Buying it to close it?

Here’s a thought – could they be buying it to eliminate the competition and get rides for their other parks at bargain basement prices?

Kinzel retires in 2008. What are the odds of a “park closing” announcement by then? I’d enjoy seeing the Aurora politicians begging forgiveness for their unreasonable zoning and development stances throughout the years. Cedar Fair might see some “lovely” incentives to keep the park open – maybe even covering the entire $145M they paid. They certainly have the upper hand.

It doesn’t make sense to have two competing parks so close to each other. It wasn’t until I thought about the price (only $145M) and the assets included, when the strategy of buying it to close it dawned on me as making the most sense.

FWIW, I think Cedar Fair was smart to “jump the gun” and buy it BEFORE Six Flag’s bankruptcy (inevitable in my opinion.) I don’t think they would have acquired the assets any cheaper and now they won’t have to worry about bidding competition.

I know mine is a "minority" opinion, but I thought I’d post it for comments anyway. Eliminating this park probably puts a half million more people through Cedar Point's turnstiles a year... That pays for itself pretty quickly, not to mention you get some great coasters for the other Cedar Fair parks.

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Hey, I heard a rumor that Millennium Force is sinking...
*** This post was edited by Millenium Force is sinking too 3/12/2004 10:40:06 AM ***

Not a chance. They were never really that worried about the park being competition in the first place. Attendance certainly hasn't been affected.

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Jeff - Webmaster - GTTP - My Blog
Blogs, photo albums - CampusFish
What time does the water show start?

Closing that park will not cause the attendance at Cedar Point to increase. It may, imo, cause Cedar Point's attendance to drop, because the people over in cleveland would be exteremly mad. Since Cedar Fair would be taking away there nice little family park and would be more willing to drive to another park. I am sure that they will not be closing Geauga Lake anytime soon. Instead of taking the coasters out and putting them in other park I am sure they are gonna be waiting to but in new coasters. Why were they smart to 'jump the gun' and buy it Before Six Flag's go bankrupt. Usually if a company goes bankrupt people can get that companys assest very cheap, I may be wrong.

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'04 TL Speed Zone
'03 Speed Freaks (Hats n Such)
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TaeKwon-Do First Degree Black Belt. (1st dan)

I don't see it being closed. I believe there is room in Northern Ohio for two parks. The two survived together for 100 years before Six Flags decided to go head-to-head. What was the difference then?

Well for one thing, Geauga Lake concentrated on the local market. Season passes were cheap. Admission prices were always lower than Cedar Point. Major attractions came less frequently. The emphasis was on family. (Turtle Beach was the best kids area of it's kind for many years.)

I lived east of Cleveland and while I went to CP maybe once a year I spent my summers at Geauga Lake. It wasn't unusual for me to go there at least once a week.

Six Flags felt they could market their park to the same folks Cedar Point did and Six Flags was wrong.

Busch Gardens in Tampa is about the same distance from the Orlando giants as Geauga Lake is from Cedar Point and BGT holds its own.

While the size of Geauga Lake may be reduced I really don't see it being closed all together.

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"You can dream, create, design and build the most wonderful place in the world...but it requires people to make the dreams a reality."

Usually if a company goes bankrupt people can get that companys assest very cheap, I may be wrong.

I think they got a bankruptcy price on the assets without having to worry about any competition outbidding them. In a bankruptcy, they might also have to "take it all", including assuming some of the debt and other liabilities. This was the best of both worlds.

Attendance certainly hasn't been affected.

I didn't mean to imply CP attendance was affected. What I'm implying is that CP attendance would increase with the elimination of SFWOA. They weren't "serious" competition, but to claim they didn't pull people away (especially from the east side of Cleveland) and require Cedar Fair to spend more on advertising is absurd. There are undoubtedly many "once a year" amusement park visitors who went to SFWOA who would now go to CP instead...

Like I said, I expected my opinion to be in the minority. Just food for thought.

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Hey, I heard a rumor that Millennium Force is sinking...

I doubt SFWoA pulled people away from Cedar Point. A case can be made that SFWoA was actually less competition than the individual Geauga Lake and Sea World parks were before Six Flags.

The combined attendance at the two parks was about 2.5 to 3 million people. SFWoA never got close to that.

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I'd rather be in my boat with a drink on the rocks,
than in the drink with a boat on the rocks.

It's food for thought, but I am not eating it. :-)

Cedar Fair's business philosophy is to continue to grow it's business by investing in it's existing parks and making acquisitions that are smart for the company.

Cedar Point's growth in the future will continue to rely heavily on the resort side of things. More hotel rooms is part of that but lengthening the stay is also an issue. I do think they are some potential's in now selling a 3 night/4 day packages that would include CP, Soak City and a bus ride to Geauga Lake.

