Published: May 22, 2006 at 6:02 PM
All I can say is this... Ha I knew it. I saw this coming down and I wish I would have had some cash to buy Cedar Fair stock a few days ago. Mr. Kinzel is retiring at the end of 2007, and his legacy with Cedar Fair is now cemented.
I've always been one of the first in line to sing the praises of Cedar Fair. They have always been one of the best run chains in the business. While some of their parks are indeed not on the level of others, they have made a lot of money for themselves and their investors over the years, while also creating some of the best parks around. This is a bold move for them, sure to take their company to new heights.
That being said, a few questions remain in my mind. One, what about the Nickelodeon license. To be honest, I could care less about the other franchises Paramount had to offer. Not to diss Snoopy, Warner Bros, or the "royal highness" Disney, but the Nick franchise is arguably the biggest and most recognizable one out there to the kids. Are they going to keep it? For the forseeable future the answer is said to be yes (reportedly the next four years), and it should stay that way. If Cedar Fair wants to elevate itself even further and maintain the success Paramount had, they should find a way to keep that franchise. Universal's use of the franchise has recently been trivial at best, while Paramount Parks, namely Kings Island, have invested millions into their properties with the nick brand. That emphasis has driven attendance for the past few years, in a time when attendance wasn't the greatest for the industry. If Cedar Fair is smart (which they usually are), they will take a long hard look at bringing Nickelodeon to all the Cedar Fair parks.
Number two. I live in Ohio, and this little piece of news means that Cedar Fair will be operating all major parks in Ohio. I am a huge fan of Cedar Point, and I'm happy that they polished up the tarnishing Geauga Lake real nice as well. Kings Island on the other hand, doesn't really need that much help in the way of operations. In fact, they really don't need much help at all (except for a new coaster..please I'm begging). That being said though, I hope that the new debt load Cedar Fair (and their backers) now has doesn't diminish the quality of Kings Island or any of the other parks. Being a bit of a selfish person, I also hope that they continue to invest in Kings Island the way Paramount did. I'm still not sure how I feel about the monopoly of the Ohio market, because monopolies are usually not good for quality, innovation, and creativity. I hope that Cedar Fair doesn't get complacent in markets where they have no competition.
Third, this acquisition will make 12 parks owned and operated by Cedar Fair. That's almost double what they have now. That's a large expansion and a lot of money now on their backs. TPI's favorite park chain Six Flags' cross to bear was and still is the enormous amount of debt. $1.25 billion bones is a lot, and good management, wise, aggressive expansion, and attendance is what it will take to maintain hold on the marketplace and keep their parks on top. Hopefully they utilize some of the good local management teams at the Paramount parks for this venture.
Luckily, Cedar Fair has a history of being able to supply those qualities. Despite my questions, I'm excited about this venture for my favorite park chain. This franchise represents a huge oppurtunity for Cedar Fair. They now pretty much own Ohio and the midwest, and are in a position to compete for the Virginia/DC/Maryland marketplace. Busch Gardens and Six Flags should take notice about their new friendly neighbors in Richmond.
(Edit): Some footnotes on the 5/22/06 conference call
-Nickelodeon license deal is for four more years, with option to renew at end. Cedar Fair will examine bringing Nick brand to all Cedar Fair parks.
-Season pass for all parks should be introduced in 2007 (I'm in heaven on that one)
-Kings Island and Cedar Point will not be in competition (not sure what that means yet, although technically they are in different marketplaces)
-Also with the deal came the management contracts of Bonfante Gardens and Star Trek the Experience in Vegas.
-Paramount name and brands could stay, but it's under a different deal than Nickelodeon.
-Parks will maintain a General Manager, not a regional brand manager
-Kings Island and Kings Dominion will for sure be keeping their names.
-The new Great Wolf indoor waterpark resort next to Kings Island will remain with CBS. (Wouldn't be surprised to see Cedar Fair go after that one)
-A little off the subject, but the announcement of Cedar Points 2007 coaster project will be announced in August.