Cannon Mountain...thoughts

[thetrailboss]

Back on track.... :wink:

 

[EPB]

I find it interesting that noone is chiming in backing you up on this one. I wouldnt want to meet you on the trails either threecy, or should I say rocket21.

I'm an NH resident who would rather see Cannon leased. It would ensure steady positive cash flows for a fixed period of time. It's something that operating the mountain simply cannot guarantee. Furthermore, if one wants to play the "benevolent leader" card, the Mt. Sunapee lease demonstrated that leasing a ski area can provide more benefit for the resort's surrounding communities than with state ownership.

 

[jack97]

The two biggest slopeside 'resort' type of areas are priced above Cannon:
2010-2011:
Bretton Woods $76, $68 midweek
Cannon $67, $67 midweek
Loon $76, $76 midweek

ok stick to the above areas, only Cannon has these deals

Tuesdays & Thursdays 2-for-$67 or 1-for-$42
*Not valid 12/28/10, 12/30/10, 2/22/11, 2/24/11

NH Resident Wednesdays $35
Every Wednesday, non-holiday, New Hampshire Residents can purchase a lift ticket for just $35!
Proof of NH residency required. One ticket per Wednesday per resident. Not valid: 12/29/10


Still...for weekend trip, that's a saving of $10-$20 per person per trip. Maximizing profits will prolly align it to Loon and BW pricing... meaning the above midweeks deals are off the table as well.

 

[threecy]

So if I argue for the sake of arguing...... given how Cannon is presently operating, it is benefiting the groups of skiers that can not afford to ski at places like Loon and BW. Maximizing it for the the highest revenue does not garantee affordable lift tickets. It has nothing to do with fairness but of ensuring lower cost to the average Joe.

ok stick to the above areas, only Cannon has these deals

Tuesdays & Thursdays 2-for-$67 or 1-for-$42
*Not valid 12/28/10, 12/30/10, 2/22/11, 2/24/11

NH Resident Wednesdays $35
Every Wednesday, non-holiday, New Hampshire Residents can purchase a lift ticket for just $35!
Proof of NH residency required. One ticket per Wednesday per resident. Not valid: 12/29/10


Still...for weekend trip, that's $10-$20 per person per trip of savings. Maximizing profits will prolly align it to the Loon and BW pricing... meaning the above midweeks deals are off the table.

Firstly, Waterville has done a $1 day this past season, as well as other discounts. Pre-Peak Resorts, Wildcat had some $9 days. Many of the listed areas have various discounts for day and overnight skiers.

Secondly, especially in today's economy, a lot of average Joes can't afford to lose a day's wages in order to get a midweek discount.

Thirdly, resident discounts can be mandated in a Cannon lease.

Fourth(ly?), I don't think one would see a leased Cannon, with a 100-130K skier visit runrate, raising lift ticket prices to the level of Loon at this point. There are other ways to generate profits.

 

[Cannonball]

Anyone have an opinion on privatized roadways? Might cost you a $30 toll here and there but it would guarantee the some lease and tax income to the state every year.

 

[witch hobble]

the Mt. Sunapee lease demonstrated that leasing a ski area can provide more benefit for the resort's surrounding communities than with state ownership.

Would those lessees have been as interested in leasing Sunapee if they had known then what they know now?

Were there other potential lessees for Sunapee at the time?

 

[jack97]

Firstly, Waterville has done a $1 day this past season, as well as other discounts. Pre-Peak Resorts, Wildcat had some $9 days. Many of the listed areas have various discounts for day and overnight skiers.

Secondly, especially in today's economy, a lot of average Joes can't afford to lose a day's wages in order to get a midweek discount.

Stick to the areas... proponents for privatization has been using Loon as the model for compassion..... this has been going since 2007.

In terms of the average Joe, he might have wife and kids, that a saving of $20-$36 per day trip. I been to that place on the weekends, I see more family's packing there own lunch and drinks than any other places.

Also I see alot of Average Joes during midweek, certain trails can get just as crowded as a weekend.

 

[jack97]

.....the Mt. Sunapee lease demonstrated that leasing a ski area can provide more benefit for the resort's surrounding communities than with state ownership.

Only if you're a landlord or someone who has a business nearby.

 

[jack97]

Thirdly, resident discounts can be mandated in a Cannon lease.

Fourth(ly?), I don't think one would see a leased Cannon, with a 100-130K skier visit runrate, raising lift ticket prices to the level of Loon at this point. There are other ways to generate profits.

haha.... that's reeks of having the state mandating a ski operator how to run a business.

 

[threecy]

Would those lessees have been as interested in leasing Sunapee if they had known then what they know now?

Were there other potential lessees for Sunapee at the time?

That's been a pretty messy situation, in part due to the changes that happened in Concord and a lack of clarity in some of the documents (hopefully the sta. The Muellers apparently have something in writing that would have allowed them to expand over to privately held land, but some changes in Concord caused that to stall. ASC was apparently also interested, but hadn't been looking into a private land development. I'm not sure how many companies bidded on it in total.

