The future of the American amusement park in a world of thrills dominated by Disney and Universal.

• Disney announced it will invest approximately $60 billion in its parks division over the next ten years in October.
• In August, it was announced that Universal would be investing $17 billion in its Florida theme parks over the next decade.
• The merger plans of Six Flags and Cedar Fair, which the Department of Justice is currently reviewing, are crucial for smaller park operators who have faced consolidation and closures across the country's local and regional attraction destinations.

Consolidation and change are happening in the theme park industry as consumer preferences evolve.

Due to the Covid-19 pandemic, smaller theme park operators have faced challenges in competing with larger amusement industry players such as Disney and Universal Studios, which have experienced significant growth from their theme park divisions.

The $8 billion merger between and, announced in November, was motivated in part by the need to address certain challenges. The resulting combined company would own over 40 attractions, including Knotts' Berry Farm, Magic Mountain, and Canada's Wonderland, as well as intellectual property from Peanuts, Looney Tunes, and DC Comics.

Cedar Fair CEO Richard Zimmerman stated that the merger would result in "increased levels of demand and in-park value and spending." Meanwhile, Six Flags CEO Selim Bassoui expressed his belief that the combination would "unlock new potential for our parks."

Industry experts and park aficionados believe that the combination of the two companies is necessary for park operators.

Smaller parks have struggled

Despite the efforts of smaller parks, they have been unable to compete with the massive plans of larger players in the industry. In recent years, Disney has announced plans to invest $60 billion in its parks division, while Universal has stated that it will invest $17 billion in its Florida theme parks over the next decade. Additionally, Universal is set to open a new expansion of its Orlando Park featuring a Super Mario attraction.

After serving park-goers for 137 years, Cincinnati, Ohio's historic Coney Island, which was intended to replicate the New York icon of the same name, closed down at the end of 2023.

The closing of Coney's marked the end of an era for Dennis Speigel, a Cincinnati-based theme park consultant who began his career at Coney Island and later served as the assistant general manager of Kings Island, now part of the Cedar Fair portfolio. After the success of Kings Island, Speigel was sent to Virginia to oversee the opening of a sister park, Kings Dominion.

The excitement about the deal from long-time industry players can sometimes be exaggerated. According to amusement park blogger Don Helbig, who has the most rides on Kings Island's classic coaster, the Racer, with over 10,000 rides, and worked in public relations at Cedar Fair-owned Kings Island for 16 years until last June, when these two elements come together, they have the potential to transform the industry.

The two largest players in the theme park industry, aside from Disney and Universal, have significant buying power that can be used to obtain better pricing on everything from roller coaster track to hamburger buns, which will ultimately enhance the guest experience. Helbig also highlighted Six Flags' partnerships with major tech firms such as Google, Dell, and Snowflake, which can be utilized across all the parks. There is a logical reason for this partnership, which relates to recent developments on the national theme park landscape.

Since the 1990s and early 2000s, large companies have acquired smaller ones, resulting in the disappearance of most family-owned small parks.

The merger of Six Flags and Cedar Fair makes sense from an operational standpoint, but Cedar Fair brings stability to the union from a front-office perspective.

Speigel stated that Six Flags was in a poor condition as it lacked a captain for several years.

In contrast to Cedar Fair, Six Flags is described as a "nose to the grindstone theme park operator" with a less experienced leadership team. Six Flags has had seven park presidents in 20 months and three CEOs in seven years.

Zimmerman, the current CEO and President of Cedar Fair, will retain his title at the new company, while Bassoul, the CEO of Six Flags, will become the executive chairman of the combined board of directors. Cedar Fair shareholders will own a slight majority of the new company.

Six Flags and Cedar Fair both declined to comment.

Jeffries' managing director in New York, David Katz, concurs that Six Flags has been inconsistent recently, which has negatively impacted its stock prices and performance.

Katz stated that Six Flags has been inconsistently managed for a long time. Despite going through bankruptcy during the Great Recession, the company emerged and had a good run for a while. However, around 2018 or 2019, Katz said that the company needed more room to grow and started cycling through strategies, none of which stuck.

Katz stated that Salim and his team lack a clear understanding of how to effectively manage the business for profit and growth, while also increasing shareholder value.

In the first nine months of 2023, Six Flags reported 17.9 million guests, representing a 9% increase from the previous year. However, in the same period in 2019, the company had 26.7 million guests visit its parks. Despite a 40.6% increase in guest spending per capita, revenue for the first nine months of 2023 was down 9.77% compared to 2019.

A more consistent ride at Cedar Fair

In 2023, Cedar Fair experienced a decline in attendance from 22.9 million visitors in the first nine months of 2019 to 20.9 million. Despite this, the company's in-park capita spending increased from $48.73 in 2019 to $61.73 in 2023, and revenues also rose from $1.2 billion in 2019 to $1.4 billion in 2023.

