By Alejandro Lazo
Washington Post Staff Writer
Monday, July 2, 2007
Michael Chapman sat sheepishly beside his two daughters at the Six Flags America concert hall in Largo last Thursday. He clapped his hands and bobbed his head and smiled good-naturedly. All around him, a throng of adoring adolescent fans took to their feet, stomping, cheering and dancing as the punk-pop group the Plain White T's burst into its first song of the night.
This was precisely how the Chapmans had planned to end their seven-day road trip from Raleigh to Boston and back -- three rows away from their favorite band.
The Chapmans are the type of customers Six Flags is trying to lure this summer as the company rolls out a family-friendly image, with attractions intended to appeal to toddlers, teens, moms and dads, as much as the chain's traditional thrill-seeking demographic.
This focus on families is perhaps the most visible piece of a turnaround strategy orchestrated by Six Flags chief executive Mark Shapiro, who was installed after Washington Redskins owner Daniel Snyder took control of the troubled theme park company in a 2005 proxy battle. The chain is seeking to refurbish its financial performance and its public reputation, but those efforts have been complicated by the company's heavy debt and sagging stock price.
Six Flags management is targeting families because the company has found that they spend more money, stay longer in the parks and are more likely to make return visits. Several new marketing partnerships, attractions like the Thursday night concert series and an emphasis on cleanliness and efficiency are key to drawing that demographic, company executives said.
"We really are focused on the parks as complete, family destinations," Wendy Goldberg, a Six Flags spokeswoman, said.
This summer is important for the company's efforts. It marks the first full year that new management has had to influence every aspect of the business. And, like other theme park operators, Six Flags draws most of its revenue in the second and third quarters.
In a conference call with analysts last month, Shapiro said there were some early indicators that the strategy was taking hold. Attendance through June 3 was flat compared with the same period last year, but revenue was up 5 percent, he said. The unchanged attendance could be attributed in part to fewer operating days, Shapiro said, as the company closed parks to cut costs on days when attendance had historically been light. Repeat visits increased about 15 percent, and spending per visitor rose about 3 percent, he said.
"Our audience is shifting, more families, less teens, same total audience," Shapiro said. "We're getting more strollers and less tattoos. But just as importantly, we're getting spenders."
But some analysts say the company still has a way to go. "Too many consumers still think of Six Flags as a dirty, abandoned, run-down set of theme parks where troubled teens loiter, smoke cigarettes, and cause trouble," David Miller, an analyst who follows Six Flags for SMH Capital, wrote in a report following Shapiro's conference call. "The good news is, we are still in the early innings of an extra-innings ballgame in the endeavor to turn that image around."Creating a Family-Friendly Face
Although Six Flags is perhaps better known as an adrenaline-junkie's haven, it began as a theme park, Six Flags Over Texas, based on the cultures of the six flags that had historically flown over the state: Spain, France, Mexico, the Republic of Texas, the Confederate States of America and the United States.
The chain grew through acquisitions and construction of new parks, changing hands several times and deemphasizing its original theme. As roller coasters became faster and more popular, the company focused on installing big rides.
Time Warner, which purchased a stake in 1990, partnered with a Boston investment group to buy the company outright in 1993 and added the Looney Tunes and DC Comics characters to the Six Flags fold. Then the chain was sold in 1998 to Premier Parks, a publicly traded theme park company, which renamed itself Six Flags and pushed a rapid expansion strategy that substantially increased its debt load. Six Flags began posting yearly losses, in part because of debt-related costs.
Shareholder dissatisfaction with lackluster results created an opening for Snyder, who took over as chairman in December 2005 after a year-long battle with previous management. Snyder is Six Flags' largest individual shareholder, with 11.7 million shares, or about 12.3 percent, according to a proxy statement filed with the Securities and Exchange Commission in April.
Snyder quickly installed his own board and management team, including Shapiro, a former ESPN programming chief. In the first few months afterward, Six Flags shares climbed as high as $11.80, up from about $4 before the proxy fight.
But an attendance drop at the end of last year's second quarter disappointed investors and sent Six Flags stock down 25 percent in one day. Shares closed Friday at $6.09.
Shapiro said last month that the company's turnaround could take up to four years and that he does not expect Six Flags to turn a profit in 2007. Last year, the company had revenue of $946 million and lost $305.6 million, which includes a $97.6 million loss on the sale of seven parks.
