Let's address what might be the toughest question following the merger of the Cedar Fair and Six Flags theme parks. Which parks will end up closing as a result of the deal?
It's not a given that any parks will have to close once the merger is complete, which is expected early next year. This is a share swap deal that should not burden the company with excess debt that would need to be repaid. But the new Six Flags would have more than two dozen parks across North America, including some that will be adding only a tiny percentage to what shareholders hope will be a larger bottom line. As managers consider where to spend money on new rides and improvements in this capital-intensive business, it won't take long for people to recognize that the money might stretch further if there were fewer parks to maintain.
And closing a park can free its salvageable rides to relocate to remaining parks in the chain as "new" attractions.
The trick is to close (or sell) the parks whose loss would result in the smallest hit to revenue while delivering the highest possible return in a real estate or full-park sale. (Update: And a few parks are just operating agreements, where the company doesn't actually own the land. Noted by a * below.) Considering that, I have sorted the Cedar Fair and Six Flags theme parks into tiers, representing how seriously management might consider closing them.
Here are the seven parks listed in the recent TEA/AECOM Theme Index report as ranking among the Top 20 most visited parks in North America, in order of their estimated attendance.
These are the parks in the new Six Flags that have hit big with fans and that deliver substantial revenue to the company. Closing any of these would do real financial damage to the company - unless the new Six Flags got just a Corleone-style offer that was so much that they could not possibly refuse it. Still, damage would be done. It's just that the sale income might be worth more than the damage.
I don't see those offers incoming, so here are your seven untouchables in the new Six Flags chain:
These parks are knocking on the door of the Top 20 and have either received substantial recent investment or have well-regarded attractions that make them strong attractions beyond their local market. (Or both.) I have listed them alphabetically, but some clearly have stronger cases to be listed as untouchable than others. Carowinds, for example, is the home to the new Six Flags' corporate headquarters, and that's about a strong an endorsement of a park's security within the company as I can imagine. Six Flags Over Texas is also the original park in the original Six Flags company, as well as being located in the large Dallas/Forth Worth metro area (and it's a lease deal anyway).
Six Flags would not want to cede the growing San Antonio market to SeaWorld by closing Fiesta Texas, and the Georgia park draws well from the Atlanta metro. Kings Dominion is probably at the bottom of this tier, but it remains a strong park for the company, with multiple highly-ranked coasters.
Canada's Wonderland (above) is a definite untouchable, and the new company's two other international parks - in Montreal and outside Mexico City - likely count as too-valuable to cast aside given their locations in major markets, unless international legal and economic issues complicate their integration into the new company. But I will concede that I have not followed either park closely enough to pass judgment on them beyond that.
Now we get to the parks whose fans might begin to worry. A little over half of these parks are located in major metro areas, which offer the upside of access to many potential local visitors, along with the downside of potentially high real estate values that could make the parks a lucrative sales opportunity.
Six Flags New England isn't located within a major metro area, but in the northeast megalopolis, it's close enough to others that it fits in the same category as the parks immediately above.
That leaves four parks that are not lighting it up on attendance and aren't located in major metro areas. But would they attract enough money in a sale - either for land or the whole park - to make them worth closing right away?
That leaves us with the one park whose fate has been sealed - California's Great America*. Cedar Fair already decided to close the park, having sold its real estate to a Silicon Valley developer. The only question is whether the merger accelerates the end of CGA's up-to-10-year lease.
The impending demise of California's Great America might help move Discovery Kingdom onto the untouchable list, as CGA's closure leaves DK as the only major amusement park in the large and lucrative Bay Area market.
That leaves the new Six Flags to decide if it wants to keep two parks in Missouri, or two parks on either side of the DC/Northern Virginia market. Attendance and per cap spending data over the next year might determine whether several of these parks get to come back for 2025 and beyond, or if 2024 will be their final season of operation.
What would you like to see the new Six Flags do about its park line-up?
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Six Flags Darien Lake is only managed by Six Flags, so they can’t close or sell that park, they can only opt to terminate the management agreement.
Dorney Park is an hour from downtown Philadelphia, which I think qualifies it as being in a major metro area. It’s also located in the highly populated Lehigh Valley. It has a great market, and would be an able to draw a lot of guests if it got some investment. When was the last time they got a new coaster?
Frontier City is also operated by Six Flags under a lease agreement, so as with Darien Lake the merged entity can’t benefit from selling the land out from under the park. Six Flags also doesn’t own the land under LaRonde though they have a long term lease. It probably makes sense for the new Six Flags to opt out of most of the amusement park and stand alone water park lease agreements when the opportunity presents in order to focus on the expanded park lineup.
With Kings Dominion in the same market I could see SFA closing and the valuable land underneath it sold. And Great Escape would be a good fit with the smaller parks of the Palace Entertainment chain. I’m not sure if closing or selling any of the remaining parks makes sense. Losing GA, SFA, GE, FC, and DL gets the merged chain down to a solid 21 and I think that’s where they end up when the dust settles.
