slatham
Well-known member
This email came to me today at 12:20 from Tom Barker. Anyone have any insight?
At this point I have organized a new company, Magic Mountain Resort LLC, (MMR LLC) to operate Magic Mountain. That role for MMR will commence as soon as a lease is negotiated. There is general agreement on the terms of the lease. There is also an agreement that transfers to MMR LLC certain mountain related equipment, Point of Sale Terminals and similar office equipment and computers, Snowmaking Equipment , Groomers, Mowers and tools to MMR. MMR has not received and does not expect to receive any funds related to the Magic Faithful Club. Revenues from early 2014/15 season pass sales are being spent on the mountain for maintenance and MMR will fully honor those season pass commitments.
Recognize what is the structure of Magic’s management organization. At any time a company holds an operating lease and that operating company is totally responsible for its actions. In succession those companies were businesses that the Thorners and Boston Concessions owned, Old Fashioned Ski Company that Boraski owned, Magic Group that Aichholz owned, JLS Magic that Sullivan owned and now Magic Mountain Resort that I own. Each company was faced with running a mountain that has not generated significantly more revenue than it spent to sell the tickets. The Magic share program and the Magic Faithful Club were efforts by JLS Magic to address the problem and like other efforts by prior companies that program did not pass onto the next company. It seems intuitively safe to say the MFC funds were spent on the mountain. There were major repairs and purchases, i.e. Groomer, Red Chair, Irene silt in the pond, Snowmaking pipe welding, etc., that were paid for while there was no cash generated by the mountain. Where else could the money have come from?
At this point in time we do not have the accounting detail to state just how Mr. Sullivan spent the MFC funds. If MMR LLC finds an auditable explanation of MFC expenditures it will be published to the MFC donors. That is not because MMR LLC is responsible for any of this but because we all want the MFC donors to understand what happened, to not hold MMR LLC responsible and to remain faithful customers. However, if you have a legal complaint against the MFC operation your discussion has to be with Mr. Sullivan. His company JLS Magic still exists and it must respond to legal proceedings, but it has no revenue source from Magic.
Prior operating companies have failed because they could not contain cost to 75% of revenue. I’m facing that same problem. Relative to what will be done going forward, I am forced to make Magic work the old fashioned way, selling more stuff than I have to buy. My focus now and for the foreseeable future will be cost control. Last year Magic’s total revenue was about $950K and its total costs were $950K +/- $2K. That defines a breakeven situation. I will be focused on (1) maintaining or growing the revenue, (2) putting in enough money to carry operations through to winter without borrowing, (3) managing cost to end the year $200 to $300 K in the black and (4) rolling that extra cash back into the mountain on the type projects that were targeted by MFC funds.
As always I’m always available for discussions and I will be posting a manager’s blog to describe what is happening.
Tom
At this point I have organized a new company, Magic Mountain Resort LLC, (MMR LLC) to operate Magic Mountain. That role for MMR will commence as soon as a lease is negotiated. There is general agreement on the terms of the lease. There is also an agreement that transfers to MMR LLC certain mountain related equipment, Point of Sale Terminals and similar office equipment and computers, Snowmaking Equipment , Groomers, Mowers and tools to MMR. MMR has not received and does not expect to receive any funds related to the Magic Faithful Club. Revenues from early 2014/15 season pass sales are being spent on the mountain for maintenance and MMR will fully honor those season pass commitments.
Recognize what is the structure of Magic’s management organization. At any time a company holds an operating lease and that operating company is totally responsible for its actions. In succession those companies were businesses that the Thorners and Boston Concessions owned, Old Fashioned Ski Company that Boraski owned, Magic Group that Aichholz owned, JLS Magic that Sullivan owned and now Magic Mountain Resort that I own. Each company was faced with running a mountain that has not generated significantly more revenue than it spent to sell the tickets. The Magic share program and the Magic Faithful Club were efforts by JLS Magic to address the problem and like other efforts by prior companies that program did not pass onto the next company. It seems intuitively safe to say the MFC funds were spent on the mountain. There were major repairs and purchases, i.e. Groomer, Red Chair, Irene silt in the pond, Snowmaking pipe welding, etc., that were paid for while there was no cash generated by the mountain. Where else could the money have come from?
At this point in time we do not have the accounting detail to state just how Mr. Sullivan spent the MFC funds. If MMR LLC finds an auditable explanation of MFC expenditures it will be published to the MFC donors. That is not because MMR LLC is responsible for any of this but because we all want the MFC donors to understand what happened, to not hold MMR LLC responsible and to remain faithful customers. However, if you have a legal complaint against the MFC operation your discussion has to be with Mr. Sullivan. His company JLS Magic still exists and it must respond to legal proceedings, but it has no revenue source from Magic.
Prior operating companies have failed because they could not contain cost to 75% of revenue. I’m facing that same problem. Relative to what will be done going forward, I am forced to make Magic work the old fashioned way, selling more stuff than I have to buy. My focus now and for the foreseeable future will be cost control. Last year Magic’s total revenue was about $950K and its total costs were $950K +/- $2K. That defines a breakeven situation. I will be focused on (1) maintaining or growing the revenue, (2) putting in enough money to carry operations through to winter without borrowing, (3) managing cost to end the year $200 to $300 K in the black and (4) rolling that extra cash back into the mountain on the type projects that were targeted by MFC funds.
As always I’m always available for discussions and I will be posting a manager’s blog to describe what is happening.
Tom