June 22, 2006
New York — Six Flags announced that it is considering the possible sale of its theme and water parks in Los Angeles, Houston, Seattle, Denver and Buffalo, NY.
The company during a conference call Thursday, said it is exploring potential strategic options with respect to these six properties. The specific parks are Six Flags Darien Lake (Buffalo, NY), Six Flags Elitch Gardens (Denver), Six Flags Waterworld (Concord, CA), Wild Waves and Enchanted Village (Seattle), Six Flags Splashtown (Houston) and Six Flags Magic Mountain and Hurricane Harbor (Los Angeles).
The company wasn't sure if they would sell the parks as individuals or a package and a final decision to sell still has to be made.
"We're making progress with our strategy to focus on the growth of our strongest assets, reduce the Company's debt, and generate increased value for our shareholders," said Mark Shapiro, who was named President and Chief Executive Officer of Six Flags in December 2005.
The largest property that may be sold is Magic Mountain and Hurricane Harbor in Los Angeles.
"Magic Mountain doesn't fit Six Flags new brand strategy," said Shapiro.
For several years, Magic Mountain has been marketed as a "thrill park" with 17 roller coasters. That marketing approach doesn't align with the company's renewed focus on families.
Shapiro is hoping to revive the tarnished Six Flags brand by making the parks more appealing to families. He hopes to earn repeat business by delivering an exceptional entertainment experience through a number of customer service initiatives.
"We're investing more in our operations because the health of our business depends on bringing back families," he said. "Our first priority is to fix the operation and that is not going to happen overnight. We see this as a long-term investment."
The past approach of building taller and faster rides that appeal primarily to the teenage market is clearly over.
According to Shapiro, the capital invested in new rides over the past several years has not paid off. Instead he plans to invest in the guest experience to improve the Six Flags brand and win back families.
The possible sale of these properties would help Six Flags focus on specific markets with strong properties and help reduce the company's burdening debt.
Last year, Six Flags closed its AstroWorld theme park in Houston citing rising land value and declining attendance as the reasons. The company earned $77 million from the recent sale of the land.
In addition to the six properties they are considering selling, Six Flags announced that it would sell its two Oklahoma City parks. The company has already received multiple bids for these parks that they are currently evaluating.
Six Flags also has agreed to sell the assets of its water park in Columbus, Ohio to the Columbus Zoo for $2 million at the end of the October when the park's lease term expires.
Earlier this year the company exercised its right to terminate the lease of its Sacramento water park following the end of the current season. The company is currently in discussions with third parties to sell the rides and attractions at the water park.
Six Flags is also attempting to sell parcels of excess land at its parks in Gurnee, IL and St. Louis.
See related: www.sixflags.com
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