? Im leaning that way.

Well SixFlags continues to unimpress. Why make changes at parks when you can just sell them and bulldoze them for another mall or condo complex. Sorry but as an enthusiast I hate SixFlags and their current buisness plan.

[AintNutinElse2Do]

Hello, first time poster long time looker. I will have to say that I completely agree with you RailRider. Six Flags would do a better job creating OpryMills out of Opryland than they are at running theme parks. I had really hoped that Herschand Family Entertainment (owners of Dollywood and Silver Dollar City and others) had been able to purchase some of the parks. I think they could of done wonders with them. I know not everyone would be excited about a country atmosphere but if you compare a Herschand Park with a Six Flags park there's a world of difference. Of course anything compared to most six flags park would be an improvement.

[RailRider]

^

Welcome, make yoursel at home and nice to see a first time poster with a very well thought out post.

I completely agree with you about Herschand and the quality of their parks. I was hoping for their involvement with some of these parks and the quality of opperations they bring to all of their parks. Anyone that has a negative view towards country type parks has never experienced the quality that a park like DollyWood or Silver Dollar City has to offer. Matter of fact these parks have become so popular that Gaylord Entertainment is now kicking themselves for removing OpryLand for OpryMills. Hence their venture to build a new park in that area. Still one of the dumbest moves I have ever seen and I almost despise Gaylord as much as SixFlags.

Anyways, Welcome and look forward to seeing you around the forums.

[ragerunner]

Some of these parks are pretty much the only amusement park in that region. So they have a chance to make a go of it. My biggest concern in all of this is, I just can't shake the feeling that the Amusement park industry in the US is going into a downsizing era and as a fan of amusement parks that's not good. Over the next 10 years or so we may see several parks go through the Astroworld ax.

[jzarley]

Interesting notes regarding the sale:

Not selling Six Flags Magic Mountain

PARC will Sell the properties and then pay a Lease for them. Very odd way to run amusement parks and honestly gives me the sense that these parks days are numbered. Never like seeing the involvement of Real Estate Investment companies or Investment Groups, usually parks dont last long after that. Could these parks be facing the fate of AstroWorld? Im leaning that way.

The "sale/leaseback" scenario is really common in the hotel business. (Gary Wilson at Marriott practically invented the concept in the 80s) Typically, it works well for businesses who are fee-based in nature, and allows them to receive operational revenue without carrying the real estate on their balance sheets. It's also a great way to recoup a big chunk of cash after a major acquisition.

[RailRider]

Doesn't $321M seem to be pretty cheap for 7 theme parks? Thats only $45.8M per park. Welcome to the bargain basement that is SixFlags. Sold SFWOA for a major loss and I think they may be doing the same here.

Also CNN Money Article Giving More Details Regarding Sale

Six Flags sheds 7 parks for $312M

Shares of amusement park operator soar as company looks to jettison some of its debt.

January 11 2007: 10:21 AM EST

NEW YORK (Reuters) -- Six Flags Inc. said Thursday that it sold three water parks and four theme parks for $312 million as part of its efforts to reduce debt, sending its shares soaring.

Six Flags (up $0.47 to $5.90, Charts) shares were up 11 percent in early trade on the New York Stock Exchange.

The amusement park operator has been reworking its business since a shake-up of its board and top management after investor Daniel Snyder won a long-running battle for control of the company in 2005. Six Flags has since been focusing on families and improving its financial position.

Six Flags, which had planned to sell up to nine parks, will receive $275 million in cash and a note receivable for $37 million for the parks near Buffalo, N.Y.; Denver, Oklahoma City, Houston, Concord, Calif.; and Seattle.

With the latest divestment, Six Flags will have raised $352 million in gross cash proceeds, including the June 2006 sale of land in Houston, to pay down debt.

Six Flags Magic Mountain and the adjacent Hurricane Harbor water park in Valencia, Calif., which were on the block, will be retained and open for business in 2007, the company said.

PARC Management will operate the parks, leasing them from real-estate income trust CNL Income Properties Inc.

The transaction is expected to be completed in March 2007.

Shares of Six Flags, which competes against such rivals as Knott's Berry Farm park operator Cedar Fair (up $0.09 to $27.83, Charts), have traded in a 52-week range of $4.53 to $11.93.

Link to Original Article

[Cody]

OK how lame are they? they bought seven parks for $312million... :\ im not even sure if they got they're money worth they're better off buying for a 1.00 thats all six flags worth...

