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Peak Resorts: The New ASC?

drjeff

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Qft

People can tease about him all day, but the guy has been as successful a ski area developer in New England ski history as anyone.

Agree 100%

Sure he's a controversial figure in the history of the ski industry (especially the New England ski industry) but without a doubt he's one of the top if not the top figure in the last 30yrs who changed the ski industry

Whether that change was a good or a bad thing is 100% up for debate
 

BenedictGomez

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jerryg

I appreciate the back up man, but we're wrong. BG has spoken.

I'm sure you'll love this, but he actually is wrong. SKI went public in 1997, I remember it very well as I know someone from college who was involved.

And yes, a lot of people DID lose money on the public (not private) company, as they do with any catastrophe that befalls a publicly traded company, and the little guys usually get hurt the worst.

The smart money (hedge funds & mutual funds) typically find the exits before the complete implosion. In fact, when a lifestyle issue like SKI goes "kaboom", it's usually much worse from the retail standpoint than when some business involved in something esoteric busts, because you get a lot of "investors" (term used loosely) who put their money in it because they like something, in this case, skiing. That said, joshua segal is absolutely correct on this, caveat emptor - nobody forced them to put their money into an irresponsibly run ski company.
 

deadheadskier

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Well, I'm quite grateful that LBO ran his company so irresponsibly. I've enjoyed his infrastructure improvements every year for the past 30 seasons. His cheap season passes were an ullrsend when I had less disposable income.

Side story; my resort marketing and sales professor at UVM was a buddy of LBO's from college. He said he used to find Les at the bar drawing ski trail maps on cocktail napkins. Les would tell him that someday he was going to own the largest Ski resort company in the country. Pretty amazing that by age 30 he owned his own ski area and achieved his goal by his 40s while overseeing some of the most massive terrain and infrastructure expansion in the history of the industry.

.....one person here apparently doesn't find that at all impressive.
 

jerryg

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I'm sure you'll love this, but he actually is wrong. SKI went public in 1997, I remember it very well as I know someone from college who was involved.

You're right. I was wrong about the IPO date as SKI did go public in 1997 and was doing fine, it was the merger that created ASC that created a different stock offering and then the ship went downhill. The SKI IPO was small and the stock never did well, but the real trouble for LBO wasn't until after 2001, which is when the company started to divest and was delisted in 2002. Oak Hill joined the fold in 1999 and threw in $150 million and was then the ones calling the shots. LBO was forced to resign as CEO in 2001. He was not, however, forced off the BOD until 2007. It could be argued that the company direction under BJ Fair was just as much to blame than anything LBO did.

There are so many reasons that the company failed and obviously they took on too much debt, but like has been said and you agreed, people who invested, did so on their own and under their own free will. My real point in all this was to point out that the resorts involved have for the most part, done quite well. I think you mentioned that they were purchased out of bankruptcy, but this simply isn't the case. Whether they were sold off for less than their value is speculation at best as the market will dictate that.

I just think that for anyone to not appreciate that LBO did some great things for the ski industry, is unfortunate. There was a lot of innovation during those years before the eventual downfall and I'd be interested to meet someone who lost their livelihood based on their portfolio including S-K-I. I doubt any of it's investors felt their personal wallets get pinched. Heck, if you're buying stock in the ski industry, you're asking for trouble.
 

EPB

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Well, I'm quite grateful that LBO ran his company so irresponsibly. I've enjoyed his infrastructure improvements every year for the past 30 seasons.

BG - this it the type of logic I have to deal with with respect to those in favor of a state owned and operated Cannon... In all seriousness, LBO certainly raised the bar snowmaking and lift system-wise and the rest of the industry was forced to keep up. So from a quality of skiing product perspective, he left his mark. That does not, however, negate or excuse the fact that he and his company went down in flames about as hard as anyone, especially absent of a serious scandal or fraud.
 

deadheadskier

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Bit off more than he can chew, no one is arguing against that.

His legacy remains. How many 100s of jobs at Sunday River exist today that wouldn't be there without his influence? Same goes for Attitash and the expansion he did there. Canyons? Heavenly?

As has been pointed out many times in this thread, every single one of the former ASC resorts are still around and doing well. Most haven't done nearly as much in the way of expansion as what he accomplished. So, it's hard to say if all these areas would be nearly as successful as they are today had he never been involved.

I'd put Les's resume against any member of this forum that's for damn sure.
 

doublediamond

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It doesn't matter what they save if they are not bringing in the revenue.

With no real estate development possible, if Wildcat was truly running in the red, the old owner would have closed it long ago. Since Peak bought it, it has combined management costs with Attitash, which obviously improves the bottom line, and they have made massive snowmaking efficiency/pipe improvements, which means they can either make more snow for the same amount of money, or they can make the same amount of snow for far less. The HKDs and SnowLogics are far far more efficient than the Ratnik ground guns they used to run. Revenues don't matter. Profit does. And the summer improvements heavily improve their profit margin.

