F Killington for closeing early

[mondeo]

That is a very uninformed comment.

All the ski resorts in the ASC portfolio made an operating profit other than The Canyons when they were getting it off the ground. Sugarbush didn't and that's why they unloaded it for next to nothing. They just didn't make enough operating profit to service the gigantic interest payments on those huge 12% loans (junk bonds) Les Otten used to buy all those ski resorts. Before they started spinning off ski areas to pay down the debt, ASC was paying something approaching $100 million in interest every year. The business plan was to use the profits from real estate development to pay down the debt. Unfortunately, ASC sucked at real estate development and quarter share units at Steamboat, The Canyons, and Attitash ended up being auctioned off at fire sale prices. ASC had a finance problem with too much leverage and lousy interest rates, not an operations problem. If Les Otten hadn't retained 51% ownership of ASC when he took it public, he would have raised enough cash in the IPO to solve his debt problem. Greed and hubris killed the company.

Not necessarily arguing here, but how did POWDR finance the purchase of Killington? I'd argue there was an operations problem if they weren't making enough money to cover the loan payments; you can be making a 1% yearly ROI and claim profitability, but that isn't a good operation.

I think another thing people are forgetting is that it isn't just how much it costs to run a resort in May, but how much it costs to make enough snow to legitimately last into May. My bet is one of the big drivers in their initial statement of mid-April closing is their desire to reduce their snowmaking costs. Not being open as long as they have the snow is another issue.

 

[ski_resort_observer]

That is a very uninformed comment.

All the ski resorts in the ASC portfolio made an operating profit other than The Canyons when they were getting it off the ground. Sugarbush didn't and that's why they unloaded it for next to nothing. They just didn't make enough operating profit to service the gigantic interest payments on those huge 12% loans (junk bonds) Les Otten used to buy all those ski resorts. Before they started spinning off ski areas to pay down the debt, ASC was paying something approaching $100 million in interest every year. The business plan was to use the profits from real estate development to pay down the debt. Unfortunately, ASC sucked at real estate development and quarter share units at Steamboat, The Canyons, and Attitash ended up being auctioned off at fire sale prices. ASC had a finance problem with too much leverage and lousy interest rates, not an operations problem. If Les Otten hadn't retained 51% ownership of ASC when he took it public, he would have raised enough cash in the IPO to solve his debt problem. Greed and hubris killed the company.

I have issues with alot of what's in this post but since ASC is toast no sense going into it. I will say that Otten's financing was first a 400m loan from Fleet Bank to basically buy Ski Ltd and when he couldn't service the debt he brought in a private equity firm Oak Hill Partners who invested into ASC for 49% of the company. When the cash flow got tight they were the ones who called in the loans and intiated the resort sell off. Even tho Otten had 51% of the company, Oak Hill had the majority on the BOD.

When ASC went public Otten had 880,000 shares, no where near 51% of the shares. The IPO failed caused as soon as it went public it started heading downhill from the get go. I was an ASC employee at the time and staff had an option to get in at $14, it IPO'd at $18. No one I knew purchased any stock...what a shock.

It did take alot of financial resourses to build The Canyons but their first property, Sun Dial Lodge sold out quickly, it was the next properties that started causing problems. I think Dr Jeff had some firsthand experience with this.

 

[Edd]

They saw the profit they had so far this year and decided that the rest of the year will just be a drain. K sucks anyways who cares.

So true. People get so worked up about this mountain but the appeal of K eludes me. It's the most un-chill resort ever. The vibe there blows.

 

[bigbob]

So true. People get so worked up about this mountain but the appeal of K eludes me. It's the most un-chill resort ever. The vibe there blows.

You should try and ski it midweek, totally different clientele/attitude. Plus it is usually empty.
I live the next town over from you and try and hit it once a week, midweek pass. If you want to hit it next season midweek, PM me and we will share the gas cost, 2 Hr 10 Minute drive. Bob

 

[SkiDork]

What amazes me the most is that people are still talking about it, despite the fact that Powdr disclosed the plans to close early in mi-April last year when they started selling their passes. Perhaps, it's just the reality of it all, but I will bet that we'll hear about it all summer and beyond.

Thats why we have these message boards. Otherwise it would get boring.

 

[JimG.]

The K-chatter is still going strong!

No mountain on Earth gets as much play.