Elitch's may be put up for sale

Six Flags weighs options for 6 parks

Janet Forgrieve, Rocky Mountain News

Friday, June 23, 2006

The owner of Denver's 116- year-old Elitch Gardens may sell it, either as an operating amusement park or a parcel of land for development.

Six Flags Inc. said Thursday it's considering all options for Elitch Gardens and five other U.S. amusement parks, including a sale of all six to one buyer or separate sales that could involve dismantling some or all of the parks.

"We haven't made a decision when or if any of those will be sold," spokeswoman Wendy Goldberg said. "We're just striving to be as transparent as possible with shareholders, visitors and employees."

In a conference call, Six Flags CEO Mark Shapiro said the company has held talks with potential buyers, but he declined to name them.

In February, Shapiro hit town to deliver a pep talk to Elitch workers. But pep wasn't enough to perk up park sales, he said Thursday.

"This brand is much more damaged than we previously thought," he said in a conference call with analysts.

Six Flags started the 2006 season with about $2.1 billion in debt, which led Shapiro to characterize this as a "rebuilding year." Instead of launching splashy marketing campaigns, the company hoped to shore up revenue by offering visitors more to buy, especially in the area of food and drink.

But attendance for Six Flags parks was down 13 percent through June 18, primarily because of fewer visits by season pass holders. Season pass sales are down by 550,000 this year. Ticket sales also suffered as Six Flags tried to keep rowdy teenagers out of its parks.

Total sales were down 1 percent for the same period, although revenue per customer rose an average of $4.12 on higher ticket prices and increased spending on food.

Shapiro said the company probably won't meet its forecast of $340 million in earnings before interest, taxes, depreciation and amortization this year.

"It's going to be exceedingly difficult to hit that guidance number given the teenage drop-off we've had," Shapiro said. "We are driving out a certain segment of the teen population. Those that loiter, those that smoke, those that don't spend money, those that drive up our security problems."

Six Flags will boost spending by $15 million this year to hire staff and lure back customers, Shapiro said. The company had previously forecast $45 million in cash operating expenses for the year.

The company hopes to pare debt to about $1.6 billion by selling off excess land, Shapiro said.

The company doesn't break out sales or attendance records for specific parks, Goldberg said.

Six Flags acquired Elitch Gardens in 1998, three years after a $95 million relocation put the park on its current 70-acre site just off Interstate 25 northwest of the Pepsi Center.

Shapiro, a former ESPN executive, stopped at Denver's park on Feb. 8, halfway through a 30-day tour of the company's 30 parks. The 35-year-old was named chief executive in December, when a group led by Washington Redskins owner Daniel Snyder took control of the company in a hostile takeover. Since then, the amusement park company has sold or announced plans to sell or close other properties.

It sold the land under Six Flags Astroworld in Houston for $77 million. That park did not open this season. It has deals to sell the assets of its Columbus, Ohio, water park for $2 million and to terminate leases there and at a Sacramento, Calif., water park at the end of this season.

Six Flags also has said it will sell two parks in Oklahoma City.

forgrievej@RockyMountainNews.com or 303-892-5191