Posted: November/29/2005 at 3:03pm | IP Logged

Buckle Up, Snyder!

By Rick Aristotle Munarriz (TMFBreakerRick)
November 29, 2005

He did it. Washington Redskins owner Dan Snyder was able to defeat a sea of cautionary press releases from the Six Flags (NYSE: PKS) camp last week to present the struggling amusement park operator with written consents for a shakeup in its stodgy board of directors.

If the court of public opinion bears out, Snyder will be joining the chain's board along with two of his cronies. One is Mark Shapiro, who, after a successful stint as an ESPN executive, now works for Snyder's Red Zone investing arm. The other is NVR (NYSE: NVR) Chairman Dwight Schar.

Six Flags is faring reasonably well this year, with attendance and per-capita guest spending both on the rise at its collection of regional thrill parks. However, after years of taking a lackadaisical approach to transforming the company into a profitable entity in the face of being on the hook for well over $2 billion in debt, Six Flags' largest investors have spoken. Even though Six Flags has insisted that either an outright sale of the company or some strategic alliances will be announced in a few weeks, a majority of shareholders have apparently had enough.

I can't blame them. None of the flags in the company's namesake arsenal are white, but it has definitely felt like a surrender for Six Flags after spending the past two years unloading assets that it had spent decades accumulating. Once a company announces that it is seeking the euphemistic "strategic alternatives," you just know that it's toast.

It's common sense. The only reason someone would want to buy a troubled company is to turn it around. And, believe it or not, Six Flags can, and most likely will, be turned around. It just won't be the handiwork of the guys who have run the company into the ground over the past few years.

Six Flags at half-staff
It doesn't take long to wonder why this shakeup didn't take place sooner. You don't even need to eye the grim stock chart. Let's consider something as simple as Six Flags Great Adventure in New Jersey. Drawing 2.8 million guests last year, it narrowly edges out Magic Mountain in California as the chain's most-visited park.

The Six Flags commitment to keeping Great Adventure popular is not in question. It added a record-breaking steel coaster earlier this year, and it has a tantalizing wooden behemoth going up for the 2006 season. However, ask any traveler planning a trip to the park about nearby lodging, and that person will tell you that there isn't a hotel for miles.

Compare this with rival Cedar Fair's (NYSE: FUN) flagship Cedar Point park in Ohio. The park attracts 3.2 million guests a year, so it's not that much more active on the turnstile front than Great Adventure is. Yet over the years, Cedar Fair has established several overnight resorts within the park's peninsula, as well as a pair of hotels just on the other side of the causeway. It isn't until now that Six Flags is finally getting around to working on getting a resort hotel built adjacent to Great Adventure.

It's ridiculous. Please don't tell me that lodging isn't a big deal for a regional player that relies on day-tripping locals. Build the resorts, and folks will come. And because everyone from Hersheypark to Disney (NYSE: DIS) to Cedar Point to Universal Orlando provides early park admission to their overnight guests, the hotels become a great option for locals with the means to spend -- they get to take advantage of extended hours and shorter lines.

That's why I'm excited about the folks that Snyder is bringing on board. Because NVR is a leading homebuilder, many have figured that Schar's role will be to simply sell off any excess land that the parks own. That may certainly be the case. However, NVR is a real estate developer. What if the plan isn't to simply just sell off parcels of land but to erect lodging and entertainment centers? It doesn't even have to be a capital-intensive deal. After all, Kings Island in Ohio is letting Great Wolf Resorts (Nasdaq: WOLF) build an indoor water park resort and receiving a minority interest in the venture simply by letting Great Wolf build on land that the Viacom (NYSE: VIA)-owned park wasn't using.

Six Flags is coming around slowly in this regard. In three months, it is opening a 200-suite resort with an indoor water park across from one of its smallest parks in upstate New York. It's a great move that should help smooth out the seasonality there. And it will help draw more affluent guests to kick some coin into Six Flags' coffers.

Yet that's why nothing should be as incendiary to longtime Six Flags shareholders as the company bragging about attracting approximately 50 million guests each year, when it's now becoming clear that the company left so much money on the table. Its guests could have stayed longer and spent more over the years. When you're leveraged -- and Six Flags obviously is -- it is disgraceful not to maximize every possible return out of every borrowed cent.