Back in the day my grandparents took a boat from Cleveland to Cedar Point. What about a nice cruise from the Point to Cleveland where you would grab a bus down to Geauga Lake? That sounds pretty attractive to me.

There are plenty of people in the Cleveland/Akron/Canton/Youngstown area who would not make a trip to Cedar Point but who will make a trip to Geauga Lake.

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"You can dream, create, design and build the most wonderful place in the world...but it requires people to make the dreams a reality."

I really like that cruise idea!

Cedar Fair's business philosophy is to continue to grow it's (sic) business by investing in it's (sic) existing parks and making acquisitions that are smart for the company.

I agree, and don’t see anything inconsistent with selling SFWOA. In fact, I think I can make a better business case for closing it than you can for keeping it open.

It’s investing in their existing parks - they bought $145M of pretty decent rides which would be relocated. It’s financially smart for that reason, and strategically smart for eliminating the only competitor in the Cleveland area ("smart for the company.")

What would NOT be smart would be to acquire a park hemorrhaging money (what SFWOA was doing) thinking you could perform a miracle; one that’s located in an area where the local government and community is somewhat hostile; diverting important and significant monies which would ordinarily be used for improving existing parks.

None of us will know for years what the real intent is, but it's fun to speculate...

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Hey, I heard a rumor that Millennium Force is sinking...
*** This post was edited by Millenium Force is sinking too 3/12/2004 11:54:50 AM ***

That park will remain open.

Look at the demographics of that area.The park is located in the corners of eastern Cuyahoga, Westeren Portage and Geuga counties. It is in the heart of suburbia, and suburbia is all families with young kids.

My best guess is that CF will not develope it into a small version of CP, but as a park great for families with small children. With all of the zoning restrictions they would have a hard time building it up big like CP anyway.

The area is also urban sprawl at it's very worst. 690acres is a little much for a park of this size and catering to family clientle (not to mention as above the zoning restrictions keep CF from doing a whole lot). I would be willing to bet big dollars CF will sell off most, if not all, of the 'Sea World' land to a private real estate developer.They could get a very healthy ROI on the sale of that land alone.

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Final 2003 counts:
Millennium Force Laps: 9
Magnum Laps: 9
Raptor Laps: 7
Trips to CP: 10

I sure would love to see a train ride around the lake with a couple of trestles across the water on either end. One of the drawbacks to the two parks was the size and hoofing it back and forth with small children is no picnic.

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"You can dream, create, design and build the most wonderful place in the world...but it requires people to make the dreams a reality."

Millenium Force is sinking too, I don't think you're grasping the reasoning behind the buy. Kinzel has said before that not buying Geauga Lake when he had the chance was his biggest regret. Now he has corrected that, and it going to try to capitalize upon it like he would have before. Why crush the park and upset the locals when you can invest in it and offer combo park passes and such?

I foresee no new major rides for GL for the next 2-3 years. This period of time will give Cedar Fair ample time to evaluate current management and to make any necessary changes. There will definitely be a crackdown on employee behavior compared to the Six Flags approach to it. CF plans to build the park back up from the inside starting with the infrastructure. After this adjustment period, I'm sure that some kind of addition to the park will be in the CF plans by then.

Cedar Fair is going to do what Six Flags should have done...focus on atmosphere of the park before the thrills.

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Everything that has a beginning has an end.

The Matrix Revolutions

Personally, I don't see them moving any of Geauga Lakes rides. To me, it just doesn't make any sense. With the rides they have right now, they could do a very good job marketing both parks to try and get people to visit them. If they move some of the coasters out of the park, they will have a harder time marketing to the same crowd. A good example that I can think of is at Coastermania this year. I met some people in line for the MF ERT. That night, while in line for the Magnum ERT, I saw them again. They had gone to WoA for the day. Yes, I realize they were coster enthusiasts, not the general public. What my point is, anyway, is that they currently have a good collection of rides, and can't think of a good reason for them to move any of them. They have 690 acres of land, so moving one for space is not an issue. As a note: kids and families do enjoy roller coasters too. Not as much as teen age people, but they do enjoy them. Also, the variety of rides at Cedar Point and Geauga Lake seem to complement each other nicely.

I realize that Cedar Fair is planning to market the park as a family park. Is there any chance that they might try and capture some of the thrill market too, having a good collection of coasters?

Claiming that canabalizing the park is a better investment of dollars is claiming that theh park has no chance of being a money maker, when in fact it not too long ago it was. Running the park like it did before the purchase of Sea World could easily put several million a year into the company's pocket.

