News: Cedar Fair shareholders protest free-ticket change; company considering Kings Island

In this article:

http://toledoblade.com/apps/pbcs.dll/article?AID=/20060519/BUSINESS06/605190358

There is a line near the end that reads,

"Mr. Kinzel revealed Cedar Fair is considering buying Kings Island"

Now I realize that considering something and actualy doing something are completely different. I've only been to PKI once because of the distance. However, if I could use my season pass there, I think I would go at least 2 or 3 times a year.

Everyones thoughts?

*** Edited 5/19/2006 12:17:08 PM UTC by Jason Hammond***

This has been floating around for a while now. Was it last year that Viacom said it wanted out of the amusement park industry? There were rumors then that CP may buy one or more of the parks. And they'd be stupid not to look at it.

But "considering" could be as simple as just looking at the cost and potential ROI and nothing more. We'll just have to wait and see if Cedar Fair has gotten more serious about it.

One thing to note is that he's interested in PKI only.

If this goes through, it'll be very interesting to see what CF does with the theme of Kings Island. I can't see them going the same route with the Paramount Movie theme, that they did with the Peanuts theme when they bought Knott's. Another thing is the fact that CF will own three of Ohio's major amusement parks. Kings Island and CP have the most attendance out of all the other seasonal parks in the country. I'm not sure how they'll market the areas where Kings Island territory overlaps Cedar Point's. The buy sounds good though.

http://www.pointbuzz.com/news.htm?id=910

I love Cedar Point and I love Kings Island.

I don't love the idea of Cedar Fair owning and operating Kings Island. Both parks are thrill parks but the guest experience is completely different in a way that the parks can distinguish themselves from each other.

Even though I don't like the idea of it, it's a pretty darn good buy and it's a great growth opportunity for Cedar Fair.

As far as the perks go to the shareholders, that is kind of crappy that they changed that for those who aren't season pass holders.

~Rob Willi

I have some suspicions that Kings Island may not be the only park of interest.

First of all, it's not Viacom. The company split, and Paramount Parks fall in the new CBS Corp. bucket.

The people complaining at the meeting were idiots and morons. Your $29 unit doesn't entitle you to anything other than the quarterly distribution. How rude.

The company owning PKI (or any Paramount Park) wouldn't be bad for any reason I can think of. I hope they go for it.

The market overlap would be the only thing that I can see wrong with it. However it is not enough of an overlap to constitute this being a bad move by Cedar Point.

KI is an amazing well built park with a solid reputation. Other than losing some naming rights and shows, a Cedar Fair ownership would probably not change the park that much.

This is wonderful news and I hope it actually happens.

Well, we're not talking about Rhode Island here where being at the northern and southern extremes is a half-hour walk (or a 2 minute pinball drive if you're a Kennedy). These parks are still 4.5 - 5 hours apart. Some of the direct market overlaps, but not much of it.

Forgot about the Viacom split.

Well well well....

I'd say that this could be part of the "big news" in the amusement industry that Jeff mentioned in a CB podcast....Maybe CF is going after all the Paramount parks? That would certainly give them another big market in California with PGA, not to mention CF's first acquisition in the Southeast US with Carowinds. Even if Cedar Fair only bought say...two or three of these parks, it's still huge. It would certainly make my Cedar Fair season pass more valuable....

That would be amazing. I could see the market overlap in central Ohio being a small issue, but any marketer worth their salary could come up with ways around that without even thinking about it. ("Come north! Come south! Two parks, two experiences, one price! You're just hours away from two of the best and most popular parks etc etc!") Granted, I live pretty much dead-center between GL and CP and there's no combo advertising for that so they might not do that, but I don't see the overlap being more than a minor hurdle for any marketing firm worth anything.

As for the stockholders thing, Jeff's right about that. You don't buy stock in a company for the comps. You're not picking up stock in Microsoft expecting free computer software, you're buying it because you want to own part of that company, generally either because they're paying good dividends or because you expect the stock to go up and you can sell it higher later. Expecting anything other than these two things just because CF happens to be in a business where giving away free/discounted things is fairly simple is unreasonable and presumptious in the extreme.
*** Edited 5/19/2006 2:35:20 PM UTC by JeffV***

I'm wondering if Jeff will admit that this was his "big news, amusement industry" changing event, or maybe there's more to the picture.

If Jeff wanted to say anything, he would have already said it. I doubt we'll know the "Big News" until it actualy happens.

This isn't completly on topic, but since were talking about park marketing...

I saw some Kennywood billboard advertising in the Cleveland Area yesterday. I don't ever remember seeing them advritise here before.

I completely agree with Jeff on the "Perks" issue. Your a shareholder. Be happy that you have the consistant dividens coming in. If you want coupons, buy a newspaper.

I think it would be a wise idea for Cedar Fair to purchase the Paramount parks. The season passes would not only be more valuable but Cf could really make some money with these parks more so than now actually.

I think it is pretty safe to say that this is the big industry news and it is big news. I love PKI and think it would be a great acquisition for Cedar Fair. I don't know if they need any of the others or are even interested. What would PKI become, just Kings Island again or CFKI? ;)

*** Edited 5/19/2006 3:50:19 PM UTC by cyberdman***

I think it should be a combination of CF's stock ticker and Kings Island -- FUNKI.

Jeff said:

The people complaining at the meeting were idiots and morons. Your $29 unit doesn't entitle you to anything other than the quarterly distribution. How rude.

Here I thought all along that only us "enthusiasses" complained about freebies that we think we are entitled to!

I especially like the guy's comment about being too old for waterslides. I would have told the guy to shut up and sit down. If he doesn't like it sell his units back.

cyberdman said:
I think it is pretty safe to say that this is the big industry news and it is big news. I love PKI and think it would be a great acquisition for Cedar Fair. I don't know if they need any of the others or are even interested. What would PKI become, just Kings Island again or CFKI? ;)

Tom, I think that would depend on whether or not Cedar Fair decided to keep the Paramount license. A big part of PKI are the Paramount themed rides (Italian Job, Tomb Raider, etc). If CF does buy it and chooses to keep the Paramount license, then maybe the park stays PKI-or becomes PKI, A Cedar Fair, L.P. Park *** Edited 5/19/2006 4:15:57 PM UTC by Jeff Young***

JuggaLotus said:
I think it should be a combination of CF's stock ticker and Kings Island -- FUNKI.

Heh, that'd be pretty nifty.

Everyone does need to keep in mind that Kinzel coming out and saying "we're looking" means very, very little, and even if it does go off it's a very long process to complete a buyout/merger of that size. I work for a fairly small local bank, and we're going through a buyout right now. Negotiations for that buyout began in early 2005 and it's just now coming to a shareholder vote at the beginning of next month. A year and a half on a merger of that size, and CF and CBS/Paramount are both very, very much larger and more complex than Northern Savings and Loan.

I'm not saying it won't happen, just trying to keep it realistic. Don't get your hopes up, this is by no means a done deal, and even if it gets to that point (which I hope it does, believe me) it's not going to be an overnight transition.

Jeff Young said:
If CF does buy it and chooses to keep the Paramount license, then maybe the park stays PKI-or becomes PKI, A Cedar Fair, L.P. Park

Right, I guess I did not even consider that. Definately the Paramount licensing would be a big deal and it currently ties into a lot of rides there. Of course we've seen CF re-brand parks in their own image before.