This doesn't mean that Six Flags should raise prices and cut spending. That's a death sentence. I'm just at a loss to explain why a company with so much at stake could afford to sleep at the wheel over the years while the meter was still running.

Along came Snyder
I don't know whether Snyder is going to be a savior. I do know that he and his Red Zone buddies will bring something different to the table at a time when Six Flags needs it the most.

Amusement parks can be a great business. Just hang outside a Disney theme park and see the folks streaming out with shopping bags after having already spent a ton on park tickets and pricey foodstuffs. Mathew Emmert singled out Cedar Fair as a worthy investment to Income Investor subscribers because it has been a consistent grower and has hiked its distribution every single year.

You have a captive audience with a regional amusement park, a feature that is true of an NFL team and a popular cable network. Snyder's new crew may not nail 'em every time, but the alternative feels so much more refreshing than the previous policy of waiting for the worms.

That's the kind of stuff that white flags are made of. Thank goodness that new flags will be fluttering in the wind soon.

Longtime Fool contributor Rick Munarriz loves to take his family to new amusement parks every summer. He practices what he preaches: He owns shares in Disney, Great Wolf Resorts, and Cedar Fair. The Fool has a disclosure policy. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.

Posted: November/29/2005 at 3:07pm | IP Logged

Snyder wins in Six Flags board battle

By William Spain, MarketWatch Last Update: 5:05 PM ET Nov. 29, 2005

CHICAGO (MarketWatch) -- Three new directors took seats on the board of Six Flags Inc. on Tuesday, as Daniel Snyder completed his battle for control of the amusement park operator.

Six Flags six flags inc com(PKS:) management conceded that shareholders had voted to oust the board members and replace them with a slate put forward by Snyder, the owner of the Washington Redskins.

Chief Executive Kieran Burke, Chief Financial Officer James Dannhauser and Stanley Shuman have been replaced on the board effective immediately. Taking their seats are Snyder, ESPN executive Mark Shapiro and Dwight Schar.

Shares of Six Flags ended the day up 1.4% at $7.50.

In a brief written statement, Six Flags said that the results of a consent solicitation pushed by Snyder's Red Zone had been certified by independent inspectors.

Red Zone's other proposals, including amendments to various company by-laws, were also adopted, Six Flags added.

A company spokesman declined to comment on whether Burke or Dannhauser planned to step down from their executive positions.

Snyder, who owns about 12% of the company, launched his attempt to gain control of Six Flags last summer. The company responded by putting itself up for sale and said as recently as last week that it was committed to "moving as expeditiously as possible" toward completing that process.

Posted: November/30/2005 at 3:04pm | IP Logged

Redskins Boss Close to Running Six Flags

Posted: December/01/2005 at 4:28pm | IP Logged

NEW YORK, Dec 01, 2005 (BUSINESS WIRE) -- Six Flags, Inc. (PKS) announced today that its Board of Directors has unanimously appointed Mr. Daniel M. Snyder as non-executive Chairman of the Board of Directors. Mr. Michael Gellert will continue to serve as Lead Independent Director.

The Company further announced that it is continuing its previously announced sale process, which contemplates the submission of final bids before mid-month.

Mr. Snyder stated: "All directors are committed to continuing the sale process." Mark Shapiro, recently elected to the Board, also threw his support behind the sale process continuing unfettered, "It will all play out one step at a time."

Six Flags, Inc. is the world's largest regional theme park company.

Posted: December/06/2005 at 6:58pm | IP Logged

Here is a couple of letters that I would like to share.

The first one is a memo we received a year ago. I removed the name to protect the Innocent.

The second letter is the one corporate gave us about 2 hours before we had the "Park Closing Meeting"

First:

Second:

Posted: December/14/2005 at 2:36pm | IP Logged

Six Flags Ends Sale Process;

 Appoints Mark Shapiro CEO; Jack Kemp, Harvey Weinstein and Michael Kassan Join Board
12/14/2005 8:00:12 AM

NEW YORK, Dec 14, 2005 (BUSINESS WIRE) -- Six Flags, Inc. (PKS) announced today that the deadline for submission of final bids in its sale process has passed without any formal bids being received. The board of directors has unanimously ended the sale process

Six Flags also announced the appointment of Mark Shapiro as President and Chief Executive Officer, effective immediately. This appointment follows the mutual decision of the board of directors and Kieran Burke to terminate the employment of Mr. Burke as Chief Executive Officer, President and Chief Operating Officer. As expected, concurrent with his appointment as Six Flags CEO, Mr. Shapiro resigned his position as CEO of Red Zone LLC, a private investment firm founded by Mr. Snyder.

