CHARLOTTE, N.C. — Six Flags Corporation said it will conduct a “comprehensive review” of its 42 parks after its merger with theme park operator Cedar Fair earlier this year, and is considering potentially selling some of them.
Six Flags, which moved its headquarters from Arlington in North Texas to North Carolina after the merger with Ohio-based Cedar Fair, announced the plan last week as it released its third-quarter financials.
The theme park operator said it will “conduct a comprehensive review of the portfolio to evaluate the potential divestiture of non-core assets to help reduce leverage” as part of a long-range plan it calls Project Accelerate.
Six Flags and Cedar Fair’s roughly $2 billion merger was closed in July with Six Flags and Cedar Fair moving their combined headquarters to Charlotte, North Carolina.
After the merger, Six Flags operates 27 amusement parks, 15 water parks and nine resorts in the U.S., Canada and Mexico, including Six Flags Over Texas in Arlington and Six Flags Fiesta Texas in San Antonio.
“Since completing the Merger, we have been finding ways to operate more efficiently and reducing unnecessary costs while still delivering a high level of guest service,” Six Flags President and CEO Richard Zimmerman said in a statement. “Four months ago we launched Project Accelerate, a transformational initiative to harmonize our operations and unlock the full potential of the new Six Flags. We have only scratched the surface of what we can accomplish, and we are moving with a sense of urgency to optimize performance and execute our new long-term initiatives.”
Project Accelerate’s other objectives include enhanced guest experience, margin expansion, disciplined capital allocation and IT system integration.
During the analyst call last week, Zimmerman was asked about the potential sale of parks.
“As I think about this portfolio optimization, we’ve done this in the past on the Cedars side, certainly sold two small water parks in 2012, 2013 and we underwent a comprehensive review several years later that led to the sale of the land underneath our Santa Clara park,” Zimmerman said. “Every park in our portfolio has a role if it plays its role right.”
“These are irreplaceable assets, but we also want to make sure that we're investing to drive growth across the combined portfolio,” he added. “So I wouldn't put a time frame on it, but we're going to be very diligent and work methodically through what we think is possible and what would make sense as we think about our capital structure and capital allocation priorities.”
The company, though, has told media outlets it doesn’t plan to close parks.
"We have no plans to close parks," Six Flags spokesman Gary Rhodes said in a statement to the Cincinnati Enquirer.
Zimmerman added on the analyst call that the portfolio review includes excess and undeveloped land.
“This is an exercise that we have undertaken in the past and one that is focused on optimizing our asset base, narrowing our focus and helping us accelerate our planned reduction in leverage,” he said.
Six Flags also released a “playbook for driving long-term success” that includes more attention to food and beverage and keeping parks “comfortably crowded” to drive longer stays and more spending.
Six Flags reported third-quarter net income for the combined company at $111 million, of which $3 million was attributable to legacy Six Flags operations. Net revenue for the third quarter increased $506 million to $1.35 billion.
“Since completing the Merger, we have been finding ways to operate more efficiently and reducing unnecessary costs while still delivering a high level of guest service,” continued Zimmerman. “By the end of 2024, we expect to have delivered $50 million of run-rate cost synergies, and we are already taking steps to achieve the remaining $70 million of anticipated cost savings by the end of calendar year 2025. While we intend to invest back into our parks to enhance the guest experience and drive attendance growth, we are focused on funding those efforts with additional cost savings across the portfolio, allowing us to retain 100% of the realized synergies.”
