Tuesday, September 29, 2009

Six Flags Over Nigeria?

Somehow I think this is going to end badly:

Six Flags Inc., one of the world's largest theme park operators with 21 properties in North America, is planning to open a theme park in a place where no theme park has gone before: Nigeria.

. . . .

However, Mr. Speigel [president of International Theme Park Services, a consulting firm in Cincinnati] has some doubts about the company's Nigerian venture. "I'm not sure if this announcement brings credibility to Six Flags' table," he said.

"It's a worthy cause for Six Flags to spread this type of entertainment, but [Nigeria] is a tough place to do business given the role corruption and government interference play there," he said. "Some parts of the country are having trouble clothing its people. I have to question whether Nigeria is ready for an attraction of this nature."

Nigeria derives about 95 percent of its foreign exchange earnings and 80 percent of its budget revenues from oil production, according to data collected by the CIA. That crucial revenue stream has been threatened by a spate of kidnappings of foreign oil workers by militant groups.

More than 500 people have been kidnapped in Nigeria so far this year, up nearly 70 percent from 2008. Several foreign companies, including Willbros Group Inc., a U.S. oil services contractor, have withdrawn from Nigeria.

Let me be more specific: Nigeria doesn't have a sufficient population of customers able to pay the kind of gate receipts that will allow the park to operate at North American standards. But if the park operates below North American standards . . . well, the best-case scenario is that western journalists visit the park and write articles about how the Nigerian effort is shabby, unsafe, and underpays its workers, tarnishing the Six Flags brand. Worst case is that one of these underpaid Nigerian staffers working the rollercoaster kills a carload full of customers, whose relatives sue Six Flags in American courts.

Why this obsession with growth? Surely Six Flags has all the brand recognition it can use, and I can't see much in the way of economies of scale in theme park operation. So why not concentrate on the markets with the wealth and income to support theme parks?


Matthew said...

I hate to be that guy, but which corporate connections of Six Flags need a foothold in Nigeria?

Burke said...

Mmmm . . . according to Wikipedia, the names associated with the current management/ownership of Six Flags are:

Mark Shapiro, former Executive Vice President of Programming at ESPN

Jack Kemp

Bill Gates

Harvey Weinstein

Michael Kassan, of the Interpublic Group of Companies Incorporated

So . . . we have two Jews, two WASPs and an Iranian. Kemp is dead, and Gates is into a lot of stuff, but not oil that I can see. The others are entertainment guys of one sort or another.

I don't see an obvious connection to Nigeria, unless Gates is trying to get into the oil business, but why would he use his measley 11% stake in Six Flags to do it?

Please show us the way . . . .

Burke said...

Oops! I forgot Daniel Snyder. So add another Jew and entertainment guy. Still no connection to Nigeria . . . .

Trumwill said...

Not sure what they're thinking here. It's not growth for the sake of growth. They've dismantled or sold off more than half of their parks more than half of their marks in the last five years or so. They're in full-retreat mode. I have no idea why they would be expanding to that particular market.