What is the Plan at Six Flags?

My assumption is that if Six Flags reports another bad year (which they probably will) the CEO will be ousted, again, and the board will bring in some other guy who has no experience running theme parks, again, who will probably also do a terrible job, and will be there for 3-4 years, again, then he will be out, again, and this cycle will repeat for the next 50 years or so.

Could be wrong, maybe they bring in someone with common sense who turns things around like Cedar Fair did in the 2010s. Wouldn't count on it though.

I think you answered your own question. Six Flags brought in Bassoul a couple years ago and he opted to make major changes in an effort to go after a new audience. What instead happened is he alienated the chain's regulars and wound up putting the chain in a worse position, so right now they're pretty much in survival mode and trying anything they can come up with to get out of the hole without losing even more money. They've apparently got some capital investment coming next year after doing virtually nothing of note in 2023, so perhaps that will help. If it doesn't, I agree that I'd expect to see either a partial or full sale of the chain in the not too distant future.

Six Flags has a plan? Maybe they HAD a plan, but it obviously didn't work out as expected. Of course every plan should have a plan B, which is clearly something Six Flags does have, so if they didn't have a plan B, they probably really didn't have a plan A either.

A rudderless ship being helmed by a seasick captain.

Disney is experiencing some turbulence right now, but I still think they are missing a great growth opportunity to pick up the Six Flags parks at fire sale prices and convert a fair portion of them to Disney "Adventure" parks. Disney is gradually losing the American middle class and this would be one way to reconnect with that segment of the market. The conversion process will have to be more than just a cheap overlay with Disney IP and some character meet and greets, but a modest and consistent investment in the parks with a focus on improving the customer experience could render a decent return on the investment.

I just don't think that would be financially viable Tim. Why would Disney want to dilute their current standing within the industry. Sure, they could pick up SF parks at a hefty discount, making it easier for them to connect with the core audience. However, what cost would that have to their existing business. If you can meet Mickey and Pals 2-3 hours from you house, why would you ever make a trip to Disneyland or WDW? Disney makes most of their money on hotels, F&B, and accessory spending, not on admission (most of that revenue is put right back in to operate the parks), allowing fans to visit a Disney park without outlaying for hotels, restaurants, and souvenirs from an occasional trip, how would Disney make any money?

Universal is taking a big risk with their small park model, and I just don't see Disney going that same route, because the magic of their business is in how special a trip to one of their parks can be.

I haven't done a financial analysis, Russell, but if Six Flags can make a profit (that's assuming they are making a profit), then Disney can only improve the bottom line with a few minor changes.

As far as Disney diluting their current standing within the industry, I'd say that they're doing a pretty good job of that themselves by transitioning the Florida resort into an upper middle class and upper class experience which does not cater to the budgets of the majority of Americans. Disney World is rapidly becoming a once-in-a-lifetime experience for most people. That situation plus the culture wars they find themselves caught up in is already hurting their brand.

I think the Disney "magic" is largely gone. Maybe it was just the Baby Boomers who grew up on a weekly dose of the Wonderful World of Disney and the occaisonal trip to the movie theater on Saturday afternoon for the latest G-rated Disney flick who felt that way, but nowadays there doesn't seem to be anything magical about a trip to a Disney park. It's a hassle.

I think that if they acquired the Six Flags chain and sold off the parks that have no hope of being modestly upgraded (Some of you are thinking, "That's all of them, you moron!") as well as the parks that are geographically incompatible (Six Flags Magic Mountain come to mind.), then they could use the rest of the parks to reconnect to a lost portion of their clientele. These proposed Disney Adventure parks could give people a taste of the famed Disney ambiance, and also be used to sell the upscale package of the Disney destination resorts.

Maybe it's a terrible idea, but I think of this as a return to the simpler days of the original Disneyland.

(Cue up the attack dogs with their "This ain't the 1950s, Boomer!" rants.)

I don't doubt that Disney could make massive improvements to the Six Flags parks and make them viable profit centers. However, doing that would undercut their existing parks, which represent the most profitable arms of the entire Walt Disney Company. Buying Six Flags and trying to integrate those parks as some kind of "value" proposition for the lower middle class that can no longer afford a WDW or DL vacation would only serve to reduce demand for the company's most profitable businesses. Some of that demand would shift to these value-priced "Adventure Parks" (as you put them), guests that get their fill of Disney through these less expensive regional parks all less likely (and less financially motivated) to spend big for that "once in a lifetime" DL or WDW vacation.

