Adam in CO
08-11-2006, 05:32 PM
If Six Flags Inc. gets its wish, Denver's Elitch Gardens will not only go to the highest bidder but also remain an amusement park.
"Our strong preference is to sell the park as a park," said Mark Quenzel, executive vice president for strategy and management. "In terms of driving tourism and revenue, we think it's a very viable entity, either as part of a group of parks or on its own."
That said, the company must find the best deal for its shareholders, whether that offer comes from an amusement park operator or a developer looking to add residential or other commercial uses on the 75-acre parcel along the Platte River.
"I can't sit here and say it'll be sold as a park - it sits on valuable land," Quenzel said in an interview with the News this week.
While attendance is down slightly this year, Elitch Gardens isn't on the block because of poor performance, he said.
New York-based Six Flags has been under new management since December, when Washington Redskins owner Daniel Snyder took control of the board and appointed 35-year-old former ESPN executive Mark Shapiro as CEO.
The group inherited $2.1 billion in debt, in part because previous management paid $20 million apiece for giant new roller coasters in four parks at the expense of other properties, Quenzel said.
The new team determined early on it would need to sell off assets, including parks, to get out from under some of the debt and have more to reinvest in the properties it keeps.
Calls quickly began coming from parties interested in some of the parks, and the company put the six most sought-after up for sale, including Elitch's and Magic Mountain near Los Angeles, Quenzel said.
No price tag has been attached to any of the properties yet, and prospective buyers are still doing their research, he said.
"You're not going to wake up next week and say, 'Oops, it's been sold.' There's still a lot of work to do."
Six Flags, which doesn't release numbers for individual parks, saw overall attendance at its 30 parks drop by 14 percent, to 9.6 million from 11.2 million, in the quarter ended June 30.
Some issues specific to the company, including efforts to discourage teens who loitered and didn't spend, contributed to lower attendance, Shapiro has said.
"This industry was launched and built on the family business," said Dennis Speigel of Cincinnati-based consultancy International Theme Park Services.
"We have gotten away from that by the prostitution of season passes. The parks became a baby-sitting service for teens. They came, they rode, they abused the rides and they didn't spend any money. Meanwhile, families were backing away."
Six Flags isn't the only seasonal park operator suffering from lower attendance.
Rising fuel prices and falling consumer confidence, combined with blazing heat in some parts of the country, are hitting others as well, Speigel said.
"This kind of season has been the perfect negative storm," he said.
Even in good years, when consumers are flush with cash and the weather cooperates, attendance growth has slowed in comparison with earlier decades when amusement parks were still growing up.
"It's now a highly mature industry - we're not going to see that double-digit growth again," Speigel said.
Prospective buyers that would keep Elitch's as an amusement park would likely include private equity groups or perhaps smaller investors with emotional ties to the parks, he said.
Large, year-round operators like Disney, Universal Studios and Anheuser Busch fill another niche, and likely wouldn't be interested in Six Flags' seasonal parks, he said.
Unlike such year-round attractions as Cedar Fair's Knott's Berry Farm and Disney's parks in Florida and California, seasonal parks have about six months to make their money.
Six Flags' 30-park portfolio includes one year-round attraction in Mexico City.
Magic Mountain stays open on weekends almost all year, while the rest of the parks run from spring through fall, Quenzel said.
Early this season, Six Flags invested in cleaning up its properties, as well as adding entertainment, staff, and additional food and beverage options.
More recently, Quenzel said, the parks have been re-evaluating staffing as school starts and weekday attendance lessens.
"The park has different needs at different times of the year - we're reconfiguring our staffing now," he said, which means cutting back in some areas like the number of characters and food vendors, and beefing up in others like end-of-season events. "It's a very important time of year, because if there's a misstep now, you don't have the opportunity to get it back like you did in May and June."
"Our strong preference is to sell the park as a park," said Mark Quenzel, executive vice president for strategy and management. "In terms of driving tourism and revenue, we think it's a very viable entity, either as part of a group of parks or on its own."
That said, the company must find the best deal for its shareholders, whether that offer comes from an amusement park operator or a developer looking to add residential or other commercial uses on the 75-acre parcel along the Platte River.
"I can't sit here and say it'll be sold as a park - it sits on valuable land," Quenzel said in an interview with the News this week.
While attendance is down slightly this year, Elitch Gardens isn't on the block because of poor performance, he said.
New York-based Six Flags has been under new management since December, when Washington Redskins owner Daniel Snyder took control of the board and appointed 35-year-old former ESPN executive Mark Shapiro as CEO.
The group inherited $2.1 billion in debt, in part because previous management paid $20 million apiece for giant new roller coasters in four parks at the expense of other properties, Quenzel said.
The new team determined early on it would need to sell off assets, including parks, to get out from under some of the debt and have more to reinvest in the properties it keeps.
Calls quickly began coming from parties interested in some of the parks, and the company put the six most sought-after up for sale, including Elitch's and Magic Mountain near Los Angeles, Quenzel said.
No price tag has been attached to any of the properties yet, and prospective buyers are still doing their research, he said.
"You're not going to wake up next week and say, 'Oops, it's been sold.' There's still a lot of work to do."
Six Flags, which doesn't release numbers for individual parks, saw overall attendance at its 30 parks drop by 14 percent, to 9.6 million from 11.2 million, in the quarter ended June 30.
Some issues specific to the company, including efforts to discourage teens who loitered and didn't spend, contributed to lower attendance, Shapiro has said.
"This industry was launched and built on the family business," said Dennis Speigel of Cincinnati-based consultancy International Theme Park Services.
"We have gotten away from that by the prostitution of season passes. The parks became a baby-sitting service for teens. They came, they rode, they abused the rides and they didn't spend any money. Meanwhile, families were backing away."
Six Flags isn't the only seasonal park operator suffering from lower attendance.
Rising fuel prices and falling consumer confidence, combined with blazing heat in some parts of the country, are hitting others as well, Speigel said.
"This kind of season has been the perfect negative storm," he said.
Even in good years, when consumers are flush with cash and the weather cooperates, attendance growth has slowed in comparison with earlier decades when amusement parks were still growing up.
"It's now a highly mature industry - we're not going to see that double-digit growth again," Speigel said.
Prospective buyers that would keep Elitch's as an amusement park would likely include private equity groups or perhaps smaller investors with emotional ties to the parks, he said.
Large, year-round operators like Disney, Universal Studios and Anheuser Busch fill another niche, and likely wouldn't be interested in Six Flags' seasonal parks, he said.
Unlike such year-round attractions as Cedar Fair's Knott's Berry Farm and Disney's parks in Florida and California, seasonal parks have about six months to make their money.
Six Flags' 30-park portfolio includes one year-round attraction in Mexico City.
Magic Mountain stays open on weekends almost all year, while the rest of the parks run from spring through fall, Quenzel said.
Early this season, Six Flags invested in cleaning up its properties, as well as adding entertainment, staff, and additional food and beverage options.
More recently, Quenzel said, the parks have been re-evaluating staffing as school starts and weekday attendance lessens.
"The park has different needs at different times of the year - we're reconfiguring our staffing now," he said, which means cutting back in some areas like the number of characters and food vendors, and beefing up in others like end-of-season events. "It's a very important time of year, because if there's a misstep now, you don't have the opportunity to get it back like you did in May and June."