Six Flags Corporate News

[Tbone112499]

So it looks like the drive thru safari really helped them maintain/boost single day ticket sales. I can see the drive thru lasting a little longer than expected because of that. I wonder too what parks they're talking about when they mention investing with new rides in "markets with high growth potential".

[Medusa42]

Mike Spanos is out as CEO.  This was negotiated over the weekend and reads like he was forced out by the Board.  New CEO is Selim Bassoul from the Board of Directors.

 

https://www.sec.gov/ix?doc=/Archives/edgar/data/0000701374/000119312521329004/d262198d8k.htm

 

https://investors.sixflags.com/news-and-events/press-releases/2021/11-15-2021-120113251

 

[GAcoaster]

Interesting-- and now be ready for a sudden change of direction in corporate decisions... 

[Medusa42]

There is some speculation that a merger or acquistion could be imminent.

https://twitter.com/JonLitt/status/1460253851676819458

Quote

Six Flags $SIX M&A candidate after abrupt exit of CEO if playbook of prior CEO departures at $CONE, sold today, and $HTA which is running a strategic alternative process. L&B has a position in SIX.

 

Which reminded me of a discussion from a month ago about Six Flags corporate booking hotel rooms near Kennywood / Palace Entertainment HQ.

https://old.reddit.com/r/rollercoasters/comments/q41oru/six_flags_officials_in_pittsburgh_other/

Quote

So I work in hotel market analysis in Pittsburgh. Basically, I spend all day figuring out who is coming into the market and why.

I've noticed a sudden and consistent booking pattern of rooms in the Pittsburgh East market (the area Kennywood is in) from the Six Flags Incorporated travel account.

Seeing that Parques just built an office in Pittsburgh I would be surprised if they sold Kennywood to Six Flags, but they're here for something. I just don't know what!

It isn't a ton of rooms, but it seems like a few people have been making regular trips out since at least mid-August.

 

[GAcoaster]

Interesting-- I know Parques hasn't been doing particularly well, having cash flow issues. 

 

I wouldn't be too surprised to see other parks and chains in mergers and acquisitions right now as well. The industry was shaken up quite a bit by the pandemic. 

[Medusa42]

H Partners Management has gone on a buying spree since the CEO change and now owns 10.1% of the stock.

https://otp.tools.investis.com/clients/us/sixflags3/SEC/sec-show.aspx?Type=html&FilingId=15392056&CIK=0000701374&Index=10000

 

https://otp.tools.investis.com/clients/us/sixflags3/SEC/sec-show.aspx?Type=html&FilingId=15392058&CIK=0000701374&Index=10000

[Medusa42]

The reorganization begins:

"As part of a strategic reorganization, on December 3, 2021, Six Flags Entertainment Corporation (the “Company”) announced that it eliminated the role of Executive Vice President, General Counsel & Chief Administrative Officer. In connection with the elimination, Laura W. Doerre will depart her role as Executive Vice President, General Counsel & Chief Administrative Officer of the Company, effective December 12, 2021 (the “Separation Date”), following a transition of her duties. On December 3, 2021, Ms. Doerre and the Company entered into an Agreement and General Release (the “Doerre Agreement”). Subject to Ms. Doerre’s compliance with certain obligations under the Doerre Agreement, including certain re-execution and non-revocation requirements, the Doerre Agreement provides that Ms. Doerre will be entitled to receive, among other things, (1) payment of her full 2021 annual bonus in accordance with the Company’s procedures for the payment of executive bonuses and payable at such time as bonuses are ordinarily paid; (2) payment of a cash amount equal to the sum of one year’s base salary and target bonus within 60 days of the Separation Date; and (3) accelerated vesting of certain outstanding unvested equity awards held by Ms. Doerre pursuant to the terms of her employment agreement with the Company. The Doerre Agreement also contains a release of claims against the Company and its affiliates."

 

https://otp.tools.investis.com/clients/us/sixflags3/SEC/sec-show.aspx?Type=html&FilingId=15399570&CIK=0000701374&Index=10000

[GAcoaster]

Interesting-- something tells me there are more shakeups coming. 

[Medusa42]

Three Park President changes:

 

SFGAm:  Park President Hank Salemi passed away suddenly yesterday.

https://www.iaapa.org/news/iaapa-news-daily/charles-hank-salemi-dear-friend-and-attractions-industry-leader?fbclid=IwAR3ZmOW6OsKufAAh2GBuv2N_fPzpYYDn3qNs1HO2iiElBifadW1sfCCxRik

 

 

SFA: Rick Howarth is back as Park President.  Richard Pretlow is now the Director of Food and Beverage at Six Flags Over Georgia.

