Month: February 2020

SHORTAKES: A Brief History of Apex Parks (and thoughts on the park closures)

2014: Al Weber, who held CEO positions at Paramount Parks, Six Flags, and Palace Entertainment, starts his own company – Apex Parks. The new chain, financed by two investment firms – Broad Sky Partners and Edgewater Funds – starts off by purchasing fourteen family entertainment centers (FECs) and Big Kahuna’s Water Park in Destin, FL from Palace Entertainment. Joining Weber is an experienced management team migrating from Palace, including Doug Honey as CFO, Gregg Borman as SVP Operations, and Ken Kobane as VP Business Development. Together, the four bring more than 100 years experience in FEC and amusement park operations to Apex. Among the new company’s board members – Tim Fisher, at the time CEO of Village Roadshow Theme Parks, who had established a close professional bond with Weber while at Paramount Parks.

2015: Apex Parks purchases the historic Indiana Beach amusement park, ninety minutes north of Indianapolis. Broad Sky’s founders, including Apex Chairman Tyler Zachem, join investment firm Carlyle Group. Broad Sky’s ownership stake in two companies – Apex Parks Group and pet goods label Mana – transitions to Carlyle.

2016: Apex Parks purchases another historic amusement park – Fantasy Island, near Niagara Falls, NY. Weber has grand plans for updating both Indiana Beach and Fantasy Island while honoring each historic parks’ heritages. In early November, Weber dies. How valuable was Weber to the company? According to his key person life insurance policy (when a company takes out a life insurance policy on an executive and is payed upon death), $10 million. This turned out to be a payout Protective Life Insurance Company refused to honor, based on its allegations that key health information on Weber was not included in the application. After an expensive seven day trial, a jury rules in Apex’s favor. At the end of the year and starting into the next, new management joins the Apex team. Fomer Six Flags Great Adventure park president John Fitzgerald is named the park’s new CEO. Brenda Morris, formerly a Finance SVP with clothing chain Torrid, becomes consulting CFO.

2017: Indiana Beach adds Oktoberfest and Halloween festivals.

2018: Indiana Beach adds “Rockin’ the Beach” summer concert series.

2019: Carlyle Group purchases three of Latin America’s largest (primarily mall-based) FEC chains – Peru’s Coney Island Attractions (86 locations), Columbia’s Happy City (50 locations), and Chile’s YuKids (33 locations). Rather than merge the operations with Apex Parks, the two are maintained separately in the Carlyle Group portfolio.

2020: Indiana Beach, Fantasy Island, and two FECs are permanently closed by Apex Parks. Why? Fitzgerald is an experienced attraction operator and he undoubtedly has an understanding of Weber’s vision, having served as General Manager of Paramount’s Terra Mitica in Spain when Weber was CEO of Paramount Parks. But, as we’ve seen with other theme park operators over the past few years, there’s a hierarchy in decision making. Management reports to the Board of Directors and the Board reports to the shareholders. When individual shareholders control the board, executives may not have a say in decision making. Sometimes this leads to differing approaches on how to solve an issue. If an executive believes that an infusion of cash may be necessary to maintain a property operating in the red, the shareholder/Board may find it easier to shutter the property (before the season starts), dismantle it, and sell it off for a quick infusion of cash. I’ve personally seen this happen with one of my former employers. The question then going forward is – where does that cash go? Does it go to Apex to pay off debt, is it invested in other existing properties and new acquisitions, or does it just go back to the shareholders?

APEX: the top or highest part of something. The visionary’s gone and what’s left of his vision has now been swept into an accountant’s ledger.