Honestly, I think Disney likes that their pricing has put their theme parks just out of easy reach of the middle class. Iger has noted that he thinks pricing has gotten a bit out of hand, but being just on the edge of affordability is probably where he would privately acknowledge where their experiences should be offered. Their pricing increases the mystique and desirability of trips to their parks and encourages guests to go all out when they do take a trip to a Disney resort, even if they can't really afford it. If guests can get what they think is a comparable "Disney" experience for a fraction of the price of the current Disney parks, why would they EVER make that once-in-a-lifetime trip?

I agree with Tim that its a golden time to buy a Six Flags park but probably would be better for Cedar Fair to expend. I don't think even Disney could afford it right now but if they did I disagree with you Russell that it would dilute their brand.

All it will do is attract more people that probably wouldn't go to Orlando since they can't afford it. They might not be able to afford Orlando but a smaller regional park is doable to them. I think Universal is thinking way ahead when Orlando prices out even more people so building smaller regional parks will help increase revenues. The smaller parks will become stepping stones until you can afford the real thing in Orlando.

You've got some good points there, Russell, but I tend to think of a Disney park like any other consumer item like cars and houses. We may want the BMW X5 or the 3,000 sq. ft. 4-bedroom, 3-bathroom house, but we'll settle for a lower end product until our budget allows us to enjoy the dream. Just my thoughts though, and I don't know if I'm typical or not.

@Tim - I tried to think of a way to provide a car analogy, but couldn't really think of one. I just don't think you can compare physical goods to experiences. Perhaps Apple offers a decently close analogy, particularly given the company's inability to get any traction within the value-market.

There's certainly been some erosion in the level of quality guests receive in a typical Disney experience, definitely when evaluated based on cost, but trying to provide a Disney-level experience on a Six Flags budget doesn't really seem feasible. Sure, they could just slap the Disney name on the parks and spruce them up on the cheap, but would Disney fans really accept that even if they're priced more economically? Disney has set a high bar for their customer experience, and scooping up the Six Flags parks and giving them makeovers won't change the reality that they would be lesser experiences than what you would get at DL and WDW (lipstick on a pig). I guess some people might not mind that, but I just don't think there's a way for Disney to shake their reputation and expectations guests would have for a Disney theme park product.

That's where I think Universal is going to run into trouble. I think if they're able to economically build their small-park model and maintain the level of quality they have established in their current parks (while still offering something different than guests can get in Orlando and Hollywood), they might have a shot. However, that's a very tiny eye of a needle to thread, though made easier because their new parks would be built from scratch and not reliant on reworking existing parks/plans.

Maybe in the 90's when Disney was dramatically expanding their footprint both in the US and abroad, a purchase of Six Flags might have been a solid move (if only from a real estate perspective). However, where the company is right now and the reputation they've established, trying to make that move today would be throwing good money after bad. The regional theme park model is not what it once was as evidenced by the recent financial results from Cedar Fair and Sea World. People are willing to pay more for that extra special experience, and if you offer them a Disney-quality experience closer to home and at a significantly reduced cost, it would totally undermine their current business model, which has already proven to be highly successful, even through a crippling pandemic.

I can tell you as someone that has way more experience with managing both Six Flags Parks and managing Disney Parks than i'd like to admit, there is no way they will ever buy Six Flags. Seasonal parks is not what Disney does, its a very different kind of business, and there is no way Disney's management could ever operate Six Flags profitably. They can't even operate Paris and Hong Kong profitably and those are two of the biggest markets in the world. I'll leave it at that lol.

Also on the note of Cedar Fair I 100% disagree that they should buy SF. It may not even be allowed by the FTC because it would basically give them a monopoly with almost every major seasonal park in the country, and consolidation is really never good for anyone other than the shareholders. Why would Cedar Fair bother trying to be good if they have no one to be compared to? I've been around enough theme park VPs to know they will ring people out of every penny with no regard with anything other than their bonus and promotional opportunities, so giving them even more pricing power due to monopoly is not a good idea.

