Six Flags Entertainment Corp. is the world's largest amusement park corporation based on quantity of properties and the 4th most popular in terms of attendance. The company maintains 21 properties located throughout North America, including theme parks, thrill parks, water parks and family entertainment centers. In 2009, Six Flags properties hosted 23.9 million guests.
The company was founded in Texas and took its name from its first property, Six Flags Over Texas. The company maintains a corporate office in Midtown Manhattan, New York City and its headquarters are in Grand Prairie, Texas.On June 13, 2009, the corporation filed for Chapter 11 bankruptcy protection and successfully exited the restructuring 11 months later on May 3, 2010.
The name refers to the six flags that have flown over the state of Texas during its history: Spain, [rance, Mexico, the Republic of Texas, the Confederate States of America and the United States of America. The Six Flags chain began in 1960 with the creation of Six Flags Over Texas by Angus G. Wynne of Arlington, Texas, which initially featured a Native American village, a gondola ride, a railroad, some Wild West shows, a stagecoach ride, and "Skull Island", a pirate-themed adventure attraction. There was also an excursion aboard "French" boats through a wilderness full of animated puppets. Over time, all of those attractions, except for the railroad, would be replaced by others, such as roller coasters, swing rides, log flumes, and shoot-the-chute rides, as well as an observation tower.
Growth and Acquisitions
The original park in Arlington was sold in 1966 to a subsidiary of the Pennsylvania Railroad, which was actively pursuing non-railroad investments in an effort to diversify its sources of income. (In 1968, the company merged with the New York Central Railroad to form Penn Central Corp.) With the new owners came a more abundant supply of capital for geographic expansion and park additions. Six Flags opened Six Flags Over Georgia in 1967 and Six Flags Over Mid-America in 1971, which would, along with Six Flags Over Texas, be the only three parks that would be constructed by the company.
The company continued to grow by acquiring other independent parks. It purchased Astroworld in Houston, Texas in 1975, Great Adventure in Jackson, New Jersey in 1977 and Magic Mountain in Valencia, California in 1979 before Penn Central sold its assets to Bally Manufacturing Corporation in 1982. In 1984, the Great America theme park in Gurnee, Illinois was acquired from the Marriott hotel chain.
In 1984, as a result of its acquisition of Great America, the company acquired the rights to Warner Bros.' Looney Tunes animated characters for use in their properties. Bally surrendered control of the chain to Wesray Capital Corporation in a leveraged buyout in 1987. Time Warner quickly began to gain more leverage in the company, gaining a 19.5% stake in Six Flags in 1990 and then 50% in 1991, with the remaining shares of the company being split by Blackstone Group and Wertheim Schroder & Company. Time Warner purchased the remaining stakes in the company in 1993, changing the company's name from Six Flags Corp. to Six Flags Theme Parks, Inc.
In 1996, Six Flags acquired the Fiesta Texas theme park in San Antonio, Texas.
History of Premier Parks
Premier Parks originally operated as the Tierco Group, Inc., an Oklahoma-based real estate company. The company purchased the Frontier City theme park in Oklahoma City in 1982 for $1.2 million. Tierco had no intention of entering into the amusement park business, however. Company officials described Frontier City as "beat up" and "run down"; they planned to demolish the park, subdivide the land, and build a shopping center. However, given the economic downturns prompted by an oil bust in Oklahoma, developers lost interest in the idea of converting the park into a shopping center. So in 1984 Tierco hired Gary Story as general manager of Frontier City and sunk about $13 million into improving the park. As the new manager of Frontier City, he would quadruple that park's attendance and revenues. Under his leadership, two new rides and a petting zoo were added to the park along with a new ticket booth, sales office, and improved food service.
In 1988, Tierco shifted its strategic direction from real estate to amusement parks. It sold much of its property during this time, which generated capital to reinvest in Frontier City. Once this reinvestment paid off in terms of increased business and profits, more capital became available, which meant further growth. Tierco opened White Water waterpark in 1991 (the name later being changed to White Water Bay). The company realized the key to boosting a park's attendance was to add new and exciting rides and make it more attractive to families.