The company still has about $2.1 billion in debt that continues to weigh down results. Last year, Moody's Investors Service downgraded Six Flags' debt rating, a move that increased the company's borrowing costs.
Six Flags has taken steps to ease its debt burden. In January, it sold seven smaller parks to a Jacksonville, Fla., company for $312 million with some of the proceeds slated to pay down debt. In April, it refinanced some of its debt, a move that will cut interest expenses by $8 million to $10 million a year, Six Flags chief financial officer Jeffrey R. Speed told analysts last month.
The company has 21 venues in the United States, Mexico and Canada. Six Flags officials said they plan to focus on major markets -- including Boston, New York and Washington -- with a more affluent customer base, a better target for cross promotions.
"We are viewing our theme parks as an outdoor advertising network," Speed said in an interview last week. "One of the things we are doing is growing a line of revenue through corporate alliances."
Nationally, the push for family dollars is particularly pronounced. Six Flags has installed "Wiggles World" attractions based on the Australian band the Wiggles at its parks in Jackson, N.J.; Springfield, Mass.; and near Chicago. "Thomas Towns," based on the characters in the "Thomas & Friends" cartoon, have opened at the parks in Springfield and in Vallejo, Calif.
In June, Six Flags partnered with Red Zone Capital, a private-equity firm owned by Snyder, to purchase Dick Clark Productions, the television home of the Golden Globe Awards, the Academy of Country Music Awards and "American Bandstand." Six Flags said it hopes to feature some of the production company's offerings in its parks and is considering adding "So You Think You Can Dance" events, award show ticket sweepstakes and other promotions.
"People come to our parks for eight to 10 hours a day, and we want to use the assets of Dick Clark Productions to enhance the entertainment array," Goldberg said.
At Six Flags America in Largo, the company is pushing several lighter attractions designed for families, chief among them the Thursday night concert series. The park is also hosting "Brunch with Bugs," where parents and children can dine with Bugs Bunny. Parades that include DC Comics and Looney Tunes characters tromp through the park daily to the tune of "God Bless America." A free arcade featuring Nintendo's Wii video-game console has been installed. And this Saturday, the park will host a wedding ceremony, "Thrilled Ever After," where couples will declare or renew their vows whiles strapped into roller coasters, just before plunging at speeds of up to 70 mph.
Beyond the theatrics, park managers are promoting cleanliness and customer satisfaction. Menus have expanded. Food lines have been reduced. And pieces of trash are picked up by hand, if need be, by park managers themselves.
"They are definitely making, in their messaging, a concerted appeal to a family audience," said Steve Smith, director of operations for Baker Leisure Group, an Orlando company that does theme park feasibility studies. "They are definitely making their parks more attractive to a family audience."
During a tour of the Largo park last week led by Terry W. Prather, park president, signs of the strategy were evident. Banners everywhere promote the park's Flash Pass, which allows visitors to go to the front of any line for an extra fee. New installations let visitors have their pictures taken with DC Comics characters the Flash, Wonder Woman and Green Lantern. Staff shirts read "Please keep our park clean, because my family comes here too."
Visitors now receive a "code of conduct" card at the gate, with their tickets, warning them that abusive language, rowdy behavior, smoking or wearing swimsuits outside the park's water section can get them thrown out.
"The message is clean, clean, clean," Prather said. "It's the never-ending battle against our previous image."
Some longtime visitors said they noticed a difference.
"It's better, for one thing, without having the smoking everywhere," Valerie Morra, 45, said while cooling herself underneath a mist machine. "The food deals are good with the premium pass."
Sitting on a bench watching her 8-year-old daughter Kaitlyn getting her hair braided with pink and lavender ribbons, Karen Junter, 34, of Kensington, said the trip had been her daughter's idea.
"She did really well in school, and this is what she chose," Junter said.
Not everyone was as pleased. The closing of a water attraction led Diana Nicholson, of Malibu, Calif., to confront Prather, saying she felt "ripped off."
"Are you going to tell me you're sorry?" she asked.
He apologized, explaining that at times rides are closed for maintenance.
She did not relent until he offered her a reimbursement.
Margarita Miranda, 35, of Rockville, began visiting the park last summer with her children -- ages 2 and 5 -- and said she had noticed a wider variety of things to do this year.
"I like it because there is enough for his age, her age and for the older ones," she said. "There is something for everyone."