Complaints have fallen amid a big makeover, but Mark Shapiro sees much more work ahead.
New Six Flags Chief Executive Mark Shapiro isn't having much fun 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, including Magic Mountain and Hurricane Harbor in Valencia.
The company is $2.1 billion in debt. Its stock price plummeted 25% immediately after Shapiro's harsh review late last month during a call with investors. Standard & Poor's and Moody's Investors Service lowered their outlooks and credit ratings on Six Flags.
I'm not going to get on a call and lie to people or mislead people," Shapiro said in a subsequent 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."
Six Flags' shares fell 12 cents to $5.46 on Thursday.
Since taking over as CEO in December — after shareholders overthrew the New York company's previous management during a nasty proxy battle — the 36-year-old former ESPN executive has launched a massive makeover to transform Six Flags from thrill parks overrun by teens into family-friendly destinations.
It may not be as easy as Shapiro thought.
In the middle of a second tour of company parks, this time during the busy season, Shapiro 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. CLARIFICATION: Six Flags:
This article described a letter received by Six Flags Chief Executive Mark Shapiro in which a parent wrote about a visit to an unindentified park marked by long lines, closed rides, rude employees, rowdy teens yelling racial slurs and a couple having sex on the Ferris wheel. The visit occurred in October 2004
, before Shapiro and his management team arrived at the company.
"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 experts even as some fretted about the potential loss of Magic Mountain's unmatched collection of thrill rides if real estate developers were to end up with the land.
"It's difficult to see much more room to disappoint," Bear, Stearns & Co. analyst Glen Reid wrote in a note to shareholders. "This remains a long-term turnaround and we continue to be optimistic."
Even Six Flags' competitors are happy with the recommitment to the parks, said Dennis Speigel, president of consulting firm International Theme Park Services Inc.
"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 that Six Flags' reputation had been "squandered away" and families were not returning at the pace he had hoped. Attendance is down 12.5%.
To speed progress, he has instituted major changes: a no-smoking policy at the parks and new characters, parades and entertainment. To strengthen finances, the company has sold assets and 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.