SIX FLAGS, IS THE TURNAROUND REALLY TAKING HOLD?  

Many of us have watched amusement and theme park companies experience extraordinary growth, financial difficulties, mergers, acquisitions, management changes, and occasionally complete reinventions. One lesson has remained consistent, that turning around a major theme park organization requires considerably more than reducing expenses, selling properties, or introducing new marketing programs. It requires rebuilding the fundamental economics of the business.

Six Flags Entertainment is now engaged in precisely that process. With the release of its third quarter and nine-month 2026 results today, we have a clearer picture of what the new management team is accomplishing, where it is falling short, and what lies ahead.

I believe the company is moving in a more constructive direction. However, its financial obligations remain substantial, and the operating results suggest that the turnaround is still developing.

The question is whether management is improving the performance of the parks it continues to operate, rather than simply reporting the financial effects of a smaller company.

First, let's compare apples to apples. Earlier this year, Six Flags agreed to sell seven parks to EPR Properties for approximately $331 million. These included Worlds of Fun, Valleyfair, Michigan's Adventure, Six Flags St. Louis, Great Escape, La Ronde, and Schlitterbahn Galveston. Collectively, these parks attracted approximately 4.5 million visitors in 2025, generating roughly $260 million in revenue and $45 million in adjusted EBITDA. Additionally, Six Flags America in Maryland closed following the 2025 season.

Consequently, comparing consolidated 2026 results directly with 2025 without removing these properties, creates a misleading impression. The meaningful measurement is how the remaining parks performed against those same parks during the corresponding period last year.

These numbers provide a more important assessment of management's progress.

Revenue increased modestly despite essentially flat attendance. Guest spending improved, demonstrating some success in generating additional revenue from visitors already entering the parks. However, adjusted EBITDA increased only 1.1%.

The third quarter represents the heart of the operating season for most regional amusement parks. This is when the company should be producing its strongest earnings.

I would characterize these results as encouraging in some respects, but hardly robust. What I see is a stabilization of the existing parks from several years of downturn. This has been no small feat.

As I said, Six Flags is demonstrating signs of stabilization, but the attendance and earnings growth necessary to sustain a meaningful turnaround have not yet materialized.

What do the first nine months tell us? I believe this provides a broader perspective.

(These are reported consolidated indicators, not a complete nine-month same-park reconciliation).

Operating cash flow increased approximately 36.5% over the first nine months of 2025. That is meaningful progress. The company has also reduced capital expenditures and paid down a portion of its debt.

However, the operating trends deserve closer examination. During the first six months, same-park revenue increased 4.3%, while operating costs and expenses declined 3.6%. That demonstrates important expense discipline.

In the second quarter alone, same-park attendance increased 3.5%, revenue increased 2.4%, and adjusted EBITDA increased approximately 6.8%. Compare that with the third quarter, when attendance declined 0.2% and adjusted EBITDA increased only 1.1%. The improvement has clearly moderated.

This begs the question, have the easiest expense reductions already been accomplished, or is management experiencing a temporary slowdown associated with weather, operating calendars, and changing guest behavior?

We cannot answer that conclusively from one quarter. Nevertheless, it demonstrates why expense reductions alone will not produce the turnaround Six Flags needs (the same for United Parks). Eventually, attendance, spending, and earnings must increase together.

Let’s look at season passes. We are seeing more visits, but the question remains whether they are more profitable for Six Flags.

One of management's principal initiatives has been expanding season-pass and membership programs, including broader regional access. At the end of September, active passes and memberships increased 7.1%, reaching approximately 7.1 million. Passholders and members accounted for roughly 61% of third-quarter attendance.

Now, I favor programs that encourage repeat visitation, strengthen customer loyalty, and provide operators with advance revenue. However, management acknowledged during the earnings call that October pass sales slowed and that the active passholder base could be approximately flat entering 2027. I believe the plethora of external issues out there are contributing to this potential impact.

We have seen where a family purchasing a season pass may visit eight times instead of three. Attendance of course increases, but admissions revenue does not increase proportionately.

During the first six months, Six Flags saw same-park admissions spending per guest decline 1.5%, while in-park spending increased 3.0%. This illustrates both the opportunity and the challenge.

Management must continue developing food and beverage programs, merchandise, premium experiences, special events, and other offerings that increase the financial contribution of each visit.

