Six Flags Corporate News

[29yrswithaGApass]

Six Flags CFO steps down, interim CFO appointed

Feb. 28, 2022 4:24 PM ETSix Flags Entertainment Corporation (SIX)By: Khyathi Dalal, SA News Editor

• Six Flags Entertainment (NYSE:SIX)announced that Sandeep Reddy, EVP & CFO has notified the company that he has accepted a position at another company and plans to resign effective Mar.27.
• Stephen Purtell will assume the role of interim CFO on Mr. Reddy’s departure.
• Currently, Mr. Purtell serves as SVP, Corporate Communications, Investor Relations and Treasurer.
• The board plans to engage a search firm to conduct a search process, including internal and external candidates, to identify the next CFO.

[Medusa42]

Here is the official Q1 2022 Earnings Call Transcript:

 

https://investors.sixflags.com/~/media/Files/S/Sixflags-IR-V2/documents/events/six-usq-transcript-2022-05-12-final.pdf

 

[29yrswithaGApass]

I listened to the call yesterday and wasn’t really inspired.   Many of the “improvements” described should be the foundation of any park.  Touting more venues for alcohol and charges for things which were free in years past, like chairs and umbrellas at the water park, while also bragging about price increases and fewer guest benefits (like meal plans and bring a friend free tickets), and finally an attempt to increase prices again later this season just don’t make patrons feel all warm and fuzzy.  
 

Sadly, there was no mention of their approach for introducing new rides, entertainment, and events in the years ahead.  Bragging about chicken tenders can only go on for so long and given the state of the economy it may not be the best time to brag about increasing prices and taking things away.  

[The Master]

They sound really out of touch, or they really like tendies. 

 

Edited May 14, 2022 by The Master

[Daved Thomson]

Seems there's a bit of turmoil in this company's highest ranks, especially amongst the board.  I get the impression they're doing a lot of painting lipstick on pigs, and not sure how much longer the public or shareholders are going to buy into their BS.

[GAcoaster]

I wouldn't be surprised to hear they are in talks for a sale or merger soon... 

[Medusa42]

8 hours ago, Daved Thomson said:

Seems there's a bit of turmoil in this company's highest ranks, especially amongst the board.  I get the impression they're doing a lot of painting lipstick on pigs, and not sure how much longer the public or shareholders are going to buy into their BS.

Not really,  the current board was just reappointed by the shareholders during the proxy vote and the shareholders supported the boards recommendations during the vote.  The previous board failed to keep Jim Reid Anderson and Marshall Barber in check and was ousted as part of an agreement with H Partners management.   There was a lot of turmoil in the corporate management because Selim cut down the layers of management and gave park presidents more control over the decision making.

 

Six Flags is unable to buy/sell parks until they get clear of the 2025 Secured Notes that were issued during the pandemic.   It sounds like the company is planning to pay down some of this debt with cash on hand in July and they plan to restructure the remaining debt with new unsecured debt in the next 12-18 months.  This would remove the noose from their neck.

 

[Daved Thomson]

I just took the time to read the transcript and, quite frankly, really found leadership to be out-of-touch with, not only their current customers, but potential customers.  What they see as value for the guest, I see as nickel and diming the guest at every level for basic services consumers have come to expect in a quality theme park.  And, they're making so many of their decisions on a wing and a prayer, hoping that what they expect to happen, will happen.  Yet, there seems to be no consideration of the possibility that it will not happen.  And, they offer little, if any, market or financial data supporting their strategy.  Heck, they can't even tell you how much of a trade-off in attendance is acceptable at a given increase in in-park spending.  They seem to think that consumers will happily spend more for services they already think a park should provide in the first place, and that is just not the case.  The word monetize is used quite recklessly, in my opinion, as if the consumer is eager to throw money at the company's problems.

