Oklahoma City – Premier Parks went on a shopping spree in the late 1990s that would be the envy of any fun-lover. Among the items: Elitch Gardens Amusement Park in Denver, Waterworld USA water parks in California and Great Escape and Splashwater Kingdom in New York.
By the time the company gobbled up the Walibi Family Parks, with locations in France, Belgium and Holland, it was pretty clear to some analysts that things were getting out of hand.
Then in 1998, the Oklahoma City-based company acquired the Six Flags chain of parks for $1.9 billion and later took on the Six Flags name. Now it finds itself saddled with more than $2 billion in debt and the company is up for sale in the middle of a proxy battle.
Ned DeWitt, who served as Six Flags president from 1973 to 1982, said the string of purchases didn’t make sense.
“I think there was a mania, no question,” said DeWitt, who led Six Flags when the company was viewed as the icon of the seasonal theme-park industry. “I did a lot of acquisitions when I was president, but those were all contiguous to the main entertainment of Six Flags.
“This acquisition mania put them into all kinds of properties they just couldn’t bring value to.”
Washington Redskins owner Dan Snyder, who has bought 11.7 percent of the company, says the company needs to be streamlined.
He’d like to increase his holdings and oust the current management team, including Kieran Burke, the chief executive and chairman who presided over the buying spree.
For his part, Burke points to reported revenues for the second quarter of 2005 that were 8.4 percent higher than the previous year and attendance that increased by 6.6 percent. These reports come after years of declines in attendance and sagging revenues.
Analysts largely attribute these declines to operational problems at some parks, including a lack of attention to detail, and to an overexpansion that saw Six Flags purchase some weak amusement properties. These problems were in addition to a general downturn in the amusement park industry after the Sept. 11, 2001, terrorist attacks, a downturn that shows signs of reversing itself.
Burke, who declined requests for interviews, said in a statement that the better recent performance reflects an investment program that has added new attractions in many parks, initiatives to improve services to guests and an advertising campaign featuring “Mr. Six,” a dancing elderly man in a tuxedo.
“We are pleased with the broad-based strong performance of our parks during the first half of 2005,” Burke said.
Over the first six months of 2005, the company reported revenues of $440.9 million, a nearly 10 percent increase over the previous year, but a loss in net income of more than $167 million.
Under Snyder’s plan, ESPN programming whiz Mark Shapiro would come aboard as the company’s new CEO and Snyder would become chairman. The proposal – detailed in filings with the Securities and Exchange Commission – is to get rid of properties that aren’t critical to the management plan, rework the company’s advertising and marketing strategies and establish a “clean, safe and fun” image for the company.
“I haven’t ever met Dan Snyder … but it sounds like he’s dead on,” DeWitt said.
Late last month, Six Flags responded with an announcement that it was putting itself up for sale at auction. Its stock has risen from near $4 in May to close at $7.23 Friday, near the top of its 52-week range. That makes its market capitalization about $673 million.The company was founded in 1961 by Texas oil baron Angus Wynne, who was searching for a cash infusion into an industrial district he was building on the dusty, sparsely populated plains between Dallas and Fort Worth. After a visit to Disneyland, Wynne found what he was looking for – a clean, family oriented business that would provide some quick cash flow.
Six Flags gets its name from the six national flags that flew over the area that is now Texas: U.S., Texan, Confederate, Mexican, French and Spanish.
