Six Flags and Gulf Finance B.S.C. Sign Exclusive Licensing Agreement

[GAcoaster]

Press Release From Six Flags:

 

Six Flags and Gulf Finance B.S.C. Sign Exclusive Licensing Agreement

Tuesday April 15, 9:00 am ET

Collaboration Explores Bringing the Six Flags Experience to China

 

NEW YORK, April 15 /PRNewswire-FirstCall/ -- Six Flags, Inc. (NYSE: SIX - News), the world's largest regional theme park company, announced today it has entered into a one-year, multi-million dollar exclusivity agreement with Gulf Finance House B.S.C., a publicly traded Islamic Investment Bank in the Kingdom of Bahrain. Under the agreement, Gulf Finance will pay for the exclusive right to license the Six Flags brand and related intellectual property for theme park development in the People's Republic of China. Additionally, the two parties may collaborate on the future construction of a Six Flags-themed luxury resort. The deal was unveiled today by Six Flags President and CEO Mark Shapiro and Gulf Finance House Acting CEO Peter Panayiotou.

 

"This partnership underscores the renewed health of our brand and the opportunities that now lie ahead for our unique thrill park experience," said Shapiro. "We're excited about the potential of collaborating with Gulf Finance House to bring the new Six Flags and its recharged product to an entirely new audience."

 

"We were proud to facilitate Six Flags' introduction to Dubai and are now thrilled to be partnering with Six Flags ourselves," said Panayiotou. "Our goal is to create an exciting, state-of-the-art tourist destination in China that will draw travelers from around the globe. Six Flags is recognized as a world leader in the entertainment and theme park industry. The experience and brand loyalty they bring to the table is unmatched."

 

China is the world's largest and most populous country and quickly becoming a preeminent destination for international travelers. According to the World Travel and Tourism Council's 2006 Report on China, the country's travel and tourism industry generated $353.7 billion in 2006 and is expected to grow to $1.3 trillion in 2016. As China's economic and industrial expansion evolves, its need for imported goods and services also will increase. Welcoming the world as the host of the 2008 Olympic Games this summer, The People's Republic of China is poised for a Six Flags venture and offers a ground-breaking opportunity for the company to create a new generation of park-goers on a global stage.

 

About Six Flags, Inc:

 

Six Flags, Inc. is the world's largest regional theme park company with 21 parks across the United States, Mexico and Canada. Founded in 1961, Six Flags has provided world class entertainment for millions of families with cutting edge, record-shattering roller coasters and appointment programming with events like the popular Thursday and Sunday Night Concert Series. Now 47 years strong, Six Flags is recognized as the preeminent thrill innovator while reaching to all demographics -- families, teens, tweens and thrill seekers alike -- with themed attractions based on the Looney Tunes characters, the Justice League of America, skateboarding legend Tony Hawk, The Wiggles and Thomas the Tank Engine. Six Flags, Inc. is a publicly-traded corporation (NYSE: SIX - News) headquartered in New York City.

 

About Gulf House Finance:

 

Founded in 1999, Gulf Finance House (GFH) has grown rapidly to become one of the most respected investment banks in the Middle East region in terms of the quality and innovation of its product offerings. Over an eight-year period Gulf Finance House has successfully launched economic infrastructure development projects and investments with an aggregate end value exceeding US$20 billion and received numerous awards for its innovative approach to Islamic banking and finance. Its shares are actively traded on the London Stock Exchange (GDR), the Kuwait Stock Exchange, the Bahrain Stock Exchange and the Dubai Financial Market. 2007 was the most successful year in the banks' history, closing with a net profit of US$ 340 million, an increase of 61% compared to the previous year.

 

GFH is the first Islamic investment bank to be awarded an investment grade credit rating by Standard and Poor's, who have awarded the bank with an investment grade credit rating of BBB-. Moreover, Capital Intelligence (CI) has rated Gulf Finance House's Foreign Currency Long-Term and Financial Strength at BBB+.

 

In reflection of its international reputation, Gulf Finance House has won numerous local and international awards including "Best Investment Bank" for each of the past three years, awarded by The Banker Middle East, "Best Islamic Investment Bank" by World Finance in 2007, "Bank of the Year 2006" awarded by Arabian Business Magazine and "Best Islamic Real Estate Finance House" awarded by Euromoney.

[GAcoaster]

Once again, this is good news in that they now have another relationship with a financier with DEEP pockets.

[darkridedan]

When did Gary Story change his name to Mark Shapiro? It sure would be nice to see a benefit from all these deals one day. The guy can't even keep open a bumper car ride in his flagship park.

[GAcoaster]

There's a BIG difference in that Shapiro/Snyder have bigger ambitions than just running theme parks. Most analysts believe this is just a stepping stone to building a media company, and they are making the right moves.

 

This (like the other deal) only benefits the U.S. parks in the long run in that here they have investors spending all kinds of money on these projects, with little to no risk to Six Flags, but lots of benefits in the form of new revenue streams for licensing the Six Flags name and a free sandbox to try new ideas and concepts on someone else's dime. If things work, they import them to the U.S. parks, and if they flop, they lose nothing. Better to do that than have investments like Operation Spy Girl that flop and they have to take the loss.