GLP never had a big problem in beating down Bainbridge whenever they wanted to break the zoning codes. It always goes back to the fact that it has been there for over one hundred years. Also the park has no land in Cuyahoga. I would estimate that half the old SWO was in Aurora and only a partof the water park was in Aurora. The bulk of the park and land surrounding the park is in Bainbridge (geauga county) Township. If CF wants to build in this park they can.

Don't think that turning around GL is going to be easy. If it were straightforward, Six Flags would have done it (LOL, I know, I know... I'm giving them way too much credit!)

The combination of poor location, poor accessibility, and generally hostile government/politics all played a role (along with ineptness of SF management) in GL's fall from grace. Attendance won't magically jump from 1.5M back to 2.8M overnight, nor will they miraculously stop hemorrhaging money just because Cedar Fair put their name on the sign.

IF Cedar Fair tries to turn them around, it will be time-consuming and expensive (and begs the question "WHY?," when focusing that same precious capital on Cedar Point would return so much more.)

A lot about this acquisition doesn't make sense to me. That's why I'm looking for alternatives, BUSINESS-SAVVY alternatives. Some of the smartest business moves of all time have come from buying your main competitor to take them out of the market ("buy it to close it".) I can't discount that's what's happening here...

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Hey, I heard a rumor that Millennium Force is sinking...

I don't foresee GL closing in the future. Kinzel has repeatedly said that he regretted not buying it when he had the chance years ago and now he has it.

If you look at competing parks like SFMM & Knott's/Disney, Disney/Universal & BGT, PGA & SFMW, Hershey & Dorney, etc. These parks are within an hour to an hour and a half from each other yet consistently draw about the same amount of people each year. There is no reason why CP and GL can't co-exist with each.

As far as ride removal goes, anything is possible. CP has even removed rides recently and sent them to other parks, mostly MIA. If they were to remove a coaster, I could see they removing Superman. CP has WT, it has a small footprint, wouldn't cost as much to remove as some of the other coasters and would be a great addition to any park (*cough* Dorney *cough*).

I wouldn't be surprised to see a hotel go up on the Sea World property if they don't sell it off and maybe even some employee housing.

I like Chief's train idea. Remove that 2 mph monorail that is about worthless and have a nice relaxing train ride around the lake.

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Millenium Force is sinking too said:
Don't think that turning around GL is going to be easy. If it were straightforward, Six Flags would have done it

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It's very straight forward... don't operate an animal park and restore the name. "Geauga Lake" has far more meaning to locals than "Six Flags" ever did. The parks never should have been combined, and since Busch, the company that is most capable to run such parks, wanted out, it's safe to say that it's not a sustainable business.

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Jeff - Webmaster - GTTP - My Blog
Blogs, photo albums - CampusFish
What time does the water show start?

Usually if a company goes bankrupt people can get that companys assest very cheap, I may be wrong.

I think they got a bankruptcy price on the assets without having to worry about any competition outbidding them. In a bankruptcy, they might also have to "take it all", including assuming some of the debt and other liabilities. This was the best of both worlds.

The price Cedar Fair paid for Geauga Lake is actually pretty expensive. They paid nine times last year's operating profit, where the other aquisitions they made were more like five times. They obviously believe, as most of us do, that they will vastly improve that operating profit. For that price they could have bought a ton of rides, so the canabilizing theory won't hold water. The size of the acreage purchased which including the lake and both parks is about 700 acres, almost twice the size of Cedar Point. Don't be suprised if some of that gets sold in the future.

There is no hidden agenda in this purchase, they plan to do exactly what they said they plan to do, operate a well run regional park, just like they do elsewhere.

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Some of the smartest business moves of all time have come from buying your main competitor to take them out of the market ("buy it to close it".)

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main competitor? We're not talking floppy disks or soda here. The casual 1 time a year, just because it's something to do, park-goer from Conneaut, OH isn't gonna drive the extra hour and a half to goto CP.

$145million is a HUGE price to pay to shut out people who don't really care that much about amusement parks but go, every other year or so, just to go.

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:james
magnum crew 2002
johnny rockets 2003, 2004
*** This post was edited by magnumjames 3/15/2004 5:52:04 PM ***

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D. A. Rossi said:

The price Cedar Fair paid for Geauga Lake is actually pretty expensive. They paid nine times last year's operating profit, where the other aquisitions they made were more like five times.

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Yes, that's what the analyst on the conference call said. So? That statement lacks context. It was dirt cheap given the assets of the park. It also doesn't even remotely consider the operating profit potential under different management with far less in the way of expenses.

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Jeff - Webmaster - GTTP - My Blog
Blogs, photo albums - CampusFish
What time does the water show start?