The regional pass program makes commercial sense, but its success must ultimately be measured in profitable customer relationships, not simply the number of passes sold.

A major topic I have been asked numerous times is whether additional parks should be sold. In my opinion, management should remain open to additional dispositions, provided the financial benefits justify the loss of future earnings.

CEO John Reilly has acknowledged opportunities for further portfolio optimization and indicated that earlier park sales did relatively little to improve the company's debt-to-EBITDA ratio. That is understandable. When a park is sold, the company receives proceeds that can reduce debt, but it also loses the EBITDA that property generates. The seven parks sold to EPR produced approximately $45 million in annual adjusted EBITDA. That earning power is no longer available to Six Flags.

Selling additional parks could make sense, particularly properties requiring substantial capital expenditures with limited prospects for attendance growth, or highly competitive parks just playing pickleball with back-and-forth attendance, based on who puts in the big new attraction in a competing market.

But above all, management must avoid sacrificing strong cash-generating properties simply to achieve temporary financial relief.

There is another opportunity that I find particularly interesting discussed in their earnings call. That is, Kings Dominion, which has an important distinction. Management previously indicated that it was evaluating bids involving excess land at Kings Dominion near Richmond, Virginia. This should not be confused with a confirmed sale of the operating theme park.

According to the company's annual report, Kings Dominion encompasses approximately 730 acres, including roughly 450 acres classified as undeveloped. Not all undeveloped land is necessarily available or appropriate for disposition. However, selling genuinely surplus property could generate meaningful cash without sacrificing the park's existing attendance, revenue, or EBITDA.

Knowing that property quite well, I believe this is a more attractive approach than disposing of a productive operating asset, unless a serious multiple of EBITDA is put on the table.

The company must thoroughly evaluate surplus real estate throughout its portfolio.

The company’s albatross is debt, and it remains the company's continuing largest challenge. Six Flags continues to carry approximately $4.91 billion in total debt, with net debt around $4.66 billion. That is an enormous financial burden for a predominantly seasonal business.

At the end of September, the company reported approximately $268 million in cash and total liquidity of roughly $1.06 billion. The improvement in operating cash flow is encouraging, but substantial interest expense continues to limit financial flexibility.

As an example, one financing arrangement alone, the $1 billion senior notes issued at an 8.625% coupon, represents approximately $86 million in annual interest.

Management believes it has sufficient liquidity to meet near-term obligations without additional park sales. That is reassuring, but a major contractual payment is approaching.

One transaction to remember is that the $367 million Georgia park obligation comes due in January 2027. Six Flags is scheduled to acquire the remaining partnership interests associated with Six Flags Over Georgia and White Water Atlanta. According to its SEC filing, the estimated payment was $367.2 million as of June 2026, subject to additional inflation adjustments. This is not a speculative obligation. It is the result of a contractual option previously exercised by the company.

Looking at this situation, the estimated payment exceeds Six Flags' September cash balance and represents approximately 48% of the $758 million annual adjusted EBITDA figure discussed in management's outlook. While that comparison illustrates the obligation's magnitude, EBITDA should not be confused with available cash. Management maintains that sufficient liquidity exists to satisfy the payment.

However, as I review this, using cash or existing borrowing capacity will reduce financial flexibility entering the 2027 operating season.

The Georgia park acquisition also has a positive aspect though. Flags will acquire the remaining ownership interests in the Georgia properties, potentially improving its future access to their cash flows.

The important question is not simply whether Six Flags can make the payment. It is how much financial flexibility will remain afterward to meet interest obligations, maintain its parks, fund new attractions, and reduce debt. Is the growth there?

Let’s look at Cap-Ex, where a more balanced approach may very well be necessary. This is one area where I am particularly encouraged because of management's evolving capital investment philosophy.

For years, regional park operators have frequently relied on increasingly expensive roller coasters to stimulate attendance. Major thrill attractions certainly have their place. But a successful regional park must appeal to families, children, teenagers, and adults, while providing a comfortable and attractive environment.

Reilly is now finally emphasizing park refurbishments, entertainment, family experiences, landscaping, guest amenities, and improvements to the overall guest experience. Magic Mountain, Great Adventure, and Great America were specifically mentioned as properties receiving attention.

