Six Flags Files for Bankruptcy
Apparently, entertainment isn’t recession-proof:
Amusement park operator Six Flags declared bankruptcy yesterday but says that it will keep its parks open, at least for now. According to the Washington Post, the company is carrying $2.4 billion in debt. Despite the fact that Six Flags reported 25 million visitors and posted record revenues in 2008, the debt is simply unsustainable, the Associated Press reports.
The WaPo story notes that part of the problem was a series of unfortunate events:
The company doubled its income from corporate sponsorship and from season ticket sales, and it added themed attractions based on the Looney Tunes characters, the Justice League of America, skateboarding legend Tony Hawk, the Wiggles and Thomas the Tank Engine.
But its summer 2007 attendance was slammed by bad weather in Georgia and Texas, and by an accident on a ride at its park in Kentucky. The same year, it sold seven of its theme parks to a Jacksonville, Fla., company for $312 million in an effort to improve its balance sheet.
What’s interesting is that attendance continues to boom. My first impression on reading the headline at Slate was that amusement parks may be, like the circus, a legacy of an era gone by. It would be easy to surmise that kids raised on video games, the Internet, and instant gratification would find standing in ridiculously long lines for a three minue ride boring. The attendance figures, however, would seem to belie that.
I suspect that the debt is the important part. Their problem seems to be more the financial crisis than the recession.
BTW, Six Flags attributes their problems to a decline in the peso and shrinking international revenues rather than to any reduction in domestic revenues.
Well my kids range in age from 10 to 15 and all four of them are begging to go to Six Flags this summer, so this little corner of the video game generation still likes going to amusement parks.
I figure some kind of reorganization with bankruptcy will probably salvage the company. Amusement parks are expensive, but they aren’t prohibitively expensive.
IN fairness, they’ve been a little shakey, apparently, for some time. They snapped up, for example, Darien Lake just west of me here, a few years back from the Snyder folks. Darn near drove nearby Fantasy Island, over on Grand Island, out of business. They put a whole bunch of new rides into Darien on a colossal scale.
If I read the signs from Darien correctly, they were getting overly aggressive, and started contracting in size the way we sometimes see chain resturants do. (Perkins, for example a few years back) As you say, this in spite of increased traffic at all their sites… including ones they’ve sold off.
It’s my take their debt load was the issue. THey went downright nuts upgrading Darien… that can’t be without cost.
I’ll pt this in a separate reply, because it goes in a completely different direction.
Agreed, they’re not in trouble for attendance.
A bit of local history ; to the east of me here , around 1900 or so, Ontario Beach Park was the big attraction in the area. Big enough to get people coming here from all over the northeast… in a time when such travels were a big deal. It’s not like most folks even had a car, much less that they could jump in an go on a given Saturday Morning.
The place had quite a collection of rides, a decent Ferris wheel, and around 1906 they added a merry go round that still stands there today as a ward of the City.
Time was both the New York Central and local trolley service ran specials to the place. Some remnants of the track are still there to this day. The park was eventually purchased by the city, the first of many failed efforts on the part of the city to run a reasonably successful attraction. In typical government fashion, they ended up overseeing it’s demise, rather than it’s rejuvenation. (See Brown’s Race and a Toronto Ferry for more recent examples… and you guys wonder why I think Government will screw up falling down?)
It’s true, the author of the piece that I link suggests that the reason for the failure was that people’s tastes it changed, particularly following the first world war. But I wonder if what we’re seeing now, isn’t a wish for a new version back to a simpler time.
See, I think there is a difference of attraction between the modern park along the lines of the Darien Lake, and some of the older Parks in the country such as Kennywood, Coney island, Fanasy Island, and Seabreeze, to the east of me here.
The bigger Parks such as Six Flags ran @ Dairen are a good deal more modern, and flashier, and certainly are set for the Nintendo crowd.
The older Parks, meantime, are in a way time tunnels, projecting in many ways the feeling that they’ve always been there. It may not make a great deal of difference to the kids, but I’m guess it does to the parents… the ones paying the bills.
Interestingly, it’s the older Parks that are doing extraordinarily well, again. Their attendance figures are as big as they’ve ever been, and on some weekends bigger. The bigger places such as Darien and Cedar Point doing are OK, too, attendence wise, though the business models of some are a little questionable.
Their problem; They tend to be a less frequent per person visit. The bigger mega Parks tend to be a once are twice a year deal, whereas the older Parks tend to take on the aire of an old friend, one to be visited several times in the season. The figures I’ve seen the last few years suggest a repeat visitor record that the megaparks can’t get close to, despite super-cheap season tickets being offered.
There are many reasons for this, monetary reasons, including fuel costs among them; but I suspect that at least part of it is psychological. There is, I think, something uniquely comforting in the older Parks that the new mega Parks can’t match.
Places like Six Flags, probably wrote their business plans on the idea that they were going to be able to knock the local Parks out of business. It would certainly explain their massive spending on bringing new attractions into the park. And to some degree, they succeeded.
For example, after Snyder put up Darien, Roseland park over in Canandaigua and Olympic park in nearby Chili, succumbed to financial issues in quick succession. But rather than moving on to the Mega parks, like Darien, the displaced patrons simply moved on to the next nearest local park.. Seabreeze and Fantasy Island.
I suspect Six Flags figured the debt they took on to be more than supportable on the assumption that they’d kill off the older places. That didn’t happen.
Video games are a poor substitute for a good, solid roller coaster ride.