(Man, I wish I could buy the place...I have so many ideas for making it a better theme park!)
I will say this: if Six Flags somehow scrapes out enough dough to purchase WoF I will kill myself.
Ultimately, though, I've long targeted the smaller Cedar Fair and Six Flags parks as candidates not to survive this downturn. WoF, ValleyFair and CGA are among those.
WOF is not great, by any means, but it deserves better than to become another casualty of a poorly run federal/local government that is spending wildly out of control. The place has a rich history and deep roots in the community. I would love to see Lamar Hunt's family (the original owners) step up to the plate and reinvest in the park. When they ran the show, the place was really top notch.
Again, CF has been investigating selling WoF for years - literally since they bought the place - so we'll just have to see if the story has stronger legs this time.
Too bad Disney or Universal won't come swooping in to establish a Midwest presence....
Any idea on what they expect to recoup in the sale, if anything?
More likely, Cedar Fair just doesn't want to spend the money it will take to make WoF a premiere Midwest amusement park - at least $100 mil in additional capital is my guess to get the park above its current two-state "regional" status. IMHO, that $100 mil would be spent on at least three new coasters (gotta get that coaster count up), a complete re-theming of the Europa section (including up to a half dozen new attractions to replace the current slate of circa 1973 relics), and about $10 mil in love given to the kid's area of the park (Camp Snoopy) which currently ranks second behind the food court play area at the local mall. Following those immediate expenditures, at least one new attraction should be added per year to keep consumer interest high, which is what used to happen when Lamar Hunt owned the park.
Cedar Fair probably is not up to that sort of commitment. It is easier to sell the park than to build up their brand in the Midwest.
Sadly, we live in a world where our Federal Government frivolously and foolishly prints and spends money without a thought or care, and yet not one penny of those earmarked funds ever makes into the things we the people love the most: our theme parks.
Ladies and gentlemen, it is time for a REVOLUTION!
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?
This is the same story that I've watched repeat itself dozens of times in the newspaper industry: You've got a solid, profitable local business that's not making an obscene amount of money, but enough. It serves its community well, even if it is not an international draw.
But the corporation that owns it is deep in debt, and needs all of its local businesses to be making obscene profits, in order to pay off the corporation's debt.
So, in order to balance the corporate account sheet, the corporation looks to sell the local business to raise cash.
The problem? No buyers. In acquiring all these local businesses, the corporation became one of only a small handful of companies still in this business. All the others sold out to the handful and went away. And the other companies among the handful face the same problems.
So the corporation either...
Throw in a national deflation trap because businesses in every industry did the same damn thing and the Fed's already cut interest rates to near zero and that hasn't helped, and the situation for borrowers becomes even more dire.
Six Flags and Cedar Fair, as corporations, are screwed -- even though many of their individual parks remain profitable and highly desirable businesses.
The best solution, for theme park fans, newspaper readers or anyone else affected by this type of problem, is for the corporations involved to go bankrupt -- for their debts to be discharged, and the local businesses to be reorganized either as independent entities, or as part of a new corporation under fresh management, with no debt burden.
But current management wants to save its skin. So it will bleed the local businesses near to death to avoid bankruptcy. Or it will attempt to limp along under Chapter 11, rather than accept Chapter 7. Ironically, by doing this, the corporation is destroying the asset value of these currently viable local businesses, increasing the chances that when the corporation finally goes defunct, it won't have *any* profitable assets of worth to anyone. And its consumers will be totally screwed.
Funny thing is, I don't even care if CF owns WoF, I just don't want the park to be closed down completely. Maybe I should run an add in the paper and try to get 10,000 Kansas City area people to invest $5,000 each and offer Cedar Fair $50 mil for the property. Local ownership would ensure the park stays open, and the fact that WoF is profitable now means it can continue to operate without a hitch.
Anyone interested in a grass roots effort to buy a theme park?
A family who used to live down the street from us, sold their house after redoing their 2nd floor, adding a new part to the 2nd floor, and repainting the house. They get a profit for it...
Based on the info I have received, I am leaning toward Derek's explanation of what is going on right now with these potential sales. However, only time will tell....
As a side note, Silver Dollar City is a superior THEME PARK to WoF, but WoF has more coasters. If your measuring stick is coasters, then WoF wins (slightly), but in every other category, SDC is clearly the best park in the state.
And please, don't get me started on SFSTL...it is the worst park I have ever visited.
I think they are too smart to have a fire sale, but are being preemptive with their actions. If you read the press release, you will notice the words "long term" used a few times. If they can still continue to properly service debts, make cash distributions to shareholders, and run the parks at a profit, then they will keep WoF and everything else. What I do think is that Cedar Fair can't afford to have a bad year, and given the economic climate, it's a very real possibility that they will...although IMHO, I think that they will be just fine if they aggressively pursue the public.
This company has a good amount of debt to manage, but the parks aren't losing money, and the balance sheet isn't a total wreck. It's not like Six Flags, where operating costs were way out of control and the parks were losing big money and lots of attendance in normal economic times. I know that there are a lot of potential problems, but that's exactly what they are....potential. They aren't eminent, and devaluing the company by selling off parks isn't the way to deal with a potential problem. I think that management understands that, but I also think that they don't want to be caught off guard, so I understand their announcement that the parks are for sale. That still doesn't mean that they will sell them.
While parent company Cedar Fair Entertainment is considering options to possibly sell Worlds of Fun & Oceans of Fun, rest assured, the Midwest’s premier entertainment destination is here to stay. In 2009, Worlds of Fun is investing in its future with a new $8 million block-buster ride and VIP perks for loyal Season Pass holders.
I guess they wanted to calm us locals down a bit! ;)