 

SFOT: Park President Ron McKenzie is no longer with the company.

[GAcoaster]

So between this, and the departure of the SFOT president, I could see a couple of people moving around in the company. 

 

Honestly I'm kind of surprised Jeff Seibert hasn't been promoted to a larger park since he's been doing such a great job with SFFT. I wouldn't be surprised to see him moved to either SFOT or SFGAm. 

[The Master]

Screamscape suspects that Six Flags may be retiring its membership program. 

[Medusa42]

On 1/15/2022 at 12:06 AM, The Master said:

Screamscape suspects that Six Flags may be retiring its membership program. 

It looks like they are being called legacy memberships now.  I imagine Six Flags will increase the prices on legacy memberships after 12 months to get all of those people to switch to the new passes.

 

Here is the new pricing and pass options for Magic Mountain:

https://www.sixflags.com/magicmountain/store/tickets

 

[Tbone112499]

1 minute ago, Medusa42 said:

It looks like they are being called legacy memberships now.  I imagine Six Flags will increase the prices on legacy memberships after 12 months to get all of those people to switch to the new passes.

 

Here is the new pricing and pass options for Magic Mountain:

https://www.sixflags.com/magicmountain/store/tickets

 

Well then for at least the next year, I’m not canceling my DE-VIP membership. The loss of unlimited dining is the biggest killer. I can’t imagine having only 10 total meals for the amount of times I’ve visited over the last few years.

[29yrswithaGApass]

It also looks like the maximum merchandise discount goes from 50% to 30% and food from 50% to 20%.  The 50% off was the only reason I kept the DE-VIP.  I don't think this is going to be pretty.

[Tbone112499]

8 hours ago, 29yrswithaGApass said:

It also looks like the maximum merchandise discount goes from 50% to 30% and food from 50% to 20%.  The 50% off was the only reason I kept the DE-VIP.  I don't think this is going to be pretty.

I wouldn’t have most of the merchandise I have w/o the 50% off either. Just another reason to hold on to the membership. Not to mention how helpful it is to use that discount for food when I bring friends who don’t have dining plans.

[Gyrotron]

Truthfully speaking, I never bought into the membership and I know others the same as myself. We'd prefer to get Wawa or maybe even McDonald's outside the park on the drive out, rather than diverge much more money to a confusing membership with tiers and different perks that didn't really matter to me in the grand scheme of admission to park and parking (which is included in traditional season pass). If I really wanted to eat inside the park, I'm not worried to spend the money on it.

 

I say this since it wasn't even an effort to save money, I just don't feel that I participate in merchandise or in-house food enough to pay so much extra/monthly for a service. 

 

I am excited to see what the shake-up brings!

[Yoshi]

I always liked the gold season pass with the season dining pass. That way it was paid for the season.

 

I thought maybe the dining pass was balanced out with those who used it 30+ times a season and others who bought it and used it one or two days a season but I guess they were losing a lot of money with the frequent users.

[Medusa42]

https://seekingalpha.com/news/3788654-six-flags-looks-attractive-to-oppenheimer-due-to-premiumization-push

Quote

Six Flags looks attractive to Oppenheimer due to premiumization push

• Six Flags Entertainment (NYSE:SIX) is on watch after Oppenheimer turns constructive with an upgrade to an Outperform rating from Peer Perform.
• The firm says it became more confident after meeting with SIX with newly-appointed Six Flags CEO Selim Bassoul and hearing about the strategy of premiumization.
• "The company has been focused on attendance growth for too long and has neglected obvious pricing opportunities and customer experience improvements. The correct path to sustainable revenue growth appears to be through fewer guests (vs. cheap season passes) who are willing to pay-up for a better product/experience (e.g., fewer crowds, shorter lines, better food)."
• While this strategy could lead to a drop in attendance, the expectation is that it will lead to significantly stronger pricing.
• Oppenheimer sets a price target of $54 on SIX to rep 33% upside potential. Shares of Six Flags (SIX) are up 0.88% premarket to $41.04.

 

 

[jollyroger]

What the heck is a 10-meal dining plan! We want Jim Reed Andersen back from retirement again!  

But, seriously, I'm glad this year I'll have the real dining pass, but if they don't offer the usual unlimited version, I'd consider skipping 2023, Six Flags America is my closest park at 2 1/2 hours away, the main reason I renew Hersheypark's higher prices is because of it being our closest park.

