The BLOGFlume—Super-Sized

All about money, including a "super-sized" lawsuit filed against Disney

Written by Russell Meyer
Published: January 12, 2005 at 10:22 PM

Six Flags Makes News
The News Herald 1/10/05
The Republican 1/7/05

First, Six Flags just got stuck with a $2.5 million tax bill on a park they no longer own. The status of three attractions- Grizzly Run, Mind Eraser, and Skyscraper- was in question; were they personal property or “real” property? Ohio Supreme Court ruled 4-3 that the attractions were “business fixtures” and subject to personal property taxes, meaning that Six Flags would owe $2,557,215 in unpaid taxes over four years (1999-2003). This ruling may also send ripples through the state which is also home to two of the largest regional theme parks in the country, Cedar Point and Kings Island. The court used a very strict interpretation of the tax law that allows businesses to declare non building structures that improve the enjoyment of the land upon which it stands as tax-free. The court stated that while the attractions contribute to the enjoyment of the land, they would not do so under a non-amusement owner. Ohio seems to think it is California or New York with this move, which could severely cripple parks in Ohio and saddle them with hundreds of thousands of dollars in taxes every year. Taxes are necessary for every state and municipality, but when they get out of control, as in this case, they hinder more then they help.

In other Six Flags news, Six Flags New England petitioned its municipality for three new attractions. If approved, Six Flags will build an upcharge attraction called “Slingshot”, a spinning roller coaster (probably similar to Primeval Whirl at Animal Kingdom), and a new waterslide called “Typhoon.” The three attractions represent a significant investment to a park that is still home to one of the best roller coasters in the world, Superman: Ride of Steel, but not much else. The New England park appears to be one of the only parks outside of New Jersey that’s getting new attractions aside from waterpark improvements. However, with $2.5 million dollars that may be due soon to Ohio, plans may change.

Texas-Sided Admission 1/10/05

The admission hike bug continues to scurry across the country as both Six Flags Fiesta Texas and Sea World San Antonio have announced that they will increase admission by $2 each. The Sea World move makes sense because most of the Busch parks have raised their daily admission by $2. However, the Six Flags move is somewhat perplexing. Six Flags rarely cares what other parks do when determining admission price, and they frequently try to make admissions so low that a season pass is cheaper than a daily admission at a competitor’s park. What’s also interesting is the timing of this move. Six Flags almost always determines the next year’s admission prices at the end of the previous season. So this move to match a price increase at a neighboring park is rather surprising. Perhaps this trend will spread across the country and Six Flags will actually compete instead of treading water.

It’s Good To Be The King
Reuters 1/12/05

In what has got to be one of the most audacious legal moves of all time, long-time boxing promoter Don King has sued the Walt Disney Company for defamation of character. The filing of the lawsuit is not surprising for a gentleman who spends more time as a plaintiff then boxing promoter, but the amount of the lawsuit is. A press release from Don King pins the number at $2.5 billion. Yes, that’s BILLION with a “b,” or $2,500,000,000.00. That's more zeros than you can find at a Star Trek convention (just kidding, I'm a HUGE trekker myself). The suit is aimed at ESPN’s SportsCentury profile of the boisterous boxing promoter. King’s lawsuit cites 10 statements made by the program that defamed King’s character. I didn’t know you could defame someone whose character is about as upstanding as that of the boxers he has represented (including jailbirds Mike Tyson and Riddick Bowe). King, who spent 4 years in prison after being convicted of beating a man to death, has an unprecedented amount of nerve by filing this lawsuit. I hope this ridiculous waste of legal resources blows up in his face, and Disney files a frivolous lawsuit counterclaim. “Only in America” can Don King make such a fool of himself!

Readers' Opinions

From Derek Potter on January 12, 2005 at 11:01 PM
I wonder why the Ohio courts dropped the hammer so hard on Six Flags. I've never heard tell of any of these kind of things at Cedar Point or Kings Island, at least not in recent memory. Then again, those two parks are golden boys in their respective counties, while Geauga county residents never had what one would call a good relationship with Six Flags during their tenure. Could it be a case of Geauga county playing a little hardball with the company that they never got along with? not to mention a company that left them hanging a little bit at the beginning of 2004. There is some validity to the court ruling, whether or not it has been enforced anywhere else in the state is something I would like to know. I'm not a tax expert though, so all I can do is speculate. As for the rides in question, I seriously dispute the fact that those rides even remotely contribute to the "enjoyment of the land."

Oh how I would love to be in the courtroom when the Don King case is presented. This lawsuit is more frivolous than the McDonalds hot coffee lawsuits. Don King saw the show and then saw how big the parent company was, and thats where the 2.5 billion came from. If you ask me, Disney should countersue King for 2.5 billion. Eisner could forever leave his footprint on American history for being the one who financially ruined the biggest swine in sports history. That would help to untarnish his legacy a bit in my eyes.

From Robert Niles on January 13, 2005 at 2:28 PM
The fact that parks can pack up and move attractions to othjer parks across the country (hello, Paramount!) certainly has an affect on the Ohio court's logic. But certain attractions cannot easily be moved. Nobody's gonna pack up Pirates of the Caribbean anytime soon. And an appealate court very well might decide that, rather than split that hair, they'll just declare amusement attractions real property and be done with it. Or, not. After all, if Paramount and Cedar Fair get a court to declare roller coasters and Tilt a Whirls real property, you better believe that every carnival operator in the state of Ohio will want the same classification for their equipment.

Russell, you mention California. And it is interesting to note that Disney pays next to zilch in property taxes for Disneyland, thanks to Prop. 13 -- which capped the year-to-year increases on property valuations for a piece of property, until it is sold. California's utterly ridiculous property tax system leaves it with some of the lowest property tax levels in the nation for land that's not been sold within the past few years. It's a large part of the reason why California's budget is perputally a mess. And why it's so damn hard to buy a home in California. (After all, existing homeowners get creamed on prop taxes if they sell and do not move out of state. So relatively few homes come on the market here.)

From Robert Niles on January 13, 2005 at 2:42 PM
Also... Don King is comedy gold. NBC Universal should make a bid with the court to get this "trial" moved to Universal Orlando. Throw it on a soundstage and make it a live attraction this summer -- with broadcast on CNBC for the folks at home. Get some celebrity C-listers with, um, extensive court experience to do color commentary, too.

Pure comedy goodness.

From Derek Potter on January 13, 2005 at 8:31 PM
wait wait....Don King's Disney trial...ABC's new reality show. I'd watch it...especially if they did a FOX like hack job on it.
From John Franklin on January 14, 2005 at 12:56 AM
I have a better idea: How about putting the Don King trail in the old Who Wants to be A Millionaire building at CA Adventures? That will sure bring in people to this park since nothing else has. And you can rename the building: Who Wants to be a Billionaire-Play It!
From Derek Potter on January 14, 2005 at 10:00 AM
Heres another story of tax hacking. Kennywood, located in West Mifflin, PA...a suburb of Pittsburgh, is getting the screws put to them by the local government. Here is a link

It's quite a shame really to see one of the oldest and most beloved parks in the world being treated like a redheaded stepchild. If I'm not mistaken, the park has been there longer than the town itself, yet they keep milking the cash cow. This kind of tax increase will surely affect park improvements.

Top 10 Attendance

  1. Magic Kingdom
  2. Disneyland
  3. Tokyo Disneyland
  4. Universal Studios Japan
  5. Tokyo DisneySea
  6. Epcot
  7. Disney's Animal Kingdom
  8. Disney's Hollywood Studios
  9. Universal Studios Florida
  10. Islands of Adventure