Ohio Firm to Buy Knott’s Berry Farm

Knott’s Berry Farm, which pioneered the modern theme park in the 1940s but lately has been unable to grow as fast as rivals such as Disneyland and Universal Studios, said Tuesday that it has tentatively agreed to be sold to an Ohio firm that will pump in the cash needed to help it expand.

Cedar Fair LP, a publicly held partnership that owns Cedar Point in Sandusky, Ohio, and three other parks, will acquire the nation’s last major family-owned amusement park for an undisclosed amount of cash and stock.

Industry experts say the value of the deal, including debts that Cedar Fair will assume, will add up to nearly $300 million.

“Knott’s is well-known nationally and internationally,” said Richard L. Kinzel, Cedar Fair’s president. “We’re very pleased with the way it’s been managed, and we’ll keep the theme park going the way it is.”

Knott’s--which started in 1920 making jams and jellies, added chicken dinners and then grew into a major theme park--once held its own against its bigger neighbor, Disneyland in Anaheim. But the Buena Park attraction’s share of the market slipped--from third nationally in 1990 to 12th now--as competitors such as Disneyland, Universal Studios and Magic Mountain grew faster.

“Clearly, Knott’s was suffering in the competition,” said Ray Braun of Economics Research Associates, a Los Angeles amusement park consulting firm.

Buena Park officials also cheered the planned sale, not only for the future of Knott’s but for the region’s.

“I think it’s symbolic of the new, expanding economy,” City Councilman Steve Berry said. “I think it will be fabulous for Knott’s Berry Farm and Buena Park.”

Under the agreement, the family will turn over control of the attraction, its fabled chicken restaurant and the outside-the-gate shops to Cedar Fair. It is also selling its interest in Knott’s Camp Snoopy, the indoor park at the Mall of America outside Minneapolis.

In return, the family would become the largest single shareholder in the Ohio firm. It also would keep its one, off-site chicken restaurant, in Moreno Valley. The family sold its Rancho Santa Margarita restaurant last year.

Two of Knott’s directors, Darrel Anderson and Terry C. Hackett, both third-generation Knott family members, said the owners are satisfied with the deal.

“This was a difficult decision for the family to make,” said Hackett, who sits on the board with founders Walter and Cordelia Knott’s four children and six of 22 grandchildren.

Both Knott’s and Cedar Fair said they expect to complete the transaction by the end of the year, adding that the park would keep its old-time flavor, but would push ahead with Knott’s expansion plans, which call for a major wooden roller coaster to be operating by 1999.

“There’re lots of people who want to see some of the traditional values upheld and the landmarks and traditional atmosphere remain,” Berry said. “As a resident, I appreciate that.”

The acquisition was lauded by industry experts, who called Cedar Fair a well-run firm with the resources Knott’s needs.

And Wall Street liked the announcement as well. The price of Cedar Fair stock rose $1.75 a share to close at $48.50 in New York Stock Exchange trading.

Cedar Fair has been one of several companies on an acquisition binge in the last decade as the maturing amusement and theme park industry consolidates. Most sellers have been small companies, though another growing firm, Premier Parks in Oklahoma City, has been hired to take over management of Six Flags Over Texas in Dallas.

“There’s a trend not only to consolidate markets but to grow internationally as well,” amusement park consultant Braun said. “Everyone’s looking overseas. Universal is building in Osaka, [Japan]. Disney’s already in Tokyo and Paris.”

Over the years, Knott’s has been credited with pioneering the theme park model. But the evolution came slowly.

By 1940, as word of Cordelia Knott’s dinners and jams spread throughout the Los Angeles area, diners started lining up to eat. So the Knotts built a Ghost Town attraction, decorated with mining gear and other Western paraphernalia, to give diners something to do while waiting for a table.

“The first time I remember going there, there weren’t any fences up, and you could go anywhere you wanted to,” said Arthur C. Brown, now Buena Park’s mayor. “There weren’t any rides back then in 1953.

“We went to the chicken dinner restaurant, had lunch there, walked around, chased the ducks around the lake a little bit,” he said. “It was magic the first time I went, and it’s been magic ever since.”

The park enjoyed success even after the Disneyland behemoth opened in nearby Anaheim in 1955. But eventually Knott’s started adding rides, and the race to keep up with the competition increased.

In recent years, the family has known it would need more cash than it could bring to the table to expand and compete against the growing Disneyland mega-park as well as other major Southland attractions such as Universal Studios and Magic Mountain.

Last spring, the family partnership quietly decided in a meeting at its Independence Hall complex to find a partner with financial clout, even if it meant selling the park, said Hackett and Anderson.

Several months ago, the partners hired investment banker Goldman, Sachs & Co. in New York to find a match. More than a dozen national and foreign companies responded. The list was quickly whittled down, and about three weeks ago the Knott family started serious negotiations with Cedar Fair.

The Ohio firm endorsed the expansion plans that Knott’s has been working on. Knott’s already is clearing the way to build the huge wooden roller coaster that will reach out to Beach Boulevard, the main street into the attraction.

And Cedar Fair “loves coasters,” said firm spokesman Brian Witherow. Roller coasters are the big feature at the successful Cedar Point attraction, a pure amusement park with no themes to exploit.

“We’re very excited about the opportunity to put in world-class thrill rides out there,” he said, quickly adding that no other major changes at Knott’s are contemplated yet.

Cedar Fair President Kinzel said his firm will proceed slowly and will continue the themed areas of Knott’s. “We want to keep market share and continue to keep a good, clean, safe park,” he said.

The transaction is not expected to affect many Knott’s employees, which range from 4,000 during summer’s high season to as few as 350 in the winter months. The park’s longtime president, Terry Van Gorder, will help with the transition and take a consultant’s role at the end of the year, Hackett said. Van Gorder has sold his home in Palos Verdes Estates and bought one in Oregon.

While Knott’s would get a well-financed firm to support it, Cedar Fair would get its first all-weather attraction. Besides owning Cedar Point, on the shores of Lake Erie west of Cleveland, Cedar Fair has Valleyfair near Minneapolis, Dorney Park & Wildwater Kingdom near Allentown, Pa., and Worlds of Fun/Oceans of Fun in Kansas City.

Times staff writer Greg Johnson and correspondent Mimi Ko Cruz contributed to this story.

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Where Knott’s Ranks

Knott’s Berry Farm, third in U.S. theme park attendance in 1990, now ranks 12th.

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‘96 attendance Rank Park in millions 1. Disneyland 15.0 2. Magic Kingdom at Walt Disney World 13.8 3. EPCOT at Walt Disney World 11.2 4. Disney-MGM Studios (Florida) 10.0 5. Universal Studios Florida 8.8 12. Knott’s Berry Farm 3.6 13. Cedar Point (Ohio)* 3.5

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* owned by company buying Knott’s.

Source: Amusement Business

Researched by JANICE L. JONES / Los Angeles Times