I get it, it seemed like everybody seemed to have a cheap pass that gets you to all Six flags may have not been the best financially, but the price jumped too quickly and discontinuing the Dining pass that a lot of guests got really used to is a bad idea. They are on their fourth version of a 2022 pass now I think, they can't make up their mind, remember the pass that didn't get you into Fright Fest and Holiday in the Park, they had to change that, because that didn't work out, hopefully this 10 meal dining pass doesn't work out and it goes back to unlimited dining plan.

[29yrswithaGApass]

On the SFGA website you can "Get Passes & Memberships" now but notice it says "Check Back Soon for 2022 Tickets and Passes!".  They don't use the word Memberships.

 

[Medusa42]

The new strategy:

Quote

Selim Bassoul

 

Thank you, Sandeep. While our results in the fourth quarter were strong, there is enormous and top potential for our business that we can capture through a shift in strategy. I would now like to discuss our new strategic direction in more detail, focusing on three areas: first, the guest experience; second, pricing; and third, capital allocation.

 

Improving the guest experience is our primary focus. While there are many different ways to further delight our guests, we will prioritize the following six initiatives. Number one, improve our right efficiency and convenience. This includes reducing wait times at rides, reducing ride downtime and opening rides when our guests arrive.

 

To accomplish this, we reallocate staff from lower-value activities to rides, and will improve our processes in order to load ride faster, and ensure cars are full every cycle. This includes adding a single rider lane so that we can fill single seats that would have otherwise been empty.

 

We will also experiment with virtual queueing technology to help reduce wait times and allow guests to spend more time exploring our parks and less time standing in line. We're also in the process of testing digital screens throughout our parks that display current wait time for rides and restaurants, which should help our guests navigate our parks more efficiently.

 

Number two, create fun through employee friendliness. This means treating our guests like family, having a positive attitude and smile. Attitudes are infectious. And my experience has taught me that a little smile can go a long way in the customer service business.

 

Number three, park cleanliness. This includes better curb appeal at the front gate, better in landscaping and clean rest rooms. In fact, we are currently in the process of updating the front gate entrance experience at several of our large parks, and we hope to complete this work in advance of our peak summer season.

 

Number four, better quality food. This is a core expertise of mine, and an area in which we have -- we can have an immediate impact. We have already hired a renowned executive chef to oversee our culinary program, and we have brought in a foodservice expert to help us deliver fast food -- food fast and efficiently. We'll start by focusing on the top-selling items like burgers, pizza, and chicken tenders.

 

Over the past 100 days, we have been reformulating our menu and testing new recipes on a daily basis. In fact, I have tried over 100 burgers, 200 slices of pizza and 100 orders of chicken tenders. We are still putting the final touches on our new culinary offerings. But based on what I've tasted so far, the quality of these items is better than any theme parks I've ever visited.

 

So, we are very excited to welcome back our guests this spring with new and improved versions of our top-selling food items. Over time, we will expand our focus to include healthier menu items, more grilled option as well as better refreshments including coffee and alcoholic beverages.

In addition, we'll upgrade our point-of-sale system and kitchen operation to reduce lines and provide fresher, healthier and better-tasting food. Food and beverage represented 21% of our total revenue last year, but it can be much bigger over time.

 

Number five, more guest amenities. In talking to our guests, they consistently requested more benches through our parks to sit and relax, more shaded areas to cool off and parent lounges for some quite time. We are already in the process of adding some of these amenities to our parks for the upcoming season.

 

Finally, priority six is to upgrade our guest-facing technology, and in particular, our mobile app. We are updating our app to make it effective, intuitive and relevant, improving personalization by using the wealth of data already available in our system.

 

Over the next few months, we plan to improve our mobile app to deliver a more seamless guest experience in the following ways: by increasing speed of entry at the parking lot and at the front gate, increasing access to a digital flash path, enable guests to skip the line with a click of the button, and increasing usage of our mobile ordering system for food and beverage. More features will be added over time as the app becomes a remote control that facilitates a seamless guest experience.

 

We are also committed to investing in technology that will help ensure a more sustainable future, such as solar energy and waste reduction.

 

Improving the guest experience is our obsession. We will wake up every morning and go to sleep every night thinking of ways to further delight our guests.

 

Next, I would like to talk about pricing. Our guest surveys and our guest interviews have both indicated that customers are willing to pay more for better quality of service.

 

However, we have historically ignored this data. And instead, we prioritized filling our parks to maximum capacity at the expense of the guest experience. Data shows that guests who came on heavily discounted or free tickets pre-pandemic did not match -- spend much time -- much money in the parks, yet they used up our park capacity.