Stick to the areas... proponents for privatization has been using Loon as the model for compassion..... this has been going since 2007.

Do you have any examples? This has been going on for a much longer time than 2007, and I don't think Loon has been the only or prime example (especially since a leased Cannon would likely have zero real estate).

Only if you're a landlord or someone who has a business nearby.

I don't know about that one...I spent a lot of time in Sunapee on a renovation project maybe about half a decade or so after Sunapee was leased...that was not what I was hearing. The ski area was bringing in more people to the area and was, for the first time, contributing taxes on a local level. They also have been doing a lot of good will stuff, such providing college scholarships to locals.

haha.... that's reeks of having the state mandating a ski operator how to run a business.

If it were a lease loaded with provisions, that would be a valid argument in my opinion. However, a lease that clearly sets boundaries and preserves what is deemed critical to the mountain is not a bad thing.

 

[Cannonball]

Thirdly, resident discounts can be mandated in a Cannon lease.

haha.... that's reeks of having the state mandating a ski operator how to run a business.

True Jack, that is pretty hilarious given the anti-government involvement perspective of Threecy's argument.

But more importantly it's just not realistic. Threecy keeps talking out of both sides of his mouth. One side: A private business would find Cannon appealing and profitable. The other side: The State could make them operate just like the state currently does, dictating the discounts, terms, operations, etc. You can't have it both ways.

I go back to my original argument some 30 pages ago.....It boils down to simple economics. This can either be a profitable business or it can't. If it can be profitable than the state might as well be the one operating the business profitably (as they have been recently). Or if it can't, then NH is going to be in trouble leasing it to a failing private entity. Threecy will claim that it's more complicated than that. But it's not. It's only more complicated if you impose unrealistic constraints on both the public and private operational strategies.

In fact, 30 pages ago he claimed that a simplistic business plan is what put the NELSAP areas out of business. Only later on did he claim that State-run operations but them out of business.

 

[threecy]

True Jack, that is pretty hilarious given the anti-government involvement perspective of Threecy's argument.

But more importantly it's just not realistic. Threecy keeps talking out of both sides of his mouth.

Have you ever seen a lease agreement? They're loaded with clauses.

It could be pretty simple - operator must provide X% season pass discount to New Hampshire residents, or $X+inflation season pass discount to New Hampshire residents (the Sunapee base payment, for instance, has an inflation step included), or operator must provide 1 NH resident discount per non-holiday work, or operator must provide X NH resident discount days per season, etc.

 

[Cannonball]

Have you ever seen a lease agreement? They're loaded with clauses.

It could be pretty simple - operator must provide X% season pass discount to New Hampshire residents, or $X+inflation season pass discount to New Hampshire residents (the Sunapee base payment, for instance, has an inflation step included), or operator must provide 1 NH resident discount per non-holiday work, or operator must provide X NH resident discount days per season, etc.

Actually, yes I have originated and developed several public->private lease agreements, private->public land sales, and public/private->nonprofit conservation restrictions. Yes, they are loaded with clauses. BUT they are not one-way as you describe. The lessee needs to have room in the agreement to make a profit or else it simple is untenable. So far you have described a scenario where the private operator would have to operate under basically ALL of the existing Cannon offerings PLUS pay a lease fee and taxes. If the state can't turn a profit under these scenarios then the private operator would certainly suffer a loss under the same income restraints but with a larger operating cost. You just can't have it both ways.

Have you?

 

[jack97]

True Jack, that is pretty hilarious given the anti-government involvement perspective of Threecy's argument.

But more importantly it's just not realistic. Threecy keeps talking out of both sides of his mouth. One side: A private business would find Cannon appealing and profitable. The other side: The State could make them operate just like the state currently does, dictating the discounts, terms, operations, etc. You can't have it both ways.

I go back to my original argument some 30 pages ago.....It boils down to simple economics. This can either be a profitable business or it can't. If it can be profitable than the state might as well be the one operating the business profitably (as they have been recently). Or if it can't, then NH is going to be in trouble leasing it to a failing private entity. Threecy will claim that it's more complicated than that. But it's not. It's only more complicated if you impose unrealistic constraints on both the public and private operational strategies.

In fact, 30 pages ago he claimed that a simplistic business plan is what put the NELSAP areas out of business. Only later on did he claim that State-run operations but them out of business.

yep.... I got a good chuckle myself. Threecy's opinion will not change nor the proponents for privatization.

This issue comes up every now and then, it happened back in 2007 when local business wanted to go private. It's been fun but I have too much on my plate right now.

http://forums.alpinezone.com/showthread.php?t=13881

 

[MadPadraic]

Just because he uses the word "fact" a lot doesn't mean he has, or provides, good facts. I don't feel like re-reading 40 pages. But if I recall, I'm the only one who actually provided some actual published facts and figures, with links to others. Some of us cherry-picked from those facts to support one side. Threecy cherry-picked from them to create an interpretation for his side. But overall I'd say he's heavy on opinion and light on facts.

