The amusement park company Six Flags is seeking Chapter 11 bankruptcy protection, saying it needs to reorganize and shed $1.8 billion of debt.
Mark Shapiro, the New York-based company's chief executive officer, says the move won't affect the operation of its 20 theme parks in the U.S., Mexico and Canada.
Six Flags says it actually had a great year in 2008. It saw 25 million visitors and posted record revenues. But executives are trying to lighten a $2.4 billion debt load that they say is unsustainable.
Saturday's bankruptcy filing came after an earlier plan to negotiate an out-of-court deal with creditors failed.
Six Flags shares have traded below $1 since September. They closed at 26 cents on Friday.
A "great year". Now while the $1.11 a share the company lost last year is better than the $2.49 and $2.43 it lost the previous two years, I think only the pathologically incompetent would call it "a great year". For those of you wondering, since Daniel Snyder took over the company, they never made a dime, or a penny.
Here is a brief review of some thoughts on Six Flags here from the past:
It is an interesting timeline of events as I go back through the old posts. You can see some them in order here, here, here, here and finally here. Just recently in March I wrote:
Now, the story of Six Flags is not one of a bad economy, although it is certainly a factor. The main story is a poorly run operation saddled with far too much debt and a lousy consumer experience.
Teenagers love the place, just ask any of them. It is designed for them from the rides to the entertainment to the layout. But, teenagers are not where the money is. It is families that are. Six Flags is quite possibly the least family friendly place I have ever been too. That is their downfall.
Since my boys were born we have done Disney (NYSE:DIS), Hershey Park (NYSE:HSY), Sesame Place, Canobie Lake (NH), Storyland (NH) and Santa's Village (NH). All were incalculably better experiences than Six Flags. Talking to other folks, this is not an uncommon experience.
Six Flags will go under, of that there has never been a doubt, I wish the next owners better luck. They have great properties, they just need better people to run them.
The bankruptcy filing will wipe out the ownership stake of Washington Redskins owner Daniel Snyder, who took control of Six Flags in a public and contentious proxy fight in late 2005 and brought in his own management team who have finished the company off.
"Stockholders would have been better off hiding their money under a mattress" than investing in the company under the prior management, Mr. Snyder wrote in a letter to Six Flag shareholders in October 2005, during the proxy battle. At the time, Six Flags shares were trading at about $7.25, while today they are worthless.
There is nothing left here for shareholders, they are done. Debtholders will assume the company and the only thing left to decide is whether to break it up, sell it, or make a go of it.
Don't get me wrong, I like trying to enjoy myself with my <6 yr. old children while avoiding the cursing and smoking teenage mobs who run rampant in the park as much as the next guy, but I think it tends to put a damper on most people's day.
Whatever the new owners decide to do, who ever picks up the pieces and tries to make a go of it, I have one tip for them: Focus on families.