They will always need to rely on diesel compressors unless PSNH forks over money to improve the electric lines through the notch.
 

machski

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Being a smaller resort and held by ASC for a very brief window, Cranmore benefitted big time. They got the Snowmobile Express quad, SR type snow guns which did wonders at the time for their snowmaking among other pluses. Without the ASC options, I'm not sure Cranmore would be on the trajectory it is today (could very well be collecting cob webs instead)
 

BenedictGomez

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Well, I'm quite grateful that LBO ran his company so irresponsibly. I've enjoyed his infrastructure improvements every year for the past 30 seasons..........one person here apparently doesn't find that at all impressive.

I'll make you a deal.

You give me $200,000,000, and I'll build you the most impressive hotdog restaurant this side of the Mississippi.

I'm not going to promise you that the company wont be financially crippled and nearly bankrupt 5 years from now, but the heavy infrastructure and beautiful real estate in my dead hotdog company will still have plenty of value, so it will still be there long after I piss your $200,000,000 away, because somebody else will buy it for far less.

Imagine all the people who will be "grateful" that I destroyed shareholder equity.
 

machski

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BG, I seriously doubt that LBO will make the same mistakes again. Another thing he had in the Balsams venture is that NH politics want him to succeed in this venture given how devastated that region of NH is jobwise. I'm sure The Donald has learned a thing or 2 from his previous failures. LBO did great when he kept things smaller in terms of # of resorts. He was really brilliant with 1 in his portfolio financially for what, a decade and a half?!
 

BenedictGomez

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BG - this it the type of logic I have to deal with

Apparently the massive destruction of money is a "success" as long as something I enjoy is created by it.

BG, I seriously doubt that LBO will make the same mistakes again.

He's already been quoted as trying to line up something like $100,000,000. :-o

Granted interest rates are historically low right now, but still, that's a big number for a part of New Hampshire that's known to be difficult from a competition/business standpoint etc...
 
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doublediamond

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IIRC, ASC was cash-positive before consideration of debt payments. Les Otten simply over-expanded too quickly during the economic and real estate boom in the '90s. That's a very eerie similarity to Peaks, which is cash-positive before debt and facing 11% debt on Mount Snow. That kind of interest rate is unheard of these days.
 

deadheadskier

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I'll make you a deal.

You give me $200,000,000, and I'll build you the most impressive hotdog restaurant this side of the Mississippi.

I'm not going to promise you that the company wont be financially crippled and nearly bankrupt 5 years from now, but the heavy infrastructure and beautiful real estate in my dead hotdog company will still have plenty of value, so it will still be there long after I piss your $200,000,000 away, because somebody else will buy it for far less.

Imagine all the people who will be "grateful" that I destroyed shareholder equity.


Did you buy your first ski resort at 30 years old and grow it from one of the smallest in New England to the second largest???? I'm not asking you to own the largest ski resort company, let's just start with one ski area.

If you have that on your resume (shit, with the game you talk, one would think you built Whistler Blackhomb from scratch with your bare hands), then I might entertain you for an interview.
 

deadheadskier

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Apparently the massive destruction of money is a "success" as long as something I enjoy is created by it.

hundreds of jobs still around because of LBO. that's a fact you can't deny

Sorry the gamblers on Wall Street lost on that bet. My heart really bleeds for those poor investors who were so smart as to bet on skiing.
 

Tin

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With no real estate development possible, if Wildcat was truly running in the red, the old owner would have closed it long ago. Since Peak bought it, it has combined management costs with Attitash, which obviously improves the bottom line, and they have made massive snowmaking efficiency/pipe improvements, which means they can either make more snow for the same amount of money, or they can make the same amount of snow for far less. The HKDs and SnowLogics are far far more efficient than the Ratnik ground guns they used to run. Revenues don't matter. Profit does. And the summer improvements heavily improve their profit margin.

They will always need to rely on diesel compressors unless PSNH forks over money to improve the electric lines through the notch.

They won't make anything if they get only 64,000 visits again. If the people are not coming then all the cost saving measures in the world don't matter.
 

BenedictGomez

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Did you buy your first ski resort at 30 years old and grow it from one of the smallest in New England to the second largest???? I'm not asking you to own the largest ski resort company, let's just start with one ski area.

No, but then I didnt blow $200,000,000 shareholder equity in 2.5 years either.

Honestly, I'm not sure what the deal is with your infatuation with this guy, but I guess it's safe to say you don't have a, "Less Otten, More Skiing" bumper sticker on your car.

hundreds of jobs still around because of LBO. that's a fact you can't deny

People will still work at my hotdog stands too, what's your point? I'm not sure you recognize this, but by the very logic you're expressing here, anyone who swindles or can raise such a MASSIVE sum of money that there's significant residual value in something after it "blows up" due to its' immense size - is a success.

That is a completely bizarre viewpoint.
 

BenedictGomez

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Getting back to the Peaks IPO this thread is supposed to be about, do not be surprised if that never comes to fruition and the IPO gets yanked.
 
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