[RailRider]

Six Flags is worth just a little more than $1.00

Once again great post on your part.

Pardon my Flame.

[Cory Butcher]

Well, 312 Million isnt too much, but the price was for 3 water parks and 4 themeparks. Last time I checked Water parks are greatly cheaper than themeparks, mainly for the lack of technology. If you take out what would be a good price for a water park, they werent sold too cheaply but, yes, cheap indeed. Six Flags has some good, but uninspired unthemed attractions, but their parks just arent up to snuff!

Rumorsmasher, you brought up in a pevious post that Six Flags had at one point of time invested 40 million dollars and four coasters, into one of its parks in one year, and that you wish that PKI would do that, and that 10 million dollars that PKI is getting isnt too good. Well, you better count your lucky stars, because it is that kind of whimsical spending that Six Flags exhibits, that nets them a $5.00/share operation and having to costantly pull out of debt! I am so happy that PKI wasnt bought by six Flags, Paramount was never as bad as they were at running a business.

[Gordon Bombay]

Railrider, you may hate their business plan but its better than all their parks going down hill, I'd rather see them cut off their non-performing parks and work to appeal to families and lighten their debt load.....then rather what old managent did where they would add a coaster every year and runn all the parks into the ground. There are very few 'decent' six flags parks left, they need to cut their loses and improve the ones they still can.

I agree with you though, I hate to see that these parks may possibly close, and when real estate companys and parks combine, the parks usually dont end up as parks.

[Jasper]

Hmmm..... I look forward to seeing what Six Flags does to Magic Mountain in the future. I can see why they did not sell magic mountain, because it is their baby. They have a whole slew of coasters ranging from Revolution, to the one of a kind X, to Goliath, to now Tatsu. I can see them cleaning that park up and adding some major major attractions.

[WooferBearATL]

Sounds to me like Six Flags is well on their way to making a come back. Jettison under-performing and un-impressive properties and focus on their prime real estate.

What is your issue with Six Flags RailRider? What am I missing?

[Cody]

Well, 312 Million isnt too much, but the price was for 3 water parks and 4 themeparks. Last time I checked Water parks are greatly cheaper than themeparks, mainly for the lack of technology. If you take out what would be a good price for a water park, they werent sold too cheaply but, yes, cheap indeed. Six Flags has some good, but uninspired unthemed attractions, but their parks just arent up to snuff!

Rumorsmasher, you brought up in a pevious post that Six Flags had at one point of time invested 40 million dollars and four coasters, into one of its parks in one year, and that you wish that PKI would do that, and that 10 million dollars that PKI is getting isnt too good. Well, you better count your lucky stars, because it is that kind of whimsical spending that Six Flags exhibits, that nets them a $5.00/share operation and having to costantly pull out of debt! I am so happy that PKI wasnt bought by six Flags, Paramount was never as bad as they were at running a business.

Go back and read my post about the 10million 2007 program, The guy i was argueing with say that 10million wasn't that good. I tryed to prove him wrong, go back and read the full thing.

[RailRider]

My issues with SixFlags? Well how about the fact that of all the parks and properties they own I would say the majority have been either run in to the ground, let slowly rot, and only a few have received the attention they deserve. That was the SixFlags biz plan for a long time, now they are trying to change that, but it might be too little too late. I think you will agree there are more SixFlags parks you wouldnt go to than you would go to. They have never had their guests or guests experience in mind and they dont give a darn about their investors. Look at their underperforming stock, the lack of value added to the company for the shareholders. Sorry but SixFlags has been a poorly run buisness that has always been behind the market trends. Too big for their own good. So now the Titantic is going down and they are unloading as much weight as possible. I hate to see what could be very good parks, left to rot and thats what SixFlags has done with a lot of their properties. Unfortuantely it may be too late for the company to recover and then who knows about the rest of the parks.

Speaking of dead weight. The problem is they wana unload Magic Mountain as quickly as possible because it is a huge debt burden to the company as a whole. The park has so many issues that need corrected it would be easier for them to just sell it, but nobody has wanted to try and fix these issues, hence no buyers. I am also sure Six Flags is asking a hefty price for Magic Mountain because of its location, size, and the number of big attractions it has.

But honestly who wants to take over a maintence nightmare, that needs major infastructure improvements and is on serious decline. Good luck unloading that lemon. By the way Geuaga Lake was on the road to becoming the MidWest version of Magic Mountain, but thankfully Cedar Fair was able to buy it for a fairly reassonable price.

