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No Walk in the Park for CBS

CBS Corp. said Monday that it has reached an agreement to sell its Paramount Parks theme parks to Ohio-based amusement-park operator Cedar Fair L.P. for $1.24 billion in cash.

CBS said Jan. 26 -- shortly after its split from Viacom Inc. -- that it would divest of the theme parks to focus more on its core content operations. In addition to the CBS broadcast-television network, the company also includes several TV stations, Showtime Networks Inc., CBS Outdoor and CBS Radio.

The Paramount Parks include Canada's Wonderland near Toronto; King's Island near Cincinnati; King's Dominion near Richmond, Va.; Carowinds near Charlotte, N.C.; and Great America in Santa Clara, Calif., and they will remain in full operation through the divestiture. The deal is expected to close in the third quarter.

The price works out to be about nine times 2005 cash flow, according to Miller Tabak & Co. LLC media analyst David Joyce. “It was a pretty healthy price,” he said. Joyce expects CBS to use the cash to either pay down some of its debt or for share buybacks.

Cedar Fair is based in Sandusky, Ohio, and it operates seven amusement parks -- Cedar Point on Lake Erie in Sandusky; Knott’s Berry Farm near Los Angeles; Dorney Park & Wildwater Kingdom near Allentown, Pa.; Valleyfair near Minneapolis/St. Paul; Worlds of Fun in Kansas City, Mo.; Geauga Lake & Wildwater Kingdom near Cleveland; and Michigan’s Adventure near Muskegon, Mich.

The company also operates five water parks near San Diego and Palm Springs, Calif., and adjacent to Cedar Point, Knott’s Berry Farm and Worlds of Fun. And it owns and operates the Castaway Bay Indoor Waterpark Resort in Sandusky.

The deal doubles the size of Cedar Point, which had about 12.7 million visitors to its theme parks in 2005. Paramount Parks had 12 million visitors in 2005.

Although CBS does not break out the financials of its theme parks separately, its parks and publishing division -- which includes book publisher Simon & Schuster Inc. -- reported revenue of $1.2 billion and cash flow of $117.6 million in 2005.