I direct you to post #62

By the way, when it comes to financials, the Tuck report and a 2008 audit committee report (available on the nh parks page) both make reference to much of the Flume's operating budget (and virtually all of the summer tram's) actually being expensed to the ski area, which overstates their profitability and understates Cannon's. The audit committee, however, doesn't make the last claim, just that the intertwined accounts are a mess.

It would be nice to see updated statements, as the recent profits dwarf the old P&L results. Have expenses gone up just as much, so a bad year would be that much worse, or would it easily be covered by the next good year?

 

[MadPadraic]

So you're saying ski school should be a highly profitable venture for ski areas?

http://biz.yahoo.com/e/110310/mtn10-q.html
You'll see that it is a little under 1/4th the revenue of lift tickets for MTN. Ski school salaries are not broken out, but it does appear to matter. Also, rentals, which are huge, go hand in hand with ski school.

It's surprising, considering how pleasant you've been to me here, that others wouldn't want to join in on the fun.

Well, I would like to snowboard and have a beer with you (preferably at Cannon). :beer:

Factually incorrect. Cannon Mountain Total Attendence (ski area only...figures used when pricing liability insurance) for the years cited:
2009-2010: 103,387
2008-2009: 102,582
2007-2008: 103,885

They did, however, have a significant jump in attendence for 2010-2011, though they also recorded 55% more snowfall than average. FY11 has not been closed or audited yet, though.

Would you please provide us with a link for this? (I don't doubt it, but I want to know what other nuggets are in there).

 

[MadPadraic]

Anyone have an opinion on privatized roadways? Might cost you a $30 toll here and there but it would guarantee the some lease and tax income to the state every year.

I would gladly pay a premium for reduced traffic.

 

[threecy]

Actually, yes I have originated and developed several public->private lease agreements, private->public land sales, and public/private->nonprofit conservation restrictions. Yes, they are loaded with clauses. BUT they are not one-way as you describe. The lessee needs to have room in the agreement to make a profit or else it simple is untenable. So far you have described a scenario where the private operator would have to operate under basically ALL of the existing Cannon offerings PLUS pay a lease fee and taxes. If the state can't turn a profit under these scenarios then the private operator would certainly suffer a loss under the same income restraints but with a larger operating cost. You just can't have it both ways.

Requiring a midweek discount day and a season pass discount, as well as forbidding real estate development, is a ridiculous proposal. I would suggest that firms will still be interested to bid on Cannon, even if the lease is more restrictive than Sunapee.

http://biz.yahoo.com/e/110310/mtn10-q.html
You'll see that it is a little under 1/4th the revenue of lift tickets for MTN. Ski school salaries are not broken out, but it does appear to matter. Also, rentals, which are huge, go hand in hand with ski school.

My question was in regard to profit, not revenue. Also, I should be more specific and say a New England ski school, as western operations tend to differ.

Would you please provide us with a link for this? (I don't doubt it, but I want to know what other nuggets are in there).

http://www.newenglandskihistory.com/NewHampshire/cannonmtn.php

 

[threecy]

By the way, when it comes to financials, the Tuck report and a 2008 audit committee report (available on the nh parks page) both make reference to much of the Flume's operating budget (and virtually all of the summer tram's) actually being expensed to the ski area, which overstates their profitability and understates Cannon's. The audit committee, however, doesn't make the last claim, just that the intertwined accounts are a mess.

The Cannon P&L statement has winter and summer operations broken out.

It would be nice to see updated statements, as the recent profits dwarf the old P&L results. Have expenses gone up just as much, so a bad year would be that much worse, or would it easily be covered by the next good year?

FY11 has not yet closed, so I suspect it could be awhile before audited statements are complete. FY10 is "missing." Expenses have increased every year prior. Snowfall has been significantly higher than average in the referenced four years of operational net income. The last time the ski area recorded below average snowfall, its operating deficit was significant.

 

[riverc0il]

FY11 has not yet closed, so I suspect it could be awhile before audited statements are complete. FY10 is "missing." Expenses have increased every year prior. Snowfall has been significantly higher than average in the referenced four years of operational net income. The last time the ski area recorded below average snowfall, its operating deficit was significant.

Oops, correlation not causation there. A lot of other things have changed at Cannon that could plausibly explain increased revenue besides higher snowfall totals. Increased snowmaking, better grooming, better bar, the addition of new terrain, perhaps better marketing, and a better run operation overall could have all played factors as these have all changed since the last bad snow year. I think I stated this on page one of this thread: it would be a lot easier to make your case if Cannon has a bad financial year during a bad snow year since all the other variables have been changed. Cannon is not the same mountain it was four years ago.