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Why is Kansas City Chiefs tight end Travis Kelce teaming up with activist investor firm Jana Partners to buy a 9 percent stake in Six Flags for $200 million? Because it looks like a very, very smart move. Six Flags share price, which was down about 50 percent this year, rose 18 percent on the news. This just might be the investment that saves a beloved American brand and makes a lot of money for Kelce at the same time.
Six Flags has been struggling for the past several years, especially since traffic to its parks have never returned to their pre-pandemic levels. The company cut costs, leading to poorer maintenance at its parks. Meantime, Six Flags management tried to improve the company’s finances with sharp price hikes that drove even more customers away. A merger last year with amusement park chain Cedar Fair made matters worse. The newly combined company struggled to integrate two very different systems and customers grew frustrated.
But this deal has the potential to turn all of that around. Beyond a badly needed cash infusion, both Kelce and Jana bring abilities that Six Flags can really use right now. Jana is known as a more benign activist investor that works with a company’s existing management to solve its most pressing problems. The firm plans to push Six Flags to improve its technology, build better relationships with customers, and reward frequent visitors, according to The Wall Street Journal, which first reported the deal. (Jana discovered that, far from encouraging visitors to buy season passes, Six Flags made it almost impossible to purchase one.)
Kelce can bring his love of amusement parks and his enormous fan base to the deal. That process has already begun, with Kelce discussing the investment and his love of amusement parks on New Heights, the podcast he co-hosts with his brother, former Philadelphia Eagle Jason Kelce.
Travis Kelce is a sophisticated investor.
The Journal‘s reporting also revealed a side of Kelce we don’t often get to see. Kelce’s public image is of a good-natured, highly emotional guy, and a supremely talented and hardworking tight end who enjoys a good time and is up for any kind of party. We don’t necessarily think of him as a sophisticated business executive and investor. But apparently, he’s those things as well.
Both Kelce brothers are big investors in Garage Beer. Its CEO Andy Sauer told the Journal that while Jason brings creativity to the table, Travis has an instinct for spotting opportunity, just as he does on the football field. He’s famous for abandoning planned routes and instead finding wide-open spaces on the field. It’s why he’s traditionally been the default passing target for Chiefs quarterback Patrick Mahomes. “He sees things that other people miss,” Sauer said.
Kelce’s investment choices also suggest a very straightforward formula for assessing any investment or other business opportunity. And whether you have $200 million of your own to invest, or you’re working on a smaller scale, it can work for you too.
1. Can you bring added value to the deal?
Money is always useful. But in the best deals, there are also intangible benefits and synergies that go way beyond the dollar signs. This is why founders are often advised to evaluate investors not only for how much they’re willing to invest, but what else they can offer, such as industry expertise, visibility, or contacts.
Kelce’s ultra-high profile would be a boon for any company, of course. That’s why brands from State Farm to Buffalo Wild Wings sponsor New Heights. But there’s a special synergy with an amusement park chain. Kelce grew up loving amusement parks and can be genuine in his enthusiasm. And the off chance that Kelce–or better yet, Kelce plus his fiancée Taylor Swift–might show up at a Six Flags park is bound to drive up attendance.
2. Is it something you know well?
Warren Buffett is one of many investment gurus who recommends investing in products and industries you know well. That’s really great advice. Kelce knows amusement parks well, having spent plenty of time at them while he was growing up. But he also knows entertainment, and how to connect to a fan base. That expertise can serve Six Flags well.
Both Kelces have done very well for themselves by following this simple rule. They invested in Garage Beer after drinking quite a bit of it. Travis is a known clothes horse, with so much apparel that he converted a spare bedroom into an especially large walk-in closet. And he’s a model in his spare time. So it makes sense that he’s partnered with American Eagle and also created his own clothing line.
3. Will it be fun?
This might seem like something you shouldn’t worry about when choosing an investment. But I’d argue it’s an important question if you plan to be more than a passive investor. If you enjoy what you’re investing in, you’ll be more likely to devote your time and attention to it. That means you’ll bring more added value to the mix.
Besides, life is short. You already spend too much of it working. Why not choose to spend your limited time on things that you truly enjoy? That certainly seems to be Kelce’s philosophy. Leaving aside a football player’s grueling workouts, everything he does looks like tremendous fun. That approach has worked out very well for him. It just might work for you, too.
The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.
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Minda Zetlin
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