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Six Flags files for bankruptcy – The creepy old guy isn’t dancing too much these days
Despite posting record revenues and 25 million visitors in 2008, amusement park operator Six Flags filed for bankruptcy in a move to wipe them of their $2.4 billion debt. According to the Washington Post, Six Flags, for the most part, did everything right, but was held back by series of unfortunate events over the last few years:
“The company doubled its income from corporate sponsorship and from season ticket sales, and it added themed attractions based on the Looney Tunes characters, the Justice League of America, skateboarding legend Tony Hawk, the Wiggles and Thomas the Tank Engine.
But its summer 2007 attendance was slammed by bad weather in Georgia and Texas, and by an accident on a ride at its park in Kentucky. The same year, it sold seven of its theme parks to a Jacksonville, Fla., company for $312 million in an effort to improve its balance sheet.”
Anyone who has been monitoring this situation will tell you that Six Flags’ bankruptcy has been in the cards for sometime. The current management staff inherited huge debt from Premier Parks when they took over. The main point is that Six Flags’ current management is obviously doing a good job as they doubled their income last year. There is no way to debate those numbers. So, what this Chapter 11 filing is doing, is simply helping those running the parks get a fresh start. Six Flags will now be well positioned for years to come. 2010 might be a bit rough as their income will be largely dependent on the state of the economy. However, should our country’s overall financial standing continue to move in an upward direction, Six Fags will be just fine.
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I love how everyone eats the crap that this company is handing out!
Why did management increase corporate overhead over $45 million their first year if they were trying to make the company better? The only way they reduced that overhead last year was by cutting advertising $33 million.
They took a company that was throwing off EBITDA of 30% before they took over, only to crash it to 20%. The 27% they hit last year is a fabrication because of one time licensing fees. They took somewhere around $240 million off the table that could have been used to pay down debt.
When they took over, the company’s debt was $2.17 billion. They sold parks for $300 million. Where did that money go? Last year, their long term debt was $2.19 billion! If they hadn’t been so greedy, they would have had more cash to pay debt and wouldn’t have had to max out their credit line last year by borrowing $244 million.
Since Snyder and his friends took over, this company has lost 98% of its value. They are incompetent and I hope that the bond holders who aren’t in this little deal take them to task.
the feds will inflate their way out of debt. the rest of us must grin and bear it.
Jpla,
While you make a good case, according to the figures you presented, I can’t seem to find those numbers you listed anywhere. How/where can I find them? I’m not trying to call you out, I would just like to do a little of my own research.