[RailRider]

Hate to double post, but here are just some of the facts that go towards my dislike of SixFlags as a company and what they have done for their stockholders.

Current Stock Price $5.90 per share

From 1998 to 2001 Six Flags stock went between $15 to $43 per share, given this was a boom market but still the stock averaged over $25 per share for this time frame. Quickly declined over the past 5 years.

Numbers for 2005

Total Net Income -$110.9M

Earnings Per Share -$1.43 per share

Lets compare their closest competitor Cedar Fair

Current Stock Price $27.85 per share and that is with them taking on what everyone considers a huge debt load with the Paramount Parks acquisition.

After the market fall in 2001 Cedar Fair stock was around $15 to $18 per share. Not quite as good as Six Flags. What has Cedar Fair done over the Past 5 years? Just improved their per share price by more than $10 per share. Wonder why people love Dick Kinzel. Heck of a CEO to acomplish that type of stock per share increase in a very tough industry.

Numbers for 2005

Total Net Income $160.9M

Earnings Per Share $2.93 per share

Im not a blind fan boy to Cedar Fair or a hater of Six Flags, I am trying to compare apples to apples.

I respect and admire Cedar Fair for what they have been able to do as a company in a tough industry and I have some serious issues with Six Flags and how they conduct buisness in the same industry. Take the numbers for what they are worth.

[Cory Butcher]

I have to agree with you rail rider! The only park that six Flags has that seems to contain decent infrastructure and some great rides is SFOG I love that place. The only bad things about it are the main street area, is nothing like that of KI or a Disney or CP, and most anywhere you go in the park there are some funky smells, but that could be because of that Georgia mold in places. In refering to the main street area, when you walk in through the turnstiles it doesnt feel like a grand amusement park, it is as if it was an after thought, you are greeted by a giant fake facade, and then when you walk through its just a really bland use of space.

[WooferBearATL]

Well, I'd say stick around and watch what Six Flags has in mind. SFOG is one of they premier parks and if they can bring the other parks to that level, I'd say CF may have some concerns.

[The Interpreter]

And remember, all...the new Six Flags management has never even had ONE season where THEY got to plan and execute THEIR plan yet. 2007 will be the proof of the pudding, or lack thereof. Yes, the company has many, many execution issues...from poor operations to dirty parks to poor customer service. They have already improved lightyears from where they were under Gary Story and company. This is a company whose managers and owners DID neglect it. Snyder and Shapiro are doing what they can to save it.

Some of those things people are going to like, some they won't.

And I agree, they didn't get what they wanted out of Magic Mountain, so they didn't sell it. But this is largely because they decided NOT to sell it merely for real estate value. (Probably only because they are waiting for California <and DC area> real estate values to recover from their recent slide).

As for the earlier poster who was trumpeting the coaster collection at Magic Mountain, something tells me he had never been there. I have. Many times. It takes many times just to get to ride all the coasters there. As a matter of fact, I have NEVER been there when ALL the coasters were open during the day I was there. Not once.

[cstrwomann]

$312 million for 7 parks isn't very much money when they were in debt 2.5 billion. What's going to happen to these parks now? Will they be open in 07? Will people be able to use their season passes and still visit them this season? Are these parks going to fade away like Astroworld? Who is PARC Management?

[cstrwomann]

I'm upset that they are selling Darien Lake. I would have rather seen Mexico be sold or LaRonde how many people from the USA visit these parks? I hope they don't sell anymore parks and they can recover from their debt now and improve the parks they have left. I live in Ohio and I don't fly very often to parks so I've been to 9 of their parks and my favorites are SF GAdv-NJ, SF GAm-Ill, SFGa, SF Am-Md., SF St. Louis, SFKK, SFDL, SF Ohio, and Wyandot Lake. I still would like to visit Tx, Calif., and Mass.

[WooferBearATL]

I'm upset that they are selling Darien Lake. I would have rather seen Mexico be sold or LaRonde how many people from the USA visit these parks? I hope they don't sell anymore parks and they can recover from their debt now and improve the parks they have left. I live in Ohio and I don't fly very often to parks so I've been to 9 of their parks and my favorites are SF GAdv-NJ, SF GAm-Ill, SFGa, SF Am-Md., SF St. Louis, SFKK, SFDL, SF Ohio, and Wyandot Lake. I still would like to visit Tx, Calif., and Mass.

Maybe you should ask how many Mexicans or Canadians visit those parks.

