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Cedar Fair purchases Paramount Parks

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Published: May 22, 2006 at 10:36 AM

Cedar Fair, which owns and operates seven amusement parks and five water parks, including flagship Cedar Point, will acquire the Paramount Parks chain from CBS for $1.24 billion in cash.

Paramount's parks are Canada's Wonderland, near Toronto, Canada, Kings Island, near Cincinnati, Kings Dominion, near Richmond, Va., Carowinds near Charlotte, N.C., and Great America in Santa Clara, Cal. The Paramount Parks generated revenues of approximately $423 million and had aproximately 12.2 million guests in 2005. Combined, the two park chains generated approximately $1 billion in revenues and had approximately 25 million guests in 2005.

See Cedar Fair's press release for more.

Could this be a good or bad thing? You decide.

[Editor's note: The *huge* question: Snoopy or Nickelodeon? Or, somehow, both?

Cedar Fair's kids' lands are themed to the "Peanuts" franchise while Paramount's are themed to CBS's Nickelodeon. CBS also licenses the Nick characters to the Universal theme parks, which do not compete geographically with the Paramount Parks. But Cedar Fair's Knott's Berry Farm is in the SoCal market with Universal Studios Hollywood, so a conflict would emerge if the entire Cedar Fair chain picked up the Nick license.]

Readers' Opinions

From Jason Goldsmith on May 22, 2006 at 11:36 AM
It could go either way, but I would think it would be a good thing since Cedar Fair is more 'amusement park' oriented, and Paramount Parks is a subsidiary of CBS, which probably means CBS doesn’t give as much focus/spending/advertising/etc. towards the parks as it does towards their TV shows.
From Pete Brecht on May 22, 2006 at 12:03 PM
As a King's Dominion passholder, I think this is a great thing! For one thing, the Cedar Fair parks that I've been to have all been better-run than King's Dominion, so I would hope that CF's operations expertise can help here.

Furthermore, I suspect that the slippage in guest experience that I've noticed at King's Dominion the past couple of years is partly due to uncertainty as to what direction the Paramount parks will go depending on who purchased them. Now that it's official, maybe the employees will be more motivated.

Finally, now I can use my King's Dominion pass to get into Cedar Point!

Who knows, maybe King's Dominion will wind up getting a gigacoaster some day after all....

From Adrienne McDonald on May 22, 2006 at 12:23 PM
I think it'd be okay IF they don't raise the prices right away without adding other coasters, etc. It'd seem really selfish & sorta greedy if they did just because they're "Cedar Fair" & own
x-amount of theme parks. They need to look at what each park offers. Even six flags doesn't have the same prices at all the parks.
From Derek Potter on 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.


From Dustin Kern on May 22, 2006 at 8:50 PM
I think that this is excellant news to everyone who attends any Paramount park. Cedar Fair is well known for their outstanding parks as well as attractions. Now that they have aquired the Paramount chain, all that we can expect is for every park to get better attractions. Also, we can expect the parks to operate much smoother and some of the attractions that need some desperate attention will get that or will be removed is they aren't that important. I'm very excited to see what will happen in the next year or two.
From Ted Heumann on May 24, 2006 at 11:16 AM
This is the WORSE news! Paramount had some REALLY good stuff in the pipeline. Some stuff that could start to really give Universal and Disney a run for their money.
Cedar Fair is just what their name implies, a fair. Besides roller coaster, they have nothing more than your local state fair.
Paramount, Universal and Disney are theme parks, Six Flags and Cedar Fair are amusement parks. There IS a difference.
Knotts USED to pretend to be a THEME park, but Cedar Fair turned it into an AMUSEMENT park. Cedar Fair ruined Knotts! And they will probably work their "magic" on Paramount too.
From Russell Meyer on May 24, 2006 at 10:23 PM
Since I was in Vegas when this deal was announced, I was pretty surprised when I was walking through the Star Trek Experience Backstage Tour to see a memo in the backstage area alerting cast members to the purchase.

Let's not forget that the Star Trek Experience at the Las Vegas Hilton was built at a staggering cost of $70 million and draws thousands of visitors each year.

As far as the major formerly Paramount Parks, I am not sure if this merger is such a great thing. One thing for sure is that Cedar Fair got a great deal at less than $250 million per park. I will see what the Kings Dominion crew think about the merger tomorrow at the Italian Job Stunt Coaster media preview.

From Jeremy Ferrell on May 25, 2006 at 8:39 AM
Living in Ohio as well, I agree pretty much totally with Derek. I do share the concern that, in Ohio at least, this deal gives Cedar Fair ownership of all the major parks in the state. Time will tell on this--Cedar Fair has an excellent reputation for offering safe, top-quality rides, clean parks, and friendly staff while still keeping prices on tickets, food and lodging reasonable. And, during an economic slump, they are the first(and only, so far?)company to cut their margin a bit while still providing the same quality experience that they are known for. I don't think they'll risk that reputation, especially in the state where their flagship park is located.

As far as the licensing that Cedar Fair acquires with the parks, this can only be a good thing. The one and only complaint that I and others in the "30+ with youngsters" group have had with Cedar Fair lately is that they appear to be painting themselves into a corner where coasters are concerned. I love coasters with a passion, but they've kinda reached the "thrill barrier", so to speak, with Millenium Force and Top Thrill Dragster. At the heights and speeds these types of rides attain, the over 30-crowd has to start thinking about health and safety issues. And, let's face it, I can't exactly take my 5-year old on the Dragster, or even the Raptor. So, theming and family attractions have been a growning concern for many, and the Paramount and Nickelodeon licenses are exactly the break that Cedar Fair needed in this arena. They now have access to two national, immediately recognizable franchises to draw from when it comes to theming and designing attratcions, instead of trying to come up with their own ideas from scratch(Disaster Transport? Bueller?......bueller?). So I'm very optimistic about the future on this particular deal.

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