Tierco acquired the financially troubled Wild World in Largo, Maryland, in 1992 and later changed that park's name to Adventure World. With a $500,000 investment, Tierco expanded Wild World's kiddie section and remodeled its buildings to give the park a tropical look and feel. Story was promoted to executive vice-president after the purchase of Wild World. In 1994, he was promoted again to president and chief operating officer (COO). More flat rides and a couple more roller coasters were added to that park.
Since Tierco was on its way to becoming a "premier" regional theme park operator, in 1994 it changed its name to Premier Parks, Inc. Kieran E. Burke, chairman and chief executive officer (CEO), noted that the new name signified the beginning of a new era for the company. At the end of 1994, Premier Parks acquired an agreement to manage Elitch Gardens in Denver, Colorado which had just relocated from outside the city.
During the next few years, Premier picked up speed. In 1995, the company acquired parks from Funtime Parks, Inc., namely Geauga Lake near Cleveland, Ohio, Wyandot Lake in Columbus, Ohio, Darien Lake, near Buffalo, New York, and Lake Compounce near Hartford, Connecticut. In 1996, Premier added to its portfolio. It bought Elitch Gardens in Denver, Colorado outright, Waterworld USA waterparks in Sacramento and Concord, California, Riverside Park, near Springfield, Massachusetts, and Great Escape and Splashwater Kingdom at Lake George, New York. Premier immediately sold Lake Compounce to Kennywood.
Geauga Lake, Wyandot Lake, and Adventure World had water parks within their amusement parks while Frontier City had one that was adjacent and has separate admission. Riverside added their water park in 1994 just before selling to Premiere. Premier Parks also added water parks to Darien Lake, Lake Compounce (right before selling it), Elitch Gardens, and Great Escape in 1995 and 1996.
Premier went public in 1996 and raised nearly $70 million through an initial offering at $18 a share. The company planned to use the money to expand its ten parks and acquire new ones. In 1997, Premier purchased Kentucky Kingdom, in Louisville, Kentucky and Marine World, near San Francisco. A second public offering at $29 a share raised an additional two million dollars. A water park was added to Kentucky Kingdom in 1998. Nearly 8.8 million people visited Premier's parks in 1996, making it the second largest chain in the world by attendance. They added amusement park rides and roller coasters to Marine World in 1997 as well. Premier Parks also made plans to acquire more parks and wound up buying a larger corporation late that year.
Acquisition of Six Flags by Premier Parks
Six Flags Theme Parks Inc. was purchased in whole on 1 April 1998 from Time Warner by Premier Parks for $1.86 billion. Premier then began to apply the Six Flags name to a number of smaller parks that the company had already owned, including Darien Lake, Elitch Gardens, Kentucky Kingdom and Adventure World.
In 2000, Premier Parks assumed the Six Flags Theme Parks, Inc. name and continued re-branding its parks, most notably the former Geauga Lake into Six Flags Ohio. Six Flags began vigorously expanding, attempting to branch out internationally, acquiring numerous properties across the country and overseas including the Walibi chain and historic Belgian park Bellewaerde in Europe, La Ronde in Canada, and Reino Aventura in Mexico. Three of those parks were re-branded as Six Flags parks—Walibi Flevo became Six Flags Holland, Walibi Wavre became Six Flags Belgium and Reino Aventura became Six Flags Mexico.
In 2001, Six Flags acquired the former SeaWorld Ohio from Anheuser-Busch, merged it with the adjacent Six Flags Ohio and re-branded the park again, this time into Six Flags Worlds of Adventure. The park was positioned to compete against northern Ohio's more famous amusement park, Cedar Point.
In 2004, Six Flags began to close and sell properties in an effort to help alleviate the company's growing debt. On March 10, Six Flags sold its European parks, with the exception of the Movie World park in Madrid, Spain, to Star Parks Group. The Madrid park was sold back to Time Warner and renamed "Parque Warner Madrid". In April that year, Six Flags determined that the investment required to keep Worlds of Adventure competitive with Cedar Point would be too great, and thus the company sold the park to Cedar Fair, the owner of Cedar Point. These sales raised $345 million in an effort to relieve Six Flags' massive debt.
