What the heck is going on at Magic?

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  1. #1

    What the heck is going on at Magic?

    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 Magicís 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. Iím 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 Magicís 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 Iím always available for discussions and I will be posting a managerís blog to describe what is happening.

    Tom
    2017/18 = 37
    2016/17 = 31
    2015/16 = Depressing
    2014/15 = 28
    2013/14 = 27

  2. #2
    thetrailboss's Avatar
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    Huh?

    So Sullivan is out?
    Live, Ski, or Die!


  3. #3
    wow, don't know exactly what it means but doesn't sound good.
    shit happens, wear a helmet.

    2018/19
    Breck - 12/2 12/22 12/23 1/5 1/6 2/9 3/10
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  4. #4
    thetrailboss's Avatar
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    Is this someone who is dissatisfied with Magic and trying to take it over? This is a rambling Email.
    Live, Ski, or Die!


  5. #5
    Got the same email and still digesting it.
    "If you ride your bike everyday...... Your going to be a better rider!"

  6. #6
    reefer's Avatar
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    From the Magic Faithful page. Makes me want to go up and check out the fireworks Saturday..................

    Magic Faithful Club
    We believe in Magic


    June Ownership Update

    Here's an update from ownership as of 6/25/14:

    In light of recent perceptions that changing management of the mountain would be a prudent maneuver for the mountain and its future, please be advised that JLS Magic, LLC and its sole member, Jim Sullivan, will no longer be in charge of operating or managing the mountain and a new entity headed by Tom Barker will take over control of operations and all financial matters. The mountain will continue to operate, and the ownership is looking forward to moving Magic forward."


  7. #7
    thetrailboss's Avatar
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    Quote Originally Posted by reefer View Post
    From the Magic Faithful page. Makes me want to go up and check out the fireworks Saturday..................

    Magic Faithful Club
    We believe in Magic


    June Ownership Update

    Here's an update from ownership as of 6/25/14:

    In light of recent perceptions that changing management of the mountain would be a prudent maneuver for the mountain and its future, please be advised that JLS Magic, LLC and its sole member, Jim Sullivan, will no longer be in charge of operating or managing the mountain and a new entity headed by Tom Barker will take over control of operations and all financial matters. The mountain will continue to operate, and the ownership is looking forward to moving Magic forward."

    Hmmm....

    Mr. Barker needs to at least proofread his press releases/Emails. I took what was posted to be a crazy rambling Email as opposed to a communication from a business person. Maybe I'm harsh or jonesin to ski, but that was just my opinion.
    Live, Ski, or Die!


  8. #8
    Abubob's Avatar
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    Magic is under new management - that's it. Sullivan is out but responsible for any complaints against his company. Barker is in, admits everyone else's failures, will honor any early 14-15 passes sold, try to control costs, finish the upcoming season in the black.
    "Happiness equals reality minus expectations." Tommy Magliozzi

  9. #9
    i think we need an AlpineZone investigative reporter on this ASAP.
    shit happens, wear a helmet.

    2018/19
    Breck - 12/2 12/22 12/23 1/5 1/6 2/9 3/10
    Taos - 1/26
    Keystone - 2/24
    Crested Butte - 3/25 3/26 3/27

  10. #10
    thetrailboss's Avatar
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    Quote Originally Posted by Abubob View Post
    Magic is under new management - that's it. Sullivan is out but responsible for any complaints against his company. Barker is in, admits everyone else's failures, will honor any early 14-15 passes sold, try to control costs, finish the upcoming season in the black.
    Good summary.

    What is the backstory? It seems like there is some hostility/uncertainty here. Why would a new manager be coming out so defensive?
    Live, Ski, or Die!


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