[darkridedan]

A strong media company is good but he bought an amusement park chain. He should invest more money back into them, into us. He's taken 10 mainstream rides away from a flagship park and he's returned one. I feel ripped off.

 

From 1999-2005, I used to eat breakfast, lunch and dinner in the park. I would buy souviners and ride pay attractions. But that was in a time when the park had over 40 mainstream rides and the price of admission was around 40 dollars. Now there are under 25 mainstream rides and the price of admission is over 60 dollars. I feel better with investing in Wawa since they increase their selection over time. Since I've been a season pass holder, I've never been the type to bring a lunch and dinner or go out to 537 to eat. I've always bought a three park season pass, even in the years that I worked at the park. This year, I purchased a two-park pass and I won't even pay for a parking pass. A group of us will go to the park in one car and go in together.

 

It's not even a matter of how many rides are missing, how many show venues are closed or the price of admission. It's a matter of how many rides are never replaced. It's a matter of the chain investing in a locker system or cabanas when they won't invest in a scrambler, a paint job for the Big Wheel or a theater show. It's a matter of closing rides that see plenty of guests while employees stand in front of game stands or kiddie rides in hopes that guests will spend more money.

 

I know Premier and Time Warner and others before them made their fare share of contributions to Six Flags problems. TW invested short term when they built Viper and Chiller which couldn't even last a decade. Premier built Superman and Kingda Ka, which brought fewer guests to the park than less expensive, reliable rides. However, they took profit from the guests and invested it back into their parks. Shapiro and Snyder only seem interested in lining their own pockets. Their destiny seems more aligned with a Wesray than a Time Warner. At least we have the Scream Machine!

[Up_Up_and_Away]

None of us are HAPPY about the loss of rides, we're just handling it well.

[GAcoaster]

From 1999-2005, I used to eat breakfast, lunch and dinner in the park. I would buy souviners and ride pay attractions. But that was in a time when the park had over 40 mainstream rides and the price of admission was around 40 dollars. Now there are under 25 mainstream rides and the price of admission is over 60 dollars.

 

You're absolutely right, which is why the company is over $2 BILLION in debt and has had to remove rides. They were not operating a sustainable business model...they neglected maintenance and upkeep on those rides and the park infrastructure in general which is one of the main reasons why things are being removed now. There is no money to fix and replace those things.

 

Having spoken to park management, the removal of these rides is not their idea, and is the last thing in the world they want to do, but it's just an economic fact right now that they have to tighten their belts.

 

As for the price increase, that's really not a true price increase when you realize they still literally give away park admissions with BOGO offers and other coupons. I would imagine the average admission ticket after discounting is still around $40. Shapiro has mentioned several times he would rather get rid of discounts altogether, but at GA and MM the GP expects them, and won't come unless they are offered, which is why the prices may have been raised but in the long rung they really remained the same when discounting is factored in. Anyone who pays full price for a ticket to the park is a sucker because there are ALWAYS discounts available.

 

[The Master]

You're absolutely right, which is why the company is over $2 BILLION in debt and has had to remove rides. They were not operating a sustainable business model...they neglected maintenance and upkeep on those rides and the park infrastructure in general which is one of the main reasons why things are being removed now. There is no money to fix and replace those things.

 

Having spoken to park management, the removal of these rides is not their idea, and is the last thing in the world they want to do, but it's just an economic fact right now that they have to tighten their belts.

 

As for the price increase, that's really not a true price increase when you realize they still literally give away park admissions with BOGO offers and other coupons. I would imagine the average admission ticket after discounting is still around $40. Shapiro has mentioned several times he would rather get rid of discounts altogether, but at GA and MM the GP expects them, and won't come unless they are offered, which is why the prices may have been raised but in the long rung they really remained the same when discounting is factored in. Anyone who pays full price for a ticket to the park is a sucker because there are ALWAYS discounts available.

 

The SF chain sure does have a ton of discounts. They have even been criticize of having too many discounts causing many of their parks to be used as cheap daycare by locals which in turns makes them crowded with unsupervised kids and teens. I heard this a while ago and can't remember where, maybe screamscape? But if they don't have the discounts then less people would show up which means less money and so the chain can't do that. I know the park promised increased ride capacity to make up for the lost rides. But I have yet to seen it, in fact last sunday was the first time ever I saw Kingda Ka running only one train (all the other coasters were running two). In the end SF is caught between a rock and a hard place but some of the things they are doing just seems to be grapping at straws. Hopefully things will turn around and they get the money to put new rides in their parks soon, I know they have been removing rides out of their other parks too like SFMM. Also many of the removed rides from 99 to 04 were the War on Lines rides that were shipped to other SF parks.

Edited April 16, 2008 by The Master

[darkridedan]

Oh, I know that removing rides at SFGAdv was not the park's idea.

 

The part that bothered me about the article, besides the "PR speak" was this line:

Additionally, the two parties may collaborate on the future construction of a Six Flags-themed luxury resort.

 

I'm not sure if they have worked on the details. My fear comes from Snyder and Shapiro's approach to SFMM and SFGAdv. I wouldn't be surprised if they ripped out rides at existing parks to send them over seas. I know this doesn't make any sense, but it sounds like them.

Edited April 16, 2008 by darkridedan