Published: March 10, 2009 at 8:28 AM
The one thing that I do know about this sale is this. They aren't in a big hurry to sell. They will accept offers, but they won't lose out on this deal, so who knows how long the Cedar Fair flag will fly. The big park companies who do have the money will likely throw their money at the A-B parks sweepstakes first.
It's strange that they would spend 8 million on a new coaster at WOF only to turn around and sell it. I understand that the economy isn't the greatest, but they should anticipate some decent numbers this year for the park with Prowler despite the recession. I'm calling this a precautionary listing. If for some reason the company's numbers go in the toilet this year because of the economy, they presumably have a way to get some quick cash. Cedar Fair is a financially sound company, but is still carrying a lot of debt from the Paramount purchase, and doesn't want to go down the Six Flags path. If the season crashes, they will sell for cheap. If it doesn't, than they will hold out for the best bid.
As for Valleyfair, perhaps they think the park has no more room to grow. It is Minnesota after all, and the season is short. However, there is no competition, so if it's a profitable operation, why sell it now when buyers are few and money is tight? Again, I think it's an insurance policy. They are anticipating that there may be some rough times ahead for the company, and this is their plan. They have managed to sell a small chunk of the Geauga Lake property, but the real estate market in Ohio is in the toilet, especially in the Cleveland area. Great America has been tied up in public and legal matters for a while. They don't really want to sell, but the 49ers and their new stadium have caused major issues with parking and so forth, and Cedar Fair doesn't want to sell at the 49ers offer price, which is a joke...so there you have it, Cedar Fair with a multiyear lease and an NFL franchise nose to nose...with the decision going to the city.
I think that it's good that Cedar Fair is looking to the future, but I'm not sure they will have to pull the trigger on these sales, because while it may be a tough year, I don't think that the horrible season they are anticipating will happen. Staycation baby...staycation....right James?