In 2005, Six Flags endured even more turmoil. Some of the company's largest investors, notably Bill Gates's Cascade Investments (which owned about 11% of Six Flags at the time) and Daniel Snyder's Red Zone, LLC (which owned 12%), demanded change. Indeed, on August 17, 2005, Red Zone began a proxy battle to gain control of Six Flags' board of directors. Later that month, Six Flags New Orleans would be severely damaged by Hurricane Katrina.
On September 12, 2005, Six Flags Chief Executive Officer Kieran Burke announced that Six Flags Astroworld would be closed and demolished at the end of the 2005 season. The company cited issues such as the park's performance, and parking issues involving the Houston Texans football team, Reliant Stadium, and the Houston Livestock Show and Rodeo, leveraged with the estimated value of the property upon which the park was located. Company executives were expecting to receive upwards of $150 million for the real estate, but ended up receiving $77 million when the bare property (which cost $20 million to clear) was sold to a development corporation in 2006.
On November 22, 2005, Red Zone announced it had gained control of the board. Kieran Burke was removed on December 14, 2005 and replaced by Mark Shapiro, former Executive Vice President of Programming at ESPN. Six Flags then named former Representative Jack Kemp, entertainment mogul Harvey Weinstein, and Michael Kassan, the former president of the Interpublic Group of Companies Incorporated, to their newly revamped board of directors.
Even with the new management team, the sell-off would continue into 2006. On January 27, Six Flags announced the sale of the Frontier City theme park and White Water Bay water park, both located in Oklahoma City, Oklahoma, at the conclusion of the 2006 operating season. At the same time, Six Flags also announced its plan to close corporate offices in Oklahoma City, moving its headquarters to New York City. Six Flags CEO Mark Shapiro said he expected the parks to continue operation after the sale, a lesson the company learned after its public relations debacle with the closure of Astroworld.
In June 2006, Six Flags announced it was considering closing or selling up to six of its parks, including Elitch Gardens, Darien Lake, WaterWorld in Concord, California, Wild Waves and Enchanted Village in Federal Way, Washington, Splashtown in Houston, Texas and, most notably, Six Flags Magic Mountain. In addition, Six Flags also announced the sale of Wyandot Lake in Powell, Ohio to the Columbus Zoo and Aquarium, which is located next to the park. Ultimately, Six Flags Magic Mountain was spared, with the remaining six parks sold on January 11, 2007 to PARC Management for $312 million, $275 million cash and a note for $37 million.
The company's cash flow had decreased by over 120 million dollars annually during the Shapiro years and in October 2008, Six Flags was warned its stock value had fallen below the required minimums to remain listed on the New York Stock Exchange. With the 2008-2009 global financial crisis weighing both on consumer spending and the ability to access credit facilities, Six Flags was believed to be unable to make a payment to preferred stockholders due in August 2009. Management saw the business as a sound one, noting that attendance across the company's parks increased slightly in 2008 compared to 2007. Six Flags CEO Mark Shapiro said that the company's problem was the declining attendance and cash flow created by his new management initiatives . If not resolved, the company warned in its 2008 annual report that the situation might require a Chapter 11 bankruptcy filing, with Six Flags already retaining counsel should that occur. The company stated at the time that it expected business to continue as normal in the event of such a filing, although one analyst believed attendance at the company's parks would decrease by six percent, suggesting parents would be leery of letting their children ride a roller coaster operated by a bankrupt company. In April 2009, the New York Stock Exchange announced it would delist Six Flags' stock on April 20, a decision that the company did not intend to appeal. On June 1, 2009, Six Flags announced they would delay their $15 million debt payment further using a 30-day grace period. Less than two weeks later, on June 13, the firm filed for Chapter 11 bankruptcy protection, but issued a statement that the parks would continue to operate normally while the company restructured. On August 21, 2009, Six Flags' Chapter 11 restructuring plan was announced in which lenders would control 92% of the company in exchange for cancelling $1.13 billion in debt. The approval of this plan is pending per the decision of the presiding U.S. Bankruptcy Judge.
