It's easy to pick out Six Flags (NYSE:PKS) president and CEO Mark Shapiro in a crowd. If it's not the confident swagger, it may be that the young, well-dressed chieftain was the only person wearing a suit on a wicked hot Tuesday at Six Flags Great Adventure.
I got to spend some time with Mark earlier this week as we discussed his vision for the chain's future, and the challenging opportunities that lie along the way.
A perfect example is the El Toro roller coaster. The park is banking on the new thrill ride to drive attendance and merchandise sales. I found slick El Toro shirts on display in several shops. They don't seem to be moving, probably because El Toro itself isn't moving either.
It's one of the many reasons why Mark is baffled by the chain's previous executives, who were successfully shooed away by Mark and Dan Snyder back in December. El Toro has been gored early in the season, failing to open by the critical Memorial Day weekend. According to Mark, the delay resulted from placing a new coaster order three months too late. Mark points to Disney (NYSE:DIS), his former employer, which approaches theme-park planning five years in advance. The old regime at Six Flags was simply winging it from season to season.
There's a new sheriff in town
Great Adventure may be celebrating its 45th anniversary, but it's not necessarily a time for reflection. The leadership is new. The in-park navigational signs are new. The commitment to winning back families is new. Come next week, there will even be a new ticker symbol, as Six Flags trashes its PKS Wall Street tag -- a lingering remnant of when Premier Parks gobbled up Six Flags -- in favor of the simpler SIX.
Cleaning up is a key initiative with Mark, in more ways than one. By the end of our time together, he has stopped about a dozen times to pick up stray cigarette butts and fling them into the nearest trashcan. I ask him whether he was always that way, or whether running the company has made him meticulous overnight. He confesses to always being a neatnik, but I see greater significance in his habits. He collects butts. The old regime collected buts.
Illustrating that point perfectly, we get to the Jungleland Express. This miniature train ride was ordered and pieced together more than a year ago, but it never opened, because the former executives never got around to greenlighting a $15,000 safety drawbridge that the city required. It's there now. The ride should be cleared to open in a week or two.
More than just a knee-high knee-jerk reaction
Mark is traveling with his five-year-old son. I ask him if that's the inner Peter Lynch coming out, allowing him to see operations from a knee-high perspective. He has been able to glean plenty by experiencing the parks with his two young children. That's probably the best place to start, since Mark wants to fill up the park with more young families like his own.
To that end, Six Flags has been rolling out character brunches at all of its parks this season. It's been a hit. The company has also been beefing up the streetmosphere with interactive personalities and licensed costumed characters. Give the kids a cherished memory, and the parents will be quick to snap up autograph books, in-park photos, souvenirs, and a reason to return soon.
Having the Looney Tunes characters out in volume grants Six Flags the luxury of also keeping guests a little longer with afternoon character parades. It's still a work in progress. After scouting out the second of three areas in the park geared toward younger patrons, Mark turns to Kelly Laferriere. She followed him over from ESPN to serve as regional vice president of park strategy and management. He comments how one area had six characters strolling around, while the other had just one costumed critter. Distribution is the key.
Ron Sevart, the park's general manager and a Motley Fool Hidden Gems subscriber, describing the untapped potential perfectly when he says that the park has been "sitting hungry on a ham sandwich."
That metaphor applies to Great Adventure as well. That "ham sandwich" is now easier to find -- literally. More than 50 guests were lined up over the holiday weekend as the Carnegie Deli opened up a licensed eatery inside the park.
The possibilities for a turnaround won Mark over to the Six Flags challenge, even as Disney tempted him with promotion opportunities that included heading up ABC or one of its movie studios.
Thank queues and you're welcome
Before Mark took over, management relied on thrill rides and never armed its park managers with the financial backing to operate optimally. The new Six Flags will be a shrewd spender, but it clearly has no problem allocating available funds to areas that will improve the guest experience more than the hardware of new scream machines. I conjure up $10 million and ask Mark how he would allocate it within Great Adventure. He doesn't skip a beat before responding that it would go toward more paint, characters, and kid-friendly attractions that entire families can ride together.
With real money at a premium, I ask Mark for his thoughts on Cedar Fair (NYSE:FUN) acquiring CBS' (NYSE:CBS) Paramount Parks in a $1.24 billion deal. "I never even saw the books," he responds regarding any potential interest that Six Flags may have had in the five-park property.
Right now, Mark's prime objective is to reestablish Six Flags as a quality brand in family entertainment. That commitment that may be tested by sector consolidation, but it must remain intact, because the payout can be substantial.
What's next for Six Flags? Mark clearly doesn't envision it as simply an amusement park company in a few years. He gave up too much at Disney for just that. He points to Disney's ability to sell ranching vacations on its brand name alone, and you can already see a long-term strategy forming in his mind. Family entertainment centers? Resorts? A return to his programming roots with actual content creation? Mark doesn't dismiss any of those notions, and that's pretty much the point. Mindshare can mean a blank canvas when it stands for the right things.
My Foolish notions
Not every decision has been easy. I argued that raising parking prices was a mistake this early in his turnaround strategy -- especially since it was the first impression that guests were getting of the new regime -- and Mark counters that industry rates have been depressed for too long relative to sporting-event parking prices.
At least the new folks at the helm are responsive. They were quick to dismiss a ridiculous "no reentry" policy that was floated in January. Mark went out of his way to meet me and my family on vacation at one of his parks, whereas I have no idea what former CEO Kieran Burke's handshake feels like.
My only real beef was that the company was taking too long to build an on-site resort hotel at Great Adventure; the nearest quality hotels are at least 20 minutes away. Mark explained that Six Flags wasn't ready to make that kind of financial commitment. When I suggested a deal similar to what Paramount Kings Island brokered with Great Wolf Resorts (NASDAQ:WOLF), with the park giving up a long-term lease on undeveloped, adjacent land in return for a minority stake in a Great Wolf hotel with a year-round indoor waterpark, Mark didn't seem to be against listening to what the Great Wolf and Kalahari of the family resort lodging space had to offer. He did have concerns about resistance from Jackson Township, which watches over the park. Call me silly, but I think that the same town that gave clearance for Great Adventure to build the world's tallest and fastest roller coaster -- a sweet ride, by the way -- wouldn't put up much of a fight when the juicy tax revenue of housing overnight guests for extended stays came up.
My meeting with Mark concluded in front of Nitro, one of the park's more popular rides. The Nitro lifthill seemed to take forever, and perhaps that's a fitting end to this story and a fitting beginning to the Six Flags turnaround story. Earlier, Mark had conceded that some parks like Six Flags New England were coming along splendidly, while others like Magic Mountain in California -- where a family emphasis could backfire, given the nature of competing parks -- were going to take some time to make it to the top.
The important thing is that the lifthill keeps ratcheting higher and higher. That's how great rides begin. I should know. I have the on-board ride photo to prove it.
Cedar Fair is an active Income Investor selection. Great Wolf Resorts was once a Motley Fool Rule Breakers recommendation.
Longtime Fool contributor Rick Munarriz is chasing coasters with his family this week. He invests the way he rides, owning a stake in Great Wolf and Disney as well as units in Cedar Fair. He is a member of the thrill-seeking Rule Breakers newsletter team. The Fool has a disclosure policy .