Daniel M. Snyder, Chairman of the Board, said, "With the sale process over, Mark Shapiro will focus on implementing new operational strategies that will help to maximize stockholder value in the long term. We recognize the Company's significant debt load and the effect that such debt has on any transaction involving the Company. We are committed to bringing the debt load to a more appropriate level."

"I am thrilled to now have the opportunity to revive Six Flags and implement the strategy we believe will unlock value for all stockholders," said Mark Shapiro.

Six Flags' board of directors also unanimously voted to add Jack Kemp, Harvey Weinstein and Michael Kassan as directors.

Mark Shapiro, 35, served as the Executive Vice President, Programming and Production of ESPN, Inc. from September 2002 to October 2005. From July 2001 to September 2002, he served as Senior Vice President and General Manager, Programming at ESPN. Prior to July 2001, he was Vice President and General Manager of ESPN Classic and ESPN Original Entertainment. Since October 1, 2005, Mr. Shapiro has served as Chief Executive Officer of Red Zone LLC.

Jack F. Kemp, 70, is the chairman of Kemp Partners, a strategic consulting firm he founded in July 2002. He has served as a director of Oracle Corporation since December 1996 and previously served as a director of Oracle Corporation from February 1995 until September 1996. From July 2004 to February 2005, Mr. Kemp was a Co-Chairman of FreedomWorks Empower America, a non-profit grassroots advocacy organization. From January 1993 until July 2004, Mr. Kemp was Co-Director of Empower America, which merged with Citizens for a Sound Economy to form FreedomWorks Empower America. Mr. Kemp served as a member of Congress for 18 years and as Secretary of Housing and Urban Development from February 1989 until January 1993. In 1996, Mr. Kemp was the Republican candidate for Vice President of the United States. Mr. Kemp also serves as a director of Hawk Corporation, IDT Corporation, CNL Hotels and Resorts, Inc. and InPhonic, Inc.

Harvey Weinstein, 53, is the Co-Chairman of The Weinstein Company, a multi-media company that officially launched on October 1, 2005. In 1979, Mr. Weinstein and his brother founded Miramax Films, which has released some of the most critically acclaimed and commercially successful independent feature films, including The Aviator, Finding Neverland, Chicago, Gangs of New York, Shakespeare in Love, Good Will Hunting, Pulp Fiction and My Left Foot. In 2004, Mr. Weinstein was named a Commander of the Order of the British Empire by Queen Elizabeth II in recognition of his contribution to the British film industry. Mr. Weinstein has also produced several award winning shows on Broadway and around the world, including The Producers, Gypsy, La Boheme, Wonderful Town and this season's All Shook Up, Sweet Charity and Dirty Rotten Scoundrels.

Michael E. Kassan is an internationally recognized leader in the area of media, advertising and entertainment. Mr. Kassan is and has been a strategic/brand development consultant to brands and companies such as Unilever, The Walt Disney Company, Sony Pictures Television International, Chrysler, The Home Depot, Microsoft XBOX and Bear Stearns (Constellation Ventures). Previously, Mr. Kassan served as the President/Chief Operating Officer and Vice-Chairman of Initiative Media Worldwide, a division of The Interpublic Group of Companies, at the time, the largest and most diversified media management company in the world. While there, he was the architect of the firm's international expansion and helped grow media billings from $1.5 billion to over $10 billion. Mr. Kassan was counsel to the law firm of Christensen, Miller, Fink, Jacobs, Glaser, Weil & Shapiro and has also served as President and Chief Operating Officer of International Video Entertainment (Artisan Entertainment). Mr. Kassan has been a director and advisor to the Board of the Hollywood Radio and Television Society and the Commission on California State Government Organization and Economy. He also has been Chairman of the Senate Select Committee on the Entertainment Industry in California and, in 1998, was elected to the Board of the American Advertising Federation. Mr. Kassan has also been a director of H.E.L.P Group, Big Brothers of Los Angeles, Stephen S. Wise Temple and Skirball Cultural Center.