 

So, based on our analysis, our historical reliance on heavy discounting was not the right strategy. Through premiumization, we are focused on guests who are willing to pay more for a premium experience which will lessen the crowding of our parks, reducing pressure on operations and elevating the guest experience.

 

Our pricing goal is to provide value for our guest times and value for the price paid. We'll simplify our ticket offerings, but combining season passes and memberships into a new product lineup with fewer choices and targeted blackout dates.

 

Our new pricing architecture will not only be simpler for customers to understand, but we will also create credible upsell opportunities, and have the opportunity to dynamically adjust prices based on the season and the day of the week.

 

We have already run a successful test of our new pricing program over the past month and we are ready to roll out the changes company-wide over the coming weeks. It is important to note that our ability to raise price is directly related to our ability to deliver a higher quality guest experience. So these two strategic priorities go hand-in-hand.

 

Finally, before opening the call for questions, I would like to briefly comment on our capital allocation strategy. Our capital priorities have evolved and we are currently focused on only two areas.

 

Our number one priority is reinvesting in our business. Our goal is to lead the industry in terms of innovation. And to do that, we need to invest in our parks and in our system. Historically, innovation was measured in terms of thrill rides. In fact, for years, we have spent about 60% of our capital expenditure budget on new rides and attraction, and we have been able to build an exceptional portfolio of thrilled rides.

 

While this strategy provides an effective marketing tool to attract new guests and increase the capacity of our parks, the marketing impact of each ride was short-lived. As we sit here today, we have ample thrill rides in our parks.

 

And while we continue to selectively add new coasters over time, our near-term focus will be to deploy our resources into guest-facing technology, food and beverage offerings, and other part infrastructure improvement for a higher guest experience impact with a lower cost than adding new rides.

 

Now, once we have reinvested in our business, our second capital priority will be to pay down debt. These are the only two capital priorities for the time being. In conclusion, Six Flags has a truly unique portfolio of parks.

And with our new culture, our reset organization and our updated strategy in place, I'm confident that we will delight both our guests and our shareholders over time. Hopefully, you can sense that I'm highly energized to serve in this role, and I look forward to updating you on our continued progress in the months ahead.

 

https://seekingalpha.com/article/4490022-six-flags-entertainment-corporation-six-ceo-selim-bassoul-on-q4-2021-earnings-call-transcript

Edit:  Six Flags provides an official call transcript now:

https://investors.sixflags.com/~/media/Files/S/Sixflags-IR-V2/documents/events/six-usq-transcript-2022-02-24.pdf
 

Edited February 24, 2022 by Medusa42

[29yrswithaGApass]

Not to be a Debbie-downer but it is not going to work.  They can't sacrifice the draw of new capital being spent on rides by instead proclaiming they have new better flavored chicken tender and a better app for you to use.  We have seen this before.  Several times in fact and it didn't work and Chapter 11 was the end result.  This sounds like Shapiro 2.0.  

[The Master]

4 hours ago, 29yrswithaGApass said:

Not to be a Debbie-downer but it is not going to work.  They can't sacrifice the draw of new capital being spent on rides by instead proclaiming they have new better flavored chicken tender and a better app for you to use.  We have seen this before.  Several times in fact and it didn't work and Chapter 11 was the end result.  This sounds like Shapiro 2.0.  

 

They never seem to learn. Most people go to parks to ride, that is the primary reason for most to go. Eating is a secondary activity that is mainly done out of necessity within parks. It seems the new management really wants to copy Disney's business model even through it doesn't fit with the seasonal and regional amusment market segment that SF operates in. 

 

I wonder if they will try opening barbershops again, LOL. 

[GAcoaster]

They're really trying to up per capita spending by giving people a reason to want to stay in the park and eat rather than bringing food or leaving the park for it. It's a good idea, but not a particularly well thought out execution. They need to make some fundamental changes to their whole business model (or someone else will do it for them when it's bought out or taken over again) 

[The Master]

One way to improve spending is to offer better value. Customers who think they are are getting their money's worth are more likely to spend more. Customers who think they are getting ripped off will be hesitant to spend additional money. If customer A is having a good time in the park, experiencing all the rides without major wait times then that person will likely be more willing to spend more money on food and merch than customer B who is having a bad time. Long slow moving lines, line cutting, SBNO rides, non knowledgeable staff, dirty walkways, etc can easily piss off customers to not want to spend more. A better park experience will encourage more in park spending. Slightly improving the recipes of commodity food items is just a band aid.