It’s been a roller coaster year for the amusement park industry.
Six Flags filed for bankruptcy, a private equity firm acquired the SeaWorld chain and another private equity firm announced plans to acquire Cedar Fair.
Private equity firms such as Blackstone, which bought SeaWorld, and Apollo Global Management, which plans to acquire Cedar Fair, can get relatively good financing terms, said George Andrew Karolyi, professor of finance and global business at Cornell University.
Karolyi said such firms obviously believe the recession is ending.
“They must be seeing this as an economic turnaround,” he said.
Here’s a snapshot of some of this year’s financial news:
• Cedar Fair, which owns 11 amusement parks and six water parks, gave bad news to its unitholders early this year when it chopped its cash distribution nearly in half — from $1.92 per limited partner unit per year to $1 per unit.
The downward spiral continued in November, when Cedar Fair executives announced there would be no cash distribution in 2010 as the company struggled with falling income.
Then, on Dec. 16, came the dramatic news Cedar Fair reached an agreement with Apollo Global
Management to acquire Cedar Fair at $11.50 per limited partner unit.
If at least two-thirds of all unitholders agree with the deal, the $2.4 billion transaction would go through this spring.
• The giant Six Flags amusement park company, which has 21 properties, filed for Chapter 11 bankruptcy protection June 13.
The company’s president, Mark Shapiro, blamed “an unsustainable $2.4 billion debt load from the previous management team” in a letter to company employees.
The company filed a reorganization plan in August, proposing that it be taken over by its lenders.
Bankruptcy court hearings on the company’s plan are set for March. Meanwhile, business continues as usual at the company’s theme parks.
• A private equity firm, the Blackstone Group, took over SeaWorld Parks & Entertainment, which owns 10 amusement parks and water parks, including parks in Williamsburg, Va., and Tampa, Fla., and a planned park in Dubai.
Blackstone paid $2.7 billion. One of the biggest private equity firms in the world, it owns companies such as Hilton Worldwide and Republic Services, a waste disposal business.
• The Walt Disney Co., which operates theme parks such as Disneyland in California and Disney Worldin Florida and also puts out movies and owns TV channels, reported Nov. 12 that earnings for its fiscal year dipped. Diluted earnings per share went from $2.28 the previous fiscal year to $1.76 in the just-finished one. Park and resort income fell 7 percent to $10.7 billion as guests spent less.
Disney declared an annual cash dividend on Dec. 2 of 35 cents per share, the 54th consecutive year of cash payments to shareholders.
Roy Disney, 79, the nephew of Disney visionary Walt Disney, died Dec. 16, the same day the Apollo and Cedar Fair deal was announced. He’s the last member of the Disney family to work for the Disney entertainment companies.
Here's what commenters had to say:
Taxpayer wrote on Dec 22, 2009 9:18 AM:
" I agree the SR must have NOTHING else to report. If it were not for the AP-Obama wire service, sports and all this hype for Cedar Point, the SR would be reduced to classifieds and comics. So the premise is no other local and state news exists?? Cedar Point is the largest employer and their success affects ALL of the city. You may not see it, but a lot of local businesses rely on CP as a PAYING customer. Every dollar from CP as wages, services, contractor work and taxes trickles down the stream. If the place ever closes, WHO will be left to support the union police, fire, teachers and all the mistakes made by the city?? WHO is going to end up PAYING??? "Cedar Point will NEVER close down because they are too BIG to FAIL." I believe a large number of liberal union members told me the exact same thing about NDH/Delphi and Ford. Ha! Ha! "
William Jefferson Clinton wrote on Dec 22, 2009 8:46 AM:
" Six Flags was in trouble long before the recession hit. They put 6 parks up for sale in June 2006. Paramount also was in obvious trouble back then when they found some sucker to buy them out. Poor management decisions were the proximate cause of the many problems in this industry as a whole, the recession was simply the proverbial "straw" and is now erroneously asserted to be the primary cause instead of financial troubles instead incompetent management and bad decisions. Too bad we're not fooled. "
Here in Ohio wrote on Dec 22, 2009 8:34 AM:
you said "but move on for the time being to other news" now thats a good one, :) There is no other news,this town is so dead that when something like this comes up,they have to run it into the ground just to have news, LOL "
Gardenman wrote on Dec 22, 2009 7:37 AM:
" I do understand the significance of the Cedar Point business to greater Sandusky area but it must be an overall slow time for news. Everyday since Dec 16th when this deal was announced the Sandusky Register has had 1, 2, 3 stories on the sale and its impact on Sandusky and from every conceiveable angle.
Frankly I think the Sandusky Register is like beating the story to death. Given the season of Christmas etc. is there nothing of joy in our community and giving taht is worth of publication. Aren't their some extrordinary examples of the people in the area sharing the joy of Christmas.
Sandusky Register frankly you have beat this Cedar Point story to death. Lets stay in touch with it but move on for the time being to other news. "
6079 Smith W wrote on Dec 22, 2009 5:24 AM:
" From the article regarding the Six Flags bankruptcy:
'Bankruptcy court hearings on the company's plan are set for March.'
That doesn’t totally jive with other sources.
According to other sources, Six Flags attempted to emerge from bankruptcy a couple weeks ago, but a judge rejected the financing.
Six Flags was scheduled to return to court on Dec. 11.
As a parks operator, Disney is international in scope.
IMO, having a co. like Apollo with international interests own Cedar Fair has interesting implications. ‘Cedar Point Shanghai’ anyone? "