Mark Shapiro sees seriousness of problems at 30 theme parks

Six Flags CEO candid, ready for a challenge

July 08, 2006|By KIMI YOSHINO | KIMI YOSHINO,LOS ANGELES TIMES

Only weeks into peak season, new Six Flags Chief Executive Officer Mark Shapiro has revealed just how much fun he's not having this summer at the company's 30 theme parks.

"This product isn't close to where we want to be," Shapiro said during an unusually candid assessment of Six Flags Inc., which may sell six parks. The company owns Six Flags America in Largo.

The company is $2.1 billion in debt. Its stock price plummeted 25 percent immediately after Shapiro's harsh review late last month during a call with investors. Wall Street debt raters Standard & Poor's and Moody's Investors Service lowered their outlooks and downgraded the credit ratings on Six Flags.

"I'm not going to get on a call and lie to people or mislead people," Shapiro said in an interview. "I think it's important that people know what we've inherited. This is a long-term investment. This stock isn't for short-timers."

Since taking over as CEO in December - after Washington Redskins owner Dan Snyder overthrew the New York company's previous management during a nasty proxy battle - the 36-year- old former ESPN executive has launched a huge makeover to transform Six Flags from thrill parks overrun by teenagers to family-friendly destinations.

There's a hitch: It may not be as easy as Shapiro thought.

Shapiro - in the middle of a second tour of company parks, this time during the busy season - said he had witnessed unfriendly, slow-moving seasonal employees, poor maintenance and popular rides with a single train running at a time.

One parent wrote him a letter detailing a visit marked by long lines, closed rides, rude employees, rowdy teens yelling racial slurs and a couple having sex on the Ferris wheel. Shapiro declined to identify the park.

"This is the best example I have of what we're up against," Shapiro said. "We're going to win this guy back." In the process, he's winning fans. Shapiro's tough assessment of his company and willingness to unload troublesome properties brought cheers from industry watchers.

Bear Stearns analyst Glen Reid wrote to shareholders: "It's difficult to see much more room to disappoint. .... This remains a long-term turnaround, and we continue to be optimistic."

Dennis Speigel, president of consultant International Theme Park Services Inc., said industry executives - even at Six Flags' competitors - were happy with the recommitment to the parks.

"Shapiro took a body that was on the table that didn't have a heartbeat after the other management team left, and he's got the heart beating again." he said. "Morale has never been higher."

But Shapiro said the brand's reputation had been "squandered away" and families were not returning at the pace he hoped. Attendance is down 12 percent.

To speed progress, he has instituted major changes; a no-smoking policy at the parks and new characters, parades and entertainment.

To strenghten finances, the company has sold Texas land where Astroworld was located for $77 million and is terminating leases and selling assets of water parks in Ohio and Sacramento Calif.

Six Flags is reviewing bids for two Oklahoma City parks and is marketing excess land outside parks in Illinois and Missouri. Shapiro also brought in a new management team, replacing six park general managers.

"We have a lot of work to do here, and we're going to do it." Shapiro said. "I'm confident that the audience and the guest is going to be very pleased with the product once we're done."

Kimi Yoshino writes for the Los Angeles Times.

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