There is no reason for SF to not be successful. They have the biggest park in the northeast megalopolis market with basically unlimited land placed right on the instertate inbetween NYC and Philly, the only park in the Chicago market, and (arguably) the second biggest park in the LA market. And a lot of their other parks are basically on their own with no competition in some of the other biggest and growing markets in the country (Atlanta, Dallas, San Antonio, Norcal). They also have the only park in the second biggest market in Canada. The reason they are always in so much trouble is because of mismanagement and that runs deep. They need new leadership at the corporate level preferably someone that actually knows how the theme park business works unlike all the people they have been hiring the last 25 years.

it would be next level funny if the FTC begins earnestly enforcing anti-trust laws against regional theme park chains

@Russell - Using Apple as an anology to Disney in respect to a value/premium market model is reasonable. I'm just not sure that Disney could possibly damage their premium brand image if they made a move into the value market with an acquisition of Six Flags. From my perspective, Disney is already into so many markets; TV, movies, theme parks, sports entertainment, merchandising, etc. that I just don't think of them as a premium brand anymore. Nowadays, to me, they're just another brand trying to make a profit.

@the_man2 - I'm interested in hearing more on why you feel the business model for seasonal parks differs that much from the destination resorts to the point that they seem like entirely differnet businesses. Can you offer a few points of difference?

It really is a shame as Six Flags Great America was a fun park to visit when younger but now hear horror stories on how miserable the experience is from food to service and just seems no way to break out of this cycle. They can use the pandemic as easy excuse but this company is just a mess.

I think "Disney buying SF" is a fun exercise for those of us who are fans, but it is not something that Disney would even consider for a multitude of reasons. First, Disney has the $9 billion question of Hulu. They need to decide to buy out Comcast or offer to sell their 66% to Comcast. Judging by Iger's comments on CNBC two weeks ago, it does not appear that Disney is in the financial shape to be taking on another $9 billion in debt. Iger is talking about needing strategic partners for ESPN as cord cutting continues and the fact that linear TV is not a "core business." This leaves Disney in a catch-22...they have these linear networks that they own (and some they just purchased as part of the Fox acquisition) that no longer hold the value they once did. Some of the assets Iger has purchased are very distressed, which would hint at moving more to streaming. The problem there is that Disney+ is a loss leader, losing billions of dollars a year, and the fact that the only reason to own Disney+ if you don't have a 5 year old (Marvel and Star Wars TV shows) is going to have a significant reduction in productions. These leaves new release duds as one of the last new content souces on the platform. Add in that theatrical, even with the huge grosses (for some releases) has lost just shy of a billion dollars over the last ten releases. Pixar and Lucas are heavily damaged brands currently, and Marvel is no longer a license to print money. Theme parks have all of the issues that have been mentioned before, including a subset of the population that is just done with the brand for some of the more "liberal themes" in their content. (This is not a political post, and I don't want to debate the intelligence of upsetting a subset of any customer base. Disney has made a decision, it's their right as a company, and if the shareholders are happy they can continue having gay rock creatures in their Marvel movies...Korg).

The biggest reason, outside of not having the money and having way too many of their own problems to attempt to fix without taking on someone else's problems) is precisely what Russel said... They are no longer really making money on the parks. The parks are the feeder into room nights, food, and over-priced souvenirs. I experienced a strange phenomenon at Cedar Point two weeks ago. In line, two families were talking about their recent trips to FL. The Disney family talked about the work, the hassle, the expense, and paying huge prices to sleep on a Murphy bed at Caribbean Beach. The Universal family talked about the fun, the great room at Cabana Bay, the food at Three Broomsticks, etc.. Having been to both WDW and Universal this year...I felt the same way as those two families. Disney can't build enough hotels and raise the food prices any more at SF. There is no juice to squeeze of out of that lemon. Not to mention, it would bleed their existing parks... why go to DWD is you can drive a few hours away for DWD-Lite in Chicago or Atlanta? Disney has a lot of problems, but fixing all of the issues at SF should not be one of them!!

Six Flags is good for a Coke can cheap ticket, hit the big coasters, and go home. They could really do nice things with them if they wanted, but it will take much analyzing the situation to do so. Fiesta Texas seems like the only one that is well maintained. Some of the other ones are really going downhill. Really, if you go deep in the history, Six Flags was a cheap knockoff of Disneyland right down to the claim of the 'worlds first tubular coasters."