Fire Sale Coming: Analysts Believe Six Flags Could Be Forced To Sell Half Its Parks

Six Flags’ terrible summer just keeps getting worse. With earnings and attendance down, and potentially facing an investor lawsuit, a theme park insider believes the only way forward for the company is to sell off nearly half its assets, including many of its most popular theme parks.

The X2 roller coaster with multiple rows of riders twists through the sky against a backdrop of clouds. The passengers show a mix of excitement and thrill, with their hands up or gripping the restraints. The coaster is red with black and silver accents at Six Flags Magic Mountain. — Credit: Six Flags Magic Mountain

During its first quarter earnings report this year, Six Flags Entertainment, North America’s largest theme park company, told investors that attendance declined 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.

Earlier this month, Zimmerman told investors that Six Flags saw a $100 million decline in revenue during the second quarter, a nine percent decline in attendance, and an eight percent decline in season pass purchases. Before announcing the numbers, Zimmerman told investors he would be stepping down as CEO as soon as the Board could find a replacement.

Credit: Six Flags New England

Dennis Speigel, a consultant who has studied the amusement park industry for decades and is the president of International Theme Park Services in Cincinnati, told Cleveland.com that the entire company needs to be “reimagined” and that theme park fans have not seen the complete fallout from Six Flags’ latest earnings report.

Speigel believes that the company only has two choices to get back to solvency: sell up to half of its parks or declare bankruptcy. Neither option is optimal, but Speigel believes Six Flags could unload 10-12 parks to help balance its books.

A ride vehicle goes over the hill on Kingda Ka, the tallest roller coaster in the world, at Six Flags Great Adventure in New Jersey — Credit: Six Flags

So, how did this happen only one year after a merger that created North America’s largest theme park operator? Six Flags has stuck by the answer that early-season weather doomed a large portion of its year, but the reality is much bleaker.

Speigel believes that Six Flags greatly overestimated the number of guests who would purchase season passes for the combined parks. However, the main reason things went so badly so quickly is that the two companies had differing growth strategies.

Batman: The Ride, an intricate blue and black roller coaster, twists and turns against a clear sky at Six Flags Over Georgia. — Credit: Six Flags

Cedar Fair likes slow, steady growth, while Six Flags prefers to take significant risks, which often have a bigger downside. It also didn’t help that Six Flags’ parks were carrying large debt when the two sides entered into this partnership.

To manage that debt, the new Six Flags Entertainment began cutting staff, which impacted the guest experience. Now, to try to make up the difference, Six Flags parks nationwide have started charging for in-park experiences that were once free.

Entrance of Six Flags America featuring a large building with white pillars and a triangular pediment displaying the park's name. Ticket booths are visible below, with employees assisting eager visitors, surrounded by signs and people. The sky is partly cloudy. — Credit: Six Flags

Now, Six Flags Entertainment is in a no-win situation with no CEO and parks losing more money by the day. The only question left is what’s going to happen next?

What has your experience been like at Six Flags this season? Let us know in the comments.