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Arthur Levine

Despite Bankruptcy, Six Flags CEO not Coasting

By June 16, 2009

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With his characteristic enthusiasm, unbridled energy, and upbeat attitude intact, you'd never guess that Mark Shapiro, CEO of Six Flags, just took his debt-laden company into bankruptcy. During a freewheeling and surprisingly candid 50-minute conference call with journalists, the park chain honcho made the case that the "pre-negotiated plan of reorganization," as the company is describing its bankruptcy, is a behind-the-scenes financial restructuring that will be all but invisible to its customers. "Plain and simple, we're over-leveraged," said Shapiro, referring to the chain's $2.4 billion debt. " 'Debt' is associated with the Six Flags name. We want to disconnect that." The company plans to de-leverage $1.8 billion of debt by converting it into equity shares of the company.

Shapiro emphasized that the parks are in great shape, the company is continuing to invest in new rides and attractions, and that attendance, revenue, and profits are all on the increase. He also confirmed that he is not planning on laying off any staff or closing any parks. Shapiro did acknowledge that the bankruptcy court could challenge the company's plans, and that it would look closely at the park chain's performance this season to gauge the Chapter 11 process.

The Six Flags leader then used the forum to share his thoughts about the company and his plans for the future. Among the highlights of Shapiro's revelations:

  • The restructuring will not hamper the company's plans to invest about $100 million annually in the parks. Shapiro said that Six Flags America will be getting a new Thomas the Tank Engine land with ten new rides in 2010. And, he said, the chain is gearing up for a big 50th anniversary celebration in 2011.

  • The CEO thinks that a $100-million annual capital investment is all the company can afford, and that he wants to add something new to every park each year. That's why, Shapiro says, the days of Six Flags mega-coasters may be over. "If I put in a $25-million coaster at one park, that leaves me with only $75 million for the rest." He pegged the new Terminator Salvation coaster at Six Flags Magic Mountain at $10 million and said that the Bizarro coaster makeover at Six Flags New England cost $7 million. Shapiro pointed to the previous management's investment of $50 million in Kingda Ka at Six Flags Great Adventure as a prime example of how it racked up insurmountable debt. He also said that while Kings Island's Diamondback and Cedar Point's Maverick are great coasters (I'll second that!), he doubts whether the parks will be able to realize a reasonable return on their investments.

  • Shapiro admitted that, while the parks have improved under his watch, "We're not where we need to be." He said that the previous management deferred much-needed maintenance and infrastructure improvements in favor of flashy coasters. Shapiro wishes he could commit $200 million to capital improvements, but that given his budget constraints, bringing the parks up to snuff will take time.

  • Expect to see more themed, immersive rides, like Bizarro and Terminator Salvation, says Shapiro. He conceded that the Batman-themed The Dark Knight rides may not have been critical favorites, but he added that Six Flags Great Adventure and Six Flags Great America saw attendance increases of 200,000 and 100,000, respectively, when the indoor coasters debuted at the parks last year.
Comments
June 16, 2009 at 9:58 pm
(1) Yves Leduc says:

More lies by this master of deceit. Mark Shapiro and pals drove this company into bankruptcy! An attempted theft of assets by Mark Shapiro and his co-conspirators! May they be convicted of fraud and rot in jail!

June 17, 2009 at 11:14 am
(2) Joe Flag says:

If you were getting a 3 million dollar bonus for filing bankruptcy and planning on staying at the helm afterwards, you’d be upbeat too.

Wonder what the excuse will be next time?

I’d like to see the Judge in charge of the bankruptcy proceeding throw Mr. Shapiro’s plan back in his face.

June 19, 2009 at 3:57 am
(3) coastercub says:

I highly doubt either posters here have any knowledge of SF, its history, or the debt that the current management did walk into. Have they removed rides? Yes… but mostly those that never operated anyway. In return they have greatly improved the guest experience, cleaned parks up, and made the company profitable for the frist time in its history. If you are going to smear Mr Shapiro or SF make sure you have facts to back your claims, or at least have had visited a SF park!

June 19, 2009 at 12:09 pm
(4) Robert says:

Six flags sucks and they wont ever have to worry about getting my money again especially if they don’t plan on adding anymore Kingda Ka’s or El toro’s, or Intamin Hyper/Giga coassters to their parks. Thomas towns, Dark knights and terminators are all mediocre CRAP and I have an an 8, 10, 13, 16 year old children and they would back me up on this.

June 19, 2009 at 10:10 pm
(5) Sam says:

Six Flags has greatly improved its park through out the chain, and it is understandable that it does not want to add major coaster so it can focus on all park, rather than depend on one that would only turn in an amount of profit for the company. Comments like the one Robert made, just shows how the previous management was running the park, only focusing on teens. What SF has been able to do is lure in the family. Oh and rides like Terminator are not crap. I have you know GCI (the ppl tha build terminator) Have an awesome record for building world class coaster that have been highly rated among families and coaster enthusiasts!

August 4, 2009 at 6:13 pm
(6) Dragar says:

I used to love Six Flags, but your recent campaign ads have totally alienated me. First you started with the oriental dude yelling at me that SIX FLAGS MORE FUN. Now you have the bald dude back (who I liked when he seemed to be inviting me) doing the same thing. Don’t expect me to visit any of your parks.

April 13, 2010 at 9:57 pm
(7) pip says:

dont go to six flags they will banned you or kick you out cant everr go back even if you do you will go to jail even if you wear a paople costume no mask they will bitch about it and they might kick you out even if you are wearing white making wearing black they might say take it off

June 29, 2013 at 3:23 am
(8) Anna says:

I love the new.. very clever marketing strategies they used this year (2013) to reinvent themselves and attract 21+ crowds like myself. I hope Six Flags don’t go out of business! With our economy.. I love how everything is broken down into payment plans that makes it more affordable for us to get the full experience of the whole park. Thank you!!! Ignore the nay Sayers. :)

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