Longtime theme park fans shaking at the notion of a Cedar Fair-Six Flags merger can take some solace that Cedar Fair will be handling operations even if the Six Flags name is about to be slapped on every park in the expanded theme park chain.
Knott’s Berry Farm owner Cedar Fair and Magic Mountain owner Six Flags agreed on Thursday, Nov. 2 to an $8 billion merger of equals that will combine the two companies into a North American amusement park juggernaut.
The combined company will be known as Six Flags once the deal is done.
That’s right. You’re going to have to get used to saying Six Flags Knott’s Berry Farm. Or Six Flags Berry Farm. Or Knott’s Berry Farm presented by Six Flags. Or some other mouthful of a name involving Six Flags branding. The Six Flags national name recognition is one of the key things Cedar Fair gets out of the deal.
Together, Cedar Fair and Six Flags will have a portfolio of 27 amusement parks and 15 water parks in the United States, Canada and Mexico that attracted 48 million visitors in the past year.
The expanded footprint of the Cedar Fair-Six Flags union will only have overlapping parks in two key markets: Southern California and the San Francisco Bay Area.
The good news for Knott’s and Magic Mountain? The year-round parks in Buena Park and Valencia are expected to reduce the seasonal impact that contributes to earnings volatility, according to the Cedar Fair-Six Flags announcement.
The overlap in Northern California will be relatively short lived. Cedar Fair has sold California’s Great America and the park will cease operating within a decade or less — which would eventually leave only Six Flags Discovery Kingdom in the Bay Area market.
Cedar Fair CEO Richard Zimmerman said on a call with investors that there are no plans to close any of the parks following the merger.
“These are irreplaceable assets,” Zimmerman said on the call. “How do you grow if you shrink your portfolio?”
The Southern California market presents the biggest challenge for the new company, according to Theme Park Insider.
“In the L.A. market, ‘Six Flags’ means Magic Mountain,” according to Theme Park Insider. “Slapping the Six Flags brand on Knott’s Berry Farm only would cause confusion.”
It would make no sense to close either Knott’s or Magic Mountain — and a lot of sense to capitalize on their potential synergies.
Knott’s Berry Farm (3.9 million) and Six Flags Magic Mountain (3 million) both rank among the Top 20 North American amusement parks in annual visitors, according to the TEA/AECOM annual report.
Knott’s and Magic Mountain share some fans, but are on opposite sides of the Los Angeles metropolis. Southern California is home to seven theme parks and the local Cedar Fair and Six Flags locations have coexisted and competed in the region for decades.
There are plenty of differences between the two parks. Knott’s has long positioned itself as one of America’s oldest theme parks with themed lands akin to Disneyland. Magic Mountain is a “steel park” that brags about having more roller coasters than any other amusement park in the world.
Theme Park Insider argues that the shared Southern California market provides an opportunity for the new company to leave Knott’s Berry Farm without the Six Flags branding — extending to the well-established Knott’s Scary Farm and Knott’s Merry Farm events.
The combined companies plan to invest in new rides and expand access to season passholders.
A Knott’s-Magic Mountain season pass combo could drive sales and help introduce the twin audiences to each other.
A deluxe pass good for the entire 27-park chain could provide access to Cedar Fair’s crown jewels in Southern California (Knott’s) and Ohio (Cedar Point and Kings Island) as well as Six Flags’ biggest parks in the Los Angeles (Magic Mountain), Chicago (Great America) and New York/New Jersey (Great Adventure) metropolitan areas.
The combined company will have a trio of intellectual property brands — DC Comics, Looney Tunes and Peanuts — that can be used to theme rides and attractions.
The DC Comics line-up of superheroes could allow Knott’s and Cedar Fair to step up and compete on a themed attraction level with the Marvel superhero rides at Disneyland and Universal Studios Orlando.
Dennis Speigel, an industry expert with International Theme Park Services, called the deal a “win-win” for both chains and said the merger would result in the world’s largest regional theme park company.
“It would give them complete dominance in the regional theme park market in the United States,” Speigel told Cleveland.com. “This merger makes Six Flags a better company. And I don’t think it takes away from Cedar Fair at all.”
The merger of equals appears to tilt in favor of Cedar Fair.
Cedar Fair will oversee the day-to-day park operations of the merged company.
The combined company will be based at Cedar Fair’s headquarters in Charlotte, North Carolina, with finance and administrative operations housed at the company’s flagship Cedar Point theme park in Sandusky, Ohio.
Zimmerman and CFO Brian Witherow will serve in the same roles in the combined company.
“I have great respect for the Six Flags team and look forward to joining forces as we embark on this next chapter together,” Zimmerman said in a Cedar Fair release.
Six Flags CEO Selim Bassoul becomes the new chairman of the board while Six Flags CFO Gary Mick serves as Chief Integration Officer.
The merger has already been unanimously approved by the boards of both companies. Each company gets six seats on the new board of directors.
Cedar Fair shareholders will own 51.2% of the merged company.
The merger is expected to close in early 2024 after Six Flags shareholders approve the deal. Cedar Fair unitholders don’t need to approve the deal.
As with any merger, cuts are expected wherever there is a duplication of roles.
Administrative and operational synergies will result in $120 million in cost savings within the first two years of the merger, according to the Cedar Fair-Six Flags announcement.