Snyder leaving Six Flags board
Saturday, May 1, 2010
Washington Redskins owner Daniel M. Snyder is leaving the board of Six Flags and losing his equity investment in the amusement park company, a business he has chaired since winning a proxy fight five years ago.
Snyder's departure from the board, and that of his friend and Redskins partner Dwight C. Schar, appears to bring an end to their involvement in the company, which has been on a wild ride since Snyder took over in 2005.
Snyder's stake in the company when it filed for Chapter 11 bankruptcy protection last June was roughly 5 to 6 percent. The stock had declined precipitously over several years as the company struggled.
Nine people, including Snyder's handpicked Six Flags chief executive, Mark Shapiro, were named directors as part of a bankruptcy reorganization plan submitted by the company's junior bondholders, according to a filing submitted Friday in U.S. bankruptcy court in Delaware.
Under the reorganization plan, Snyder could not be reappointed to the board without the consent of those junior bondholders. A spokesman for Snyder released a statement Friday that said he would not seek reappointment.
"Mr. Snyder and fellow board member Dwight Schar declined the opportunity to remain on the board of directors because of their other business commitments," according to the statement by Snyder spokesman Karl Swanson.
The 49-year-old Six Flags collapsed last June under interest payments on $2.4 billion in debt that Snyder inherited from the amusement park company's previous owners.
Six Flags, which owns about 20 parks throughout North America, sought under Snyder and Shapiro to create a more family-friendly atmosphere by adding rides and attractions.
The company drew 25 million visitors in 2008, and in-park spending per customer has increased, although Six Flags has not turned a profit under Shapiro, largely because of interest payments. The current economic climate, with unemployment above 9 percent, has made it difficult for Six Flags to increase revenue.
Snyder took control of the company after a bitter proxy fight in 2005. He brought in the energetic Shapiro from ESPN to resurrect the struggling business.
Shapiro's strategy was to remake Six Flags into a more wholesome, family-oriented experience, emphasizing safety, cleanliness and customer service while forging partnerships with major sponsors such as Sara Lee and Chase Card Services.
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.
Six Flags slashed admission prices by half at several parks to improve attendance and cut a deal in 2008 with a Dubai developer to build a theme park in the Arab emirate as part of a huge entertainment complex. Despite improvements in operations and attendance, the company could not get out from under its interest expense of $175 million a year, which ate up a big chunk of earnings.
In 2008, it said it would no longer pay a dividend to holders of certain preferred shares for the second consecutive quarter. The company was delisted from the New York Stock Exchange. Other major investors in Six Flags include Bill Gates's Cascade Investment and the hedge fund Renaissance Technologies.