It's very arrogant to think that parks should only stay open if folks from the USA visit the parks.

I must say that Wonderland is one of the absolute most beautiful parks I've ever been to. I suppose you believe CF should jettison that park as so many Canadians go to the park?

[The Interpreter]

The PARC people are from the old Alfa parks group, who at one time ran, among other things, Visionland in Alabama; perhaps the worst ran park during their time of ownership of ANY I have ever visited. The place got so bad, the new owners now call it Alabama Adventure, trying, no doubt, to disassociate themselves from the park's past.

[RailRider]

Well with a good track record like Visionland they should be able to do wonders with underperforming former Six Flags parks.

The outlook seems good to me.

[RailRider]

Heres some more information regarding Parc Management LLC as taken from Screamscape.

Parc Management LLC - (1/12/07) After buying up seven Six Flags properties yesterday we decided to look into this new company and the purchase deal. First off it seems that PARC Management LLC is a company set up to run the parks for the true owner, CNL Properties, a real estate investment trust. You can read details of the purchase here, but the end result as I understand it is that CNL will own the parks and lease them to their own PARC Management LLC company to run. The initial leases are to be through 2029 along with three 10 year renewal options. This pretty much locks them in place through 2059 unless they are not profitable.

PARC is being headed up by new CEO Randall H. Drew and Chairman Michael A. Jenkins. Drew was the previous CEO of Alfa SmartParks, the previous owner of Jazzland and several waterparks throughout the country, most of which were later sold to Palace Entertainment. Jenkins was an original Six Flags player involved with Angus Wynne back when Wynne first created Six Flags as well as a former VP of Six Flags over Texas. He left with Wynne when they sold Six Flags and established Leisure and Recreation Concepts (LARC) and comes with a 40 year history in the business. You can read up on the other top VPs at PARC at their official website, most of which are people who worked for Alfa or even Six Flags in the past.

A few details mentioned about the properties:

Darien Lake: 978 acres, combination theme park / water park with camp ground (no mention of the hotel however...)

Elitch Gardens: 62 acres, combination theme park / water park.

Frontier City & White Water Bay: 113 acres and 21 acres

Splashtown: 53 acre water park

Waterworld: 23 acre water park

Wild Waves & Enchanted Village: 67 acres, combination theme park / water park

[cstrwomann]

Where did you find this information at? What web site? Does PARC own or run any other parks besides Alabama Adventure? I haven't been to Alabama Adventure is it a nice park?

[The Interpreter]

Where did you find this information at? What web site? Does PARC own or run any other parks besides Alabama Adventure? I haven't been to Alabama Adventure is it a nice park?

They don't run Alabama Adventure...Alabama Adventure is owned by Southland Entertainment Group. At one time, it was run by some of the people who currently make up PARC. And the park failed. Miserably. In fact, it went bankrupt. And if you had visited the park, you'd know why. No shade, very poor layout and extremely poor operations. Rampage, when it opened, was a great roller coaster, before that group almost literally let it go to pot.

I'm sorry, I see real estate deal here...

It's coming.

If you want to go to any of the sold Six Flags parks, I'd advise you to get there quickly.

[cstrwomann]

The above article said that PARC Management will run parks on leases until 2029 based upon park performance. If the park draws people to the area and the company makes money why close it. You might be right that some will close but you might also be wrong. I've been to the ones I want to see already except California, Texas, and Massachusetts.

[Gordon Bombay]

^IF the parks make money, read it, the parks are leased by real estate companies.....and I dont think a real estate company has much interest in running an amusement park.

[cstrwomann]

The parks are going to be open in 07' with a Six Flags season pass you can still visit them. I guess we'll have to wait and see what happens in 08'. I hope that these parks can stay open. I hate to see parks close due to downsizing in a chain. I haven't been to the OKL, Wash., Colo. parks yet. They aren't really appealing to me because of the coasters that they have. Are they nice parks?

[The Interpreter]

The parks are going to be open in 07' with a Six Flags season pass you can still visit them. I guess we'll have to wait and see what happens in 08'. I hope that these parks can stay open. I hate to see parks close due to downsizing in a chain. I haven't been to the OKL, Wash., Colo. parks yet. They aren't really appealing to me because of the coasters that they have. Are they nice parks?

Actually, that is NOT the case. The sold parks will honor the passes THEY sold, but your Six Flags pass will NOT get you into the parks that no longer belong to Six Flags, unless you pay to get in, of course.