I believe this is an absolutely sensible direction for Flags to take. A clean, attractive, well-maintained park with dependable ride operations, appealing entertainment, quality food, and comfortable surroundings can be as important to repeat visitation as the newest roller coaster.

In my opinion, the announced 2027 attraction and improvement program has the potential to be one of the company's most strategically balanced offerings in approximately five years. This is due to new management’s “Back to Basics” understanding of the business.

However, there is an important qualification that has to be addressed. Six Flags reduced its 2026 capital expenditure forecast from $400–425 million to $350–375 million, reflecting approximately $50 million in deferred spending associated with major ride projects. Management has not clearly identified which attractions/ demographics are affected.

We therefore cannot determine whether previously announced 2027 projects could be delayed or whether the deferred expenditures relate to other developments.

There is a substantial difference between improving capital efficiency and simply postponing investment. The ultimate measurement should be return on invested capital, not the number or size of attractions announced.

The tragic October fatality at Six Flags Over Georgia must be addressed with the utmost seriousness. The loss of life is first and foremost a tragedy for the individual and family involved. Safety remains the hallmark of our industry, and protecting guests must always take precedence over financial considerations.

Management indicated that incidents and associated ride closures contributed materially to weaker October attendance, alongside unfavorable weather. The company has undertaken additional safety reviews, including independent specialist involvement.

Management believes the financial impact of major ride incidents is generally measured in months rather than years, although the actual recovery period remains uncertain. I concur.

Meanwhile, fourth quarter same-park adjusted EBITDA is expected to be approximately $140 million to $150 million, compared with $167 million in 2025. That represents a projected decline of approximately 10% to 16%.

Halloween and Christmas events have become increasingly important to regional parks, but they also carry substantial staffing, entertainment, utility, and security costs.

The holiday season will provide another measure of management's ability to generate profitable attendance while maintaining the guest experience. Good weather could move people to the parks, assuming external factions do not get worse. People need a good holiday message, and the parks deliver on this.

What Should We Expect in 2027?

As we have seen, the mature North American regional amusement park industry has historically experienced relatively modest underlying growth. My working long-term expectation is approximately 1.5% to 2.0% annually, recognizing that individual parks and seasons can vary substantially.

That should be treated as an analytical benchmark rather than a verified 2026 industrywide growth figure.

Against that benchmark, Six Flags' third-quarter attendance decline of 0.2% is disappointing.

The company should aspire to outperform the underlying market, particularly after investing in expanded season passes, improved operations, new attractions, and marketing.

For 2027, I see opportunities and risks.

• The more focused portfolio should allow management to concentrate resources on stronger properties. The evolving capital program could broaden family appeal and encourage repeat visitation.

• Park refurbishments and improved guest amenities may generate meaningful benefits without requiring record-breaking attraction expenditures. But the financial constraints remain formidable.

• The Georgia partnership obligation, substantial interest expense, possible capital spending deferrals, and slower season-pass momentum all present challenges.

• The company must also demonstrate that expense reductions are sustainable without compromising staffing, maintenance, safety, or guest satisfaction.

In my opinion, a meaningful turnaround will require sustained attendance growth, improved guest spending, stronger EBITDA margins, and recurring free cash flow sufficient to reduce debt.

Is the Six Flags turnaround taking hold? I believe the answer is yes, but only in its initial stages.

The new management team deserves credit for confronting structural problems that could no longer be ignored. The company has simplified its portfolio, improved cash generation, strengthened expense discipline, and begun adopting a more balanced approach to capital investment.

I see these as meaningful accomplishments. But I am not prepared to declare the turnaround successful.

Attendance growth remains inconsistent. EBITDA improvement has moderated. Season-pass momentum has slowed, and debt continues to limit the company's financial flexibility.

The January Georgia obligation will place additional demands on liquidity, while the 2027 capital program must demonstrate that new investments can generate acceptable financial returns.

After many decades in this industry, I have learned that successful turnarounds are rarely accomplished in a single season. They require discipline, patience, appropriate investment, and experienced management willing to make difficult decisions.

Six Flags, under Reilly, has begun making those long overdue decisions.

As I review it, the company is moving in a more constructive direction, but the financial burden remains formidable. The turnaround is underway; its ultimate success remains unproven.

The opportunity is there. The challenge is execution. Reilly understands what is necessary. The question is whether he will have the time to execute the 'Back to Basics' approach he is reimplementing, which is so long overdue.

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