Cedar Fair has been consistently run and has done a solid job of deploying capital and running a stable, mature business, according to Katz. He anticipates the focus will shift back to creating a stable portfolio of parks in North America.

Disney is unique in the travel and leisure industry, according to Katz.

According to Katz, larger parks are referred to as "destination experiences," while theme parks are typically single-day trips. However, Katz stated that theme parks can be profitable investments and stable centers.

The new entity, which combines Six Flags and Cedar Fair, will be able to increase customer loyalty and repeat business, with visitors cycling in and out, according to Katz. Six Flags has attempted to boost revenue through a loyalty program, and Katz believes the new company will build on this success. Katz emphasized that theme parks have a significant impact on driving scale benefits.

Katz stated that loyalty programs can be highly effective. Although company leaders have pledged to maintain park names, they may need to discover a way to unite the two brands under a single, easily recognizable name.

Stifel analysts believe that the merged company will adopt Cedar Fair's strategy of gradually increasing attendance while keeping prices moderate.

"Stifel wrote in an analysis that SIX made a significant change in their approach about two years ago by limiting attendance growth through aggressive pricing. However, Stifel believes that the combined company would have a pricing/growth strategy that is more aligned with FUN than SIX's new philosophy."

Carissa Baker, a professor at the University of Central Florida, is familiar with theme parks. She resides near SeaWorld and can view Universal's Epic Universe from her workplace. Although the merger of Six Flags and Cedar Fair caught her off guard, she believes it is a logical decision for the two companies.

Both companies have a history of significant acquisitions and mergers, and have experience integrating properties and products. As they await regulatory approval, they are already working on growth opportunities, which could lead to exciting developments.

Although Baker anticipates that the new industry giant in the theme park business will have a limited impact on Disney and Universal's larger rivals.

According to Baker, the impact of the new policy on the top two U.S. players is uncertain. Instead, the average visitor is more likely to visit their local parks more often and save up for years to visit destination resorts.

Neither Disney nor a Universal spokesperson responded to requests for comment by press time.

The consolidation of the domestic theme park market may more clearly define the respective segment leaders, leaving only a few independent ride parks scattered across the country. Six Flags/Cedar Fair is likely to own the "ride/thrill park" category, while Disney, Universal, Seaworld, and Legoland own their respective categories.

Disney and Universal are considered destination resorts with theme parks in various global markets, attracting international visitors for extended stays, despite having fewer theme parks. Disney and Universal properties are located in large population areas and have year-round operating calendars, while most Six Flags-Cedar Fair parks are seasonal. The merger of Disney and Universal will result in a company with a broader portfolio and greater market share but may have little impact on the global Disney brand.

In Texas, Six Flags dominates the amusement park scene.

Wynne stated that they are not opposed, as long as the park is enhanced.

Angus, Wynne's father, founded the Six Flags brand in 1961 by launching a theme park in Dallas. The park was intended to commemorate different eras of Texas history, but Wynne stated that it was only meant to exist temporarily for a few years before being demolished.

Wynne's plan was for the park to generate cash flow for his family's industrial park, but Six Flags took off in Texas and opened parks in Greater Atlanta and St. Louis. Instead of starting new parks from scratch, Six Flags began buying, branding, and transforming struggling amusement parks. Wynne attributes his father's innovation of the single-ticket concept, where park-goers pay one price for admission instead of paying to go on each ride, as a key factor in their success.

Wynne admitted that he was unfamiliar with Cedar Fair until the October announcement, and he believes that 95% of Texans are also unaware of the company. Despite this, he hopes the merger will be successful.

Wynne stated that he hoped the owners would handle the property with care and improve it, as he and his family had not been involved with Six Flags for a while. His father passed away in 1979.

Elizabeth Ringas, president of the American Coaster Enthusiasts, who has ridden over 700 coasters in 140 theme parks and fairs over the past few decades, stated, "It's like blending families." She explained, "There are some things each does well and some things they don't as well. If the new company builds on the best of both, it could be a phenomenal experience for the guests."

Although Ringas is unable to choose between Six Flags and Cedar Fair, she has a clear favorite coaster, which is the Beast at Kings Island. The Beast, known as the longest wooden coaster in the world, provides a thrilling 4-minute ride that includes soaring heights and roaring tunnels.

Cedar Fair's signature touches are expected to shine through in the combination, as Helbig anticipates guests noticing them.

Cedar Fair's hallmark of no straws or cup lids at their properties will be the first thing Six Flags guests will notice, according to Helbig. However, he believes that the experience of going to the amusement park will always be an escape and fun.

Disclosure: Comcast is the parent company of NBCUniversal, which owns CNBC.

The earlier version of the article incorrectly reported the stance of Stifel's analyst team on the management of a combined Six Flags-Cedar Fair. Additionally, the reference to a partnership between Six Flags and Marvel has been removed, and the updated article now states that a combined Six Flags-Cedar Fair would feature attractions based on intellectual property from Peanuts, Looney Tunes, and DC Comics.