Redskins owner Daniel Snyder yesterday launched a bid to take control of struggling theme park company Six Flags Inc. and wants himself, local home builder Dwight C. Schar and outgoing ESPN executive Mark Shapiro installed in top positions, according to documents filed with the Securities and Exchange Commission.
Snyder, who has complained about the management of Six Flags since he began investing in the company last year, said he would offer $6.50 a share of Six Flags stock -- more than yesterday's closing price of $5.49 -- if shareholders consented via proxy to his proposal to oust the current management and install his own team.
Six Flags, which owns 30 amusement parks in North America, posted a $177.3 million loss from continuing operations in 2004, and its stock price declined from more than $23 in May 2001 to a low of $3.49 last August -- when Snyder started investing.
Saying his management could revive the company, Snyder said in yesterday's SEC filing that he wants to be made chairman and that he wants Shapiro appointed as chief executive and Schar appointed to the board.
"The current Board and management have not only ignored what we believe are constructive suggestions, but have also failed, in our view, to implement any alternative strategy," Snyder said in SEC documents submitted under the name of Red Zone LLC, the company through which he holds almost 11 million shares of Six Flags stock.
Shapiro, a well-regarded executive at ESPN, announced yesterday that he is leaving the network Oct. 1 to become chief executive of Red Zone, ESPN said.
Schar is a part owner of the Redskins and chairman of McLean-based NVR Inc., the home builder whose high-flying stock has made him one of the region's wealthiest people.
Snyder and Shapiro did not return several phone calls yesterday. Schar referred calls to Snyder.
In asking Six Flags shareholders to sell to him and to pressure the board to follow his plan, Snyder acknowledged the potential pitfalls of a battle by proxy. The company, for example, has a "poison pill" provision in place to prevent a takeover, and Snyder consequently said that for now he would buy stock equivalent to only 34.9 percent of the company's shares to avoid triggering it. He owns about 11.7 percent of the shares.
He also must get at least 50 percent of the company's shareholders to sign off on the proposal to elect him, Shapiro and Schar to the board -- a step that would allow them to lift the poison pill rules and gain control of the company.
Six Flags, in a written statement, reminded stockholders that they "need take no action" in response to Snyder's proposal.
"The board of directors of Six Flags will carefully consider and evaluate Red Zone's filings and will communicate with Six Flags' stockholders in due course," the company said.
Snyder's attempt to take over Six Flags is the latest chapter in his on-again, off-again relationship with the theme park company, which has played out in a series of angry letters, meetings and more angry letters.
Last August, after building up an 8.8 percent stake, Snyder wrote to Six Flags management, pointedly conveying his opinion that the company was poorly run. He was joined by fellow shareholder Microsoft Chairman Bill Gates, who owns an 11.5 percent stake.
Snyder followed up with a meeting on Sept. 28, 2004, in which he offered detailed suggestions of how Six Flags managers could turn the company around, the SEC filing said.
But management turned a deaf ear to Snyder. "None of your suggestions . . . were such as to justify . . . placing you in the controlling positions you seek," wrote Michael E. Gellert, a Six Flags director, in a Sept. 30, 2004, letter to Snyder.
Snyder shot back a week later, saying he intended to protect his investment "through all available means."
Then suddenly, Snyder seemed to be about to give up and sell his shares. In a January letter to Gellert filed with the SEC, he wrote that investing in Six Flags was not a good idea "in light of what we believe will be a disappointing future."
Snyder, however, did not sell and instead, over the past month, bought about 2 million more Six Flags shares, at an average price of around $5.20.
Snyder, who made his fortune coming up with creative ways to sell advertising, is determined to bring the lucrative marketing and sponsorship initiatives he has created for the Redskins and FedEx Field to Six Flags, yesterday's filing indicates.
Snyder bought the Redskins, stadium and Redskins Park training facility from the estate of Jack Kent Cooke for $800 million in 1999; the team's value has been estimated at more than $1 billion, making the Redskins one of the most valuable franchises in sports.
Snyder has built the club's value by inventing new ways to make money. He added thousands of seats, vastly increased the number of sponsorships, introduced "tailgate clubs," and added luxury boxes and on-field seating, all of which have increased the team's cash flow to among the highest in sports. The stadium seats 91,665, the most in the National Football League.
Snyder wants to apply a similar game plan to Six Flags, creating partnerships with pizza, ice cream, cell phone and other brands that will increase amusement park revenue, according to the SEC filings.