 

[The Master]

1 hour ago, Daved Thomson said:

I just took the time to read the transcript and, quite frankly, really found leadership to be out-of-touch with, not only their current customers, but potential customers.  What they see as value for the guest, I see as nickel and diming the guest at every level for basic services consumers have come to expect in a quality theme park.  And, they're making so many of their decisions on a wing and a prayer, hoping that what they expect to happen, will happen.  Yet, there seems to be no consideration of the possibility that it will not happen.  And, they offer little, if any, market or financial data supporting their strategy.  Heck, they can't even tell you how much of a trade-off in attendance is acceptable at a given increase in in-park spending.  They seem to think that consumers will happily spend more for services they already think a park should provide in the first place, and that is just not the case.  The word monetize is used quite recklessly, in my opinion, as if the consumer is eager to throw money at the company's problems.

 

 

This seems to be a fad in business now to monetize everything. Its been a big issue with software for awhile and its creeping into the automotive market like with Tesla making everything a upcharge subscription like extended range and quick charging. Disney which is market leader in the amusement industry has been increasing their monetization efforts with various new upcharge scemes. The problem for Six Flags is that their demand is not as elastic as Disney to pull off additional upcharges. It just seems like a repeat of the Shapiro era including the street performers on the park midways. Maybe they will try barber shops again. 

Edited May 16, 2022 by The Master

[Daved Thomson]

Let's just hope it really is just a fad, one that will come to a screeching halt when these companies come to realize that their customers have a finite number of dollars available to spend.  Beyond that, they don't seem to realize that most of those customers have real limits on the number of dollars they can spend on recreation/entertainment.  It sickens me to hear company's separate their paying customers into categories such as desirable and undesirable.  It's as if these executives don't believe that it is far easier and profitable to keep an existing customer, than it is to get a new customer.  You always want to keep your current customer's happy.  Doing so makes them repeat customers, as well as loyal customers.  Those happy customers bring significant good will to the company, not to mention new customers with their strong word-of-mouth advertising.

 

Beyond all of this, I can not think of any mainstream brand in any industry (that has held a strong value proposition) in the marketplace that successfully repositioned itself into a more premium or upscale position, enabling it to charge a premium price while maintaining or building the same customer base.  Failures are obvious in almost every industry.  JCPenney and Sears vividly come to mind for me with their epic failed attempts to move upscale with premium pricing.  Mazda, in the mid-1990s, decided to begin pricing their vehicles directly in-line with Toyota and Honda, at a time when Mazda's vehicles were far better looking than the Toyota/Honda competing models, but with quality levels well below those competing models.  They made a conscious decision to walk away from their customers who had previously bought a Mazda because they provided a better value (comparable quality, more features/options than Toyota/Honda, at a slightly lower price) in an attempt to attract buyers willing to pay more while increasing annual sales significantly.

 

In my opinion, the Disney park's are destroying their customer loyalty and walking away from the industry's most solid customer base, all in the name of politics.  And, as you point out, Six Flags is NO Disney. 

[GAcoaster]

Seeing anecdotal evidence of the Six Flags parks not doing well compared to the competition, I have to wonder what the future holds. Sale? Merger? Sale of certain parks? Anything is possible...

 

https://www.fool.com/investing/2022/07/04/with-recession-possibly-on-the-horizon-can-six-fla/

 

I could see SeaWorld acquiring a couple of parks if the price was right since they are looking to expand. 

[Medusa42]

The Q1 results appear to show that Selim's plan was working and he said they were planning to use cash to pay down debt and refinance the debt later this year.  The company isn't paying a dividend to shareholders.  We will have a better idea if Six Flags is still on the right track when the Q2 numbers come out at the end of July/early August.

 

Herschend Family Entertainment, Palace Entertainment/Parques Reunidos, and Premier Parks with help from EPR Properties are also looking for parks to acquire.

 

Cedar Fair is in a much better position with their debt due to the California's Great America sale and is reinstating the unitholder distribution by the end of Q3.  They could be interested in picking up a park if it is a good fit and the price is right.

[29yrswithaGApass]

Six Flags 3rd Quarter report comes out today (Nov 10, 2022) at 8PM ET.  Should be interesting.  

