Six Flags May Sell

Six Flags Inc. said it is considering selling six amusement parks including Valencia, Calif.’s Magic Mountain and Hurricane Harbor, which could be turned into real estate developments.

Mark Shapiro, a former ESPN executive who is now Six Flags’ chief exec, said in a conference call with investors June 22nd that Magic Mountain is a sale candidate partly because of its rowdy teenage atmosphere, which sometimes drives families away.

Shapiro also told analysts and investors that revenue was down about 1 percent through June 18th, attendance fell by 13 percent, and the company might fail to comply with certain bank credit covenants.

The New York-based company, which owns 30 amusement parks, wants to reduce its reliance nationwide on teenage customers who cause security problems and don’t spend much money, Shapiro said. The company, in evaluating which parks could be sold, also examined which ones sit on valuable real estate, he said.

Along with increasing losses, Six Flags faces declining attendance and is saddled with $2.1 billion in debt.

The company may sell Elitch Gardens in Denver as well as parks in Seattle, Houston, Buffalo and Concord, Calif.

Shapiro added that Six Flags could invest in Magic Mountain to turn it into a family-style park, but noted that Southern California is packed with family-themed attractions including the two Walt Disney parks in Anaheim, Knott’s Berry Farm in Buena Park and Universal Studios Hollywood.

At the same time, the 250-acre park could bring in millions of dollars if sold. Shapiro told the Los Angeles Times that sales would have to garner more than $500 million to be worthwhile.

Meanwhile, shares of Six Flags Inc. dropped sharply on June 23rd when debt rating agencies lowered their outlooks on the amusement park operator after it said attendance and revenues have fallen.

Six Flags shares shed 22.5 percent in afternoon trading to $5.77. The company’s shares haven’t had such a large single-day drop since July 2004, when the price fell by 25 percent.