5
Credit: Jeremy Thompson, FlickrSix Flags, the largest theme park company in North America, has had a rocky year, but that was supposed to change when it brought on a new investor. Chiefs tight end, and Mr. Taylor Swift, Travis Kelce, was part of a group that purchased a stake in the theme park giant.
But since Kelce came on board, he hasn’t been able to work any of that Chiefs’ magic on Six Flags, and the news just got worse today.
After Six Flags closed Six Flags America outside Washington, D.C., on November 2, Brian Witherow, executive VP and CFO of Six Flags, told investors that the company was planning on either closing or selling off more of its parks.
“Getting the portfolio smaller and more nimble is a priority,” Witherow said. “So we’re going to look at the parks where our returns are the greatest, where the opportunities for growth are the highest, and we’re going to focus on those parks, and the other parks we’ll look to monetize and use those proceeds to reduce debt.”
Witherow said that the company is in the process of identifying what he called “core” and “non-core” parks, and the company would “divest itself” of those parks that it deemed to be “non-core.” While Witherow did not identify the parks the company would be selling, based on those that are adding new attractions, it’s easy to surmise which ones the company deems to be “core.”
Some of the parks that have already announced and/or teased new attractions are Cedar Fair, Six Flags Over Texas, Carowinds, Six Flags Mexico, Kings Island, and Canada’s Wonderland. That doesn’t mean that the parks not on this list are in danger, but if the parks are planning new attractions, it feels unlikely they will close.
Following the merger with Cedar Fair, Six Flags now operates over 40 theme parks, some of which have areas of overlap and may be deemed expendable. What’s clear is that the company is now closely examining the sale and/or closure of many of its parks to alleviate its current financial situation.
Six Flags’ Issues
During its first-quarter earnings report this year, Six Flags Entertainment, North America’s largest theme park company, informed investors that attendance declined by 17 percent. At the time, CEO Richard Zimmerman told investors that inclement weather was to blame for the slow start to the season, as rainstorms nationwide slowed guests’ visits to the parks.
With those numbers in the rearview mirror, Zimmerman hoped to deliver better news when he met with investors to give the company’s second-quarter earnings, but it was not to be, and Zimmerman paid the price for Six Flags’ decline.
During the second-quarter earnings call, Zimmerman told investors that Six Flags experienced a $100 million revenue decline, a nine percent decline in attendance, and an eight percent decline in season pass purchases. Before announcing the numbers, Zimmerman told investors he would step down as CEO as soon as the Board could find a replacement.
Which Six Flags parks do you think will be closing in the future? Let us know in the comments.