 

https://investors.sixflags.com/news-and-events/press-releases/2022/10-17-2022-170919759

 

 

[Medusa42]

 

https://investors.sixflags.com/news-and-events/press-releases/2022/11-10-2022-120400592

 

November 10, 2022

 

ARLINGTON, Texas--(BUSINESS WIRE)-- Six Flags Entertainment Corporation (NYSE: SIX), the world’s largest regional theme park company and the largest operator of waterparks in North America, today announced that the company and H Partners agreed to amend their existing Cooperation Agreement to permit H Partners to increase its beneficial ownership of Six Flags common stock to 19.9%, up from a cap of 14.9% in the original agreement.

 

“H Partners has been a constructive and important partner to the company. We are pleased they continue to recognize the value potential of Six Flags and the progress management is making for our shareholders,” said Ben Baldanza, Non-Executive Chairman of the Board.

 

“We are excited about the company’s strategy to deliver an exceptional guest experience and to drive sustainable, long-term earnings growth,” said Arik Ruchim, a Partner at H Partners and director on the Six Flags Board. “We believe that meaningful change takes time to implement, and we are encouraged by the early signs of progress on this ambitious journey.”

[Medusa42]

https://www.wsj.com/articles/land-buildings-has-roughly-3-stake-in-six-flags-11671579001

https://www.marketwatch.com/story/activist-investor-wants-six-flags-to-cash-in-on-its-real-estate-holdings-11671583572?mod=home-page

Edited December 21, 2022 by Medusa42

[29yrswithaGApass]

^ I hope changes are made at the highest level before we get to this stage where we are screwing around with selling property or having third parties own the land.  How sad is it that we are at this point because of an unexperienced leader without any theme park knowledge.  Go to your favorite Six Flags park now before it’s turned into condos or golf courses.  

[Medusa42]

10 hours ago, 29yrswithaGApass said:

^ I hope changes are made at the highest level before we get to this stage where we are screwing around with selling property or having third parties own the land.  How sad is it that we are at this point because of an unexperienced leader without any theme park knowledge.  Go to your favorite Six Flags park now before it’s turned into condos or golf courses.  

We can only hope that Cedar Fair, SeaWorld, Herschend, and Palace Entertainment are able to bid on and save some of the parks.

 

EDIT: And the presentation is now up.

 

https://landandbuildings.com/wp-content/uploads/2022/12/LandB-Six-Flags-SIX-—-Thrilling-Real-Estate-Value.pdf

 

Edited December 21, 2022 by Medusa42

[Medusa42]

Six Flags is adding another independent director to the Board of Directors.

 

https://www.businesswire.com/news/home/20230131005499/en/Six-Flags-Appoints-New-Independent-Director-to-its-Board-of-Directors

 

"The Six Flags’ Board of Directors regularly engages with its shareholders on corporate governance and strategy topics. As the Company has noted previously, it has engaged with Land & Buildings Investment Management, LLC several times over the past few months to understand its views. Today’s announcement follows constructive dialogue between Land & Buildings and Six Flags."

[29yrswithaGApass]

^ This is a nightmare.  

[The Master]

Hopefully its just Sixflags PR talk to placate those predatory A holes.

[Daved Thomson]

This is a TOTAL nightmare and I am complete agreement with Harry regarding this issue.  Their comparison to both MGM and Marriott's success when going this route, is meaningless.  Customers of both of those brands are significantly different than those attending theme parks and neither of those brands offers either season passes, memberships, or requires an admission ticket to enter their properties.  The whole scheme sounds to me like a company that's moving to sell its real estate assets, leading to the eventual closing of their parks.  The man at the top made a huge mistake with his premium price/premium experience strategy and, personally, he should be sent packing.  Why he was brought in to begin with, is beyond me.  There needs to be an experienced theme park professional running this company, rather than some CFO turned CEO.  He, along with this Land and Buildings proposal, clearly want to maximize their investments before checking out, rather than operating theme parks.  GA is clearly the only park with significant real estate available for development, so Land and Buildings would be the real decider of which parks continue on as theme parks and which parks are sold-off for their real estate.  Where's John Dutton when we need him!