One component of the restructuring was negotiating a new lease agreement with the Kentucky State Fair Board, which owned much of the land and attractions for Six Flags Kentucky Kingdom. Six Flags had asked to forgo rent payments for the remaining nine years of its current lease agreement in exchange for profit-sharing from the park's operations. When it appeared that the offer had been rejected, Six Flags announced in February 2010 that it would not re-open the park. However, the Kentucky State Fair Board stated at the time that they were still open to negotiating a revised lease agreement.
On April 28, 2010, the company's bondholders reached an agreement on a reorganization plan. Junior note holders, including hedge funds Stark Investments and Pentwater Capital Management, assumed control of the company, while senior note holders were paid in cash. Despite objections from some parties who stood to gain nothing, the bankruptcy judge approved the plan on April 30, 2010. As part of the settlement, Chairman of the Board Dan Snyder was removed, while Chief Executive Officer Mark Shapiro briefly remained in his post.
Exit from Bankruptcy & Transition
Six Flags officially emerged from bankruptcy protection on May 3, 2010, and announced plans to issue new stock on the New York Stock Exchange. Amid suspected disagreements regarding the future of the company with the board, Shapiro left the company and Al Weber, Jr. was brought in as interim President and CEO. The company announced their corporate headquarters would move from New York City to Grand Prairie, Texas.
Six Flags announced that Jim Reid-Anderson would replace Weber and become Chairman, President and CEO on August 13, 2010.
Initially, Six Flags parks would prepare separate marketing campaigns for each park, sometimes with special themes (like the 25th anniversary of Six Flags Great America and the 35th anniversary of Six Flags Over Georgia in 2002). In 2004, Six Flags began a series of commercials linking all of the parks. The commercials were notable for a new mascot, "Mr. Six", an apparently feeble old man in a tuxedo and red bow tie. In many of the commercials, Mr. Six would slowly exit a multi-colored bus, only to start frenetically dancing to the Vengaboys' "We Like to Party". The commercials were an immediate hit and Mr. Six almost instantly became the official mascot, although he was initially retired after the 2005 season. Since 2008, Six Flags' TV ads have a "Fun-O-Meter" in which the beginning of the ad may show something boring or embarrassing and a man's face judges it "One Flag!" or sometimes "Two Flags!" Then roller coasters and attractions of Six Flags are shown and says "Six Flags, More Flags, More Fun!" which is the current slogan of Six Flags parks. However, the thick accent of the Asian man in the original commercials had drawn criticism for being an offensive caricature. In 2009, the Mr. Six character came back from retirement and replaced the Asian man in Six Flags' ads, still using the Fun-O-Meter.
Six Flags has licensed its name and its theme park creations to other companies, who have used these assets to create licensed products. One such example is the theme park simulation game Roller Coaster Tycoon 2, which featured recreations of Six Flags parks and rides that could be expanded and operated at the player's discretion. Six Flags has also partnered with Brash Entertainment to create a video game called Six Flags Fun Park." It allows the player to explore the themed areas and mini-games representative of a visit to a Six Flags park. In the game, players are tasked with quests that encourage them to explore the park's universe. After creating a unique custom character, Six Flags Fun Park patrons can win prizes, and compete with other players in 40 mini-games. Although the video game is called Six Flags Fun Park, it lacks any major reference of Six Flags. This caused some to speculate that the video game was created then the rights to the name of the game were sold as a way to pay for the game's development.
In recent years, Six Flags has created strategic partnerships with other companies who would feature their products inside the parks. On March 30, 2006, Six Flags announced that it will sell no other pizza besides Papa John's at its parks. In turn, Six Flags will receive an annual sponsorship and promotional opportunities from Papa John's, though financial details of the deal have not been disclosed. Other recent partners have included Cold Stone Creamery, Johnny Rockets, Tyson Foods (chicken), Chrysler, and Nintendo, which added testing stations in several parks to show off its Wii console.
On June 19, 2007, Six Flags announced it had purchased 40% of Dick Clark Productions, which owns rights to American Bandstand and other shows and productions.