Theme Park, Amusement Park and Attractions Industry News

Have the large money funds that have been buying amusement parks in recent years overpaid for the properties?

Dennis Speigel, International Theme Park Services: The “roll up” of the industry began officially when Premier Parks bought Six Flags and the subsequent park properties. They severely over paid for many of the parks in their quest to become the largest regional theme park operator. Unfortunately their business plan was flawed and created the problem that the current management is living with today – incredible debt. As soon as Prermier took over Six Flags they began losing money on a company-wide basis and never showed a profit, placing one of the industry icons in a disastrous positions. They paid too much. Today companies such as Parque Reunidos, who have been very active in the acquisition of leisure attractions, are paying reasonable multiples of EBITDA for properties. This is a prudent approach to business and to the industry. Managing the debt is a problem that acquirers have to address. “Biting off too much debt” can be a problem no matter how polished an operator you may be.

Tony Rossi, International Rides Management:  Did they overpay? In my opinion, no they have not. Let’s look at some of the US properties in question – Darien Lake, Elitch Gardens, Frontier City, Indiana Beach and Clementon Lake Park. As far as the former Six Flags properties go, these all have long standing histories as parks that have grown and were prosperous. The new ownership groups feel, and rightly so, then they can again be prosperous, regional amusement parks. If the new ownership focuses their attention on its core clientele it can show that these were and are sound investments. Let’s take the focus away from the name brand, expensive theming and spend some of that money on what the clientele is looking for – good entertainment value in these trying times. Indiana Beach’s new ownership knows the camping resort business. The park can feed on this experience and grow the campground to add to the clientele that is patronising the park. Clementon Lake Park is a traditional, historic lakefront amusement park. With the drawing potential of the tri-state area, this park can continue to prosper and grow in the way Lake Compounce has. We have lost way too many of these quaint old parks and I hope the new owners can succeed in preserving and improving Clementon for generations to come.

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