Note to regulators: Let Knott’s and Six Flags merge

THEME PARK INSIDER

Guests ride the Wonder Woman Flight of Courage roller coaster at Six Flags Magic Mountain in Valencia, one of two Southern California theme parks that would be owned by the same company under a Knott’s-Six Flags merger. HANS GUTKNECHT — STAFF PHOTOGRAPHER

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What will happen to Knott’s Berry Farm and Six Flags Magic Mountain when their parent companies merge? In its most recent financial earnings report, Knott’s owner Cedar Fair confirmed that the federal government is examining the proposed merger between it and Six Flags, which was announced last year.

The two companies would have a combined attendance of more than 50 million visitors a year, making the new venture the second most popular theme park operator in the United States, behind Disney and passing Universal, which attracted more than 31 million visitors in the U.S. in 2022, according to the TEA/AECOM Theme Index attendance report. Disney’s parks in the U.S. attracted about 75 million guests that year, the report said.

Despite the two companies’ size, there are only two media markets in which Cedar Fair and Six Flags both operate theme parks: the Bay Area and Southern California. In Northern California, Cedar Fair already has announced plans to close California’s Great America within the next 10 years. So it’s really just in Southern California where two directly competing parks would come under the same ownership.

But is that a problem for consumers? Bringing those two parks together, the new Six Flags would remain the third most popular theme park company in Southern California, trailing Disney and Universal. Both of those companies have announced aggressive expansion plans to maintain and extend their attendance and revenue leads in the market, while expansion has slowed considerably at both Knott’s and Magic Mountain since the pandemic.

Theme parks are a capital-intensive business. Disney and Universal routinely spend hundreds of millions on their headlining new attractions. As part of multinational entertainment conglomerates, Disney and Universal have access to financial capital that their competitors simply cannot match. Forcing the new Six Flags to sell Knott’s or Magic Mountain as a condition of the deal is not as simple as waving a magic wand. Any new owner would need to have the capital resources to compete with Disney and Universal, not to mention SeaWorld — soon to rebrand as United Parks — and the new Six Flags.

With Merlin Entertainments owning Legoland California and Parques Reunidos owning Raging Waters, the biggest theme park company in the U.S. that is not already in the Southern California market is Herschend, which owns Dollywood and Silver Dollar City. That would be a great fit for running Knott’s, but it’s hard to imagine that Herschend could come up with more money to buy that park than local real estate investors would offer to get control of its land.

That’s the real danger for theme park fans if the federal government opposes or restricts the merger of Cedar Fair and Six Flags. The Southern California parks are the most popular in each chain, and the land underneath them is the most valuable asset each company owns. If the new Six Flags cannot enjoy the benefit of running both Knott’s and Magic Mountain together, it’s possible the company would end up selling one of them for its land value to get the cash needed to compete with Disney and Universal rather than ensuring its future as a theme park.

As a fan, I would hate to see that happen. Bring on the new Six Flags.

Robert Niles covers the themed entertainment industry as the editor of ThemeParkInsider.com.