I don’t see Michigan’s Adventure surviving. Between Cedar Point getting the lion’s share of theme park business from the Metro Detroit area and Kings Island and Six Flags Great America also within a few hours drive of the southern and western parts of Michigan respectively, you’re left with a pretty darn small market for MA.
The only park I can see them closing (other than CGA which doesn't count) is SFA. Being a small, neglected park in direct competition with KD doesn't bode well for its future in the current circumstance. Which is a shame because I've always felt like SFA would make a good family owned park, unfortunately it became the poster child of all the bad things about 2000's era Six Flags becoming a mishmash of random things thrown together with no thought whatsoever.
Not sure how you came to the conclusion for those parks under "probably not touchable." Carowinds is literally Cedar Fair's home park as they have moved pretty much all their corporate offices there and are moving Six Flags' corporate there, citing the Charlotte as one of the key markets going forward. Kings Dominion, Fiesta Texas, Over Texas, and Over Georgia are all massively successful parks in major markets.
MA is the perfect example of a park that I can see being renamed to Six Flags Michigan rather than sold. The park is already a proven money-maker, even when little money is pumped into it. Yet, I would argue it's not well-known by the general public in the wider region. If the company were to build a new coaster, increase the advertising budget, and market it as a Six Flags park, folks here in northern Indiana might say, "Oh, there's a Six Flags in Michigan. We should check it out."
Since CGA is closing, FC, SFDK, SFSL, and WOF are all now the only major parks in their respective metro areas. I suppose you could close either SFST or WOF, but Missouri is a big place. DP is far away enough from SFGAd that it's probably worth keeping around, even if it's more of a local draw. VF competes with the MOA, but they have real estate that the indoor complex lacks. GE just got a new investment, so the company may have renewed faith in that property that's always been more of a draw for locals anyway.
I am most worried about SFA. DC real estate is valuable, SF has invested little money in that property this century, and shutting it down could allow SF to pool their resources for that region into KD, which could be positioned as an even greater threat to BGW.
Six Flags Over Georgia and Six Flags Over Texas (both parks and underlying real estate) are owned by limited partnerships in which Six Flags Entertainment Corporation owns a % interest (31.5% for Over Georgia and White Water, 54.1% for Over Texas) with the option to purchase both parks outright in 2027 and 2028, respectively. So those parks are extremely likely to remain in the chain at least until those dates, and probably long after so long as the merger is not a complete disaster.
Great article and analysis, Robert.
@TheSeg I agree with you, though what a shame to lose GA, which is a beautiful, if outdated park, to DK, which is horribly disorganized and littered with crude (and morally bankrupt) animal enclosures. I'd just as soon they close both and start over.
Frontier City has had a long relationship with Six Flags. At one point FC owned and managed the Six Flags chain from Oklahoma City. Once the chain was sold to other interests and FC was no longer a Six Flags park, the previous owners of SF bought it. Then they reached an agreement for SF to manage the park. It’s been a long, strange trip.
My hope for my home park is that the owners will stay with Cedar Fair and CF will see the potential to grow the park. I’m not asking for it to grow as big as Six Flags Arlington, but it would be great if it could be comparable to Kennywood. Have a few smaller coasters and one flagship one for the park. Both parks have a similar sized footprint. I’m not sure how the water park will fair with a new indoor water park being built near downtown OKC that will cater to out of state visitors.
Definitely believe the Vinita “freedom” park won’t happen, so it would be great if FC could become a better regional park.
I really hope they don't close WoF but if they have to, I hope some other investors purchase the park!
First I think they will layoff all the overlapping positions in the HQ. Which will no doubt lower moral and start a train wreck. Next sell off the parks they do not want, are not a threat and have potential buyers. Finally give those they cannot sell the Six Flags Ohio treatment. I would expect any of the parks to get investment until they pay down (I assume) debt if any. Investors of FUN get the rest.
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For the California parks, I find your analysis accurate.
Great America was getting investment, including a new flat-ride and some attraction refreshments. These were either transferable investments to other parks or inexpensive enough to do, but they are investments.
Before the merger announcement, I was confident the life of the part was on the longer end of the 10 years. Now everything's tossed out the window. I have a very high confidence the park will exist through the 2024 season, but after that is anyone's guess at this point.
For Discovery Kingdom, the way you define "Definitely touchable" is what I agree with. That park is in play, but has a lot going to stay in operation, especially with the closure of Great America. Between the two, GA had the more prime real estate than DK. I'm not sure that a developer would offer such a lucrative deal coming close to GA's land deal.
What would be interesting if after the merger closes: Would the multi-park passes work across all parks? In a NorCal perspective, that would start a nice transition from California's Great America to Discovery Kingdom.