Les Otten resigns from ASC's Board of Directors

[drjeff]

Check this out.

http://biz.yahoo.com/bw/070226/20070226005966.html?.v=1

Could the next ASC resort sale announcement be far behind???

 

[snowmonster]

Perhaps in preparation for negotiations for the sale of Sunday River.

 

[thetrailboss]

Perhaps in preparation for negotiations for the sale of Sunday River.

My thoughts as well....

 

[ctenidae]

Pretty sure that was why he recused himself last week. It'd be interesting to see what he does. Again.

 

[thetrailboss]

May be some truth to this speculation. In the latest Boston Globe article that appeared on the NELSAP board, one finds:

So given the value of the properties, it must occur to Otten that the ASC he envisioned is far from a doomed idea. And that's important in light of the hottest rumor in the New England industry: That Otten, who is prepared to disengage from ASC, and former Sugarloaf CEO Warren Cook will partner in an attempt to once again take over Sugarloaf and onetime ASC flagship Sunday River in Bethel -- the two remaining eastern properties in the ASC fold.

.....

And two well-known players -- Otten and Cook -- are still looking for a way back in to the ski areas they know well.

SOURCE.

Another interesting quote:

Without getting into an in-depth financial analysis of what happened to ASC during the Otten years, it's worth noting that many of the properties now turning over are selling for about double the purchase price -- proof to ASC president B.J. Fair of the company's sound management practices in the post-Otten years.

 

[ctenidae]

Is it sound management practices, or just inflation? I'm going to go with inflation for $100, Alex. If the management practices were so good, why are they selling?

Okay, maybe the management of individual mountains is good (a point I'm not prepared to argue0, but the finaincial mangement overall is reminiscent of 6 year olds with a lemonade stand.

 

[haines]

I predicted his ousting!

This guy had a little problem with ADD, ADHD. Didn't quite like finishing the job. Is the giant base lodge a the K even done yet! He moved headquarters out to Canyons? Before the ink dried on one deal he was into another. The thing that bugged me is during Killingtons (Free Agent year) 1996 the Mtn was at it's peak all 250 runs were open, old sckool lifts to ride. Then the Mtn Butcher got busy and cut the snow making in half, dropping staff. etc.

He was into the Red Sox for awhile

 

[ctenidae]

Not really an "ousting" when you voluntarily resign from the board so that you can negotiate the purchase of some of the company's assets.

Otten didn't have anything directly to do with moving the headquarters to the Canyons, and though he was on the board, I'm pretty sure he didn't have much in the way to day-to-day control over snowmaking, etc.

 

[haines]

Les Otten "The Mtn Butcher"

Not really an "ousting" when you voluntarily resign from the board so that you can negotiate the purchase of some of the company's assets.

Otten didn't have anything directly to do with moving the headquarters to the Canyons, and though he was on the board, I'm pretty sure he didn't have much in the way to day-to-day control over snowmaking, etc.

He was to busy playing in senior baseball league with Bill Lee

In business term voluntary resignation means

"ousted"

 

[ctenidae]

In business term voluntary resignation means

"ousted"

Unless you're negotiating to buy some of the company's assets. In which case it's voluntary resignation.

 

[Goblin84]

hehe, dont worry...we all know haines is a real big fan of Les. He does nothing but go on and on about how wonderful he is

just jokin around boss

 

[MarkC]

This is good news for Maine skiiers. What improvements do you think are in store for SR?

 

[downhill04]

This is good news for Maine skiiers. What improvements do you think are in store for SR?

Not sure where Les stands financially but if history repeats itself we could see in the first few years,
Several new lifts
Lodge improvements
New resort hotels
New fleet of state of the art groomers

Then a few years down the road, you will see of a mountain getting run down as he can barely afford to pay the interest on his lines of credit.

To be fair, I am a big fan of the high speed lifts he was installing left and right in the late 90’s. Sitting on a fixed grip chair is like sitting in traffic.

 

[riverc0il]

Another interesting quote:

Quote:
Without getting into an in-depth financial analysis of what happened to ASC during the Otten years, it's worth noting that many of the properties now turning over are selling for about double the purchase price -- proof to ASC president B.J. Fair of the company's sound management practices in the post-Otten years.

that is misleading and i HATE top corporate officials spinning stuff with BS numbers. of course it would sell for so much higher. infrastructure improvements, real estate price increases, inflation, increasing value, etc. BJ Fair points to "sound management policies" in the post Otten years? Otten handed ASC a raw deal, but if the management policies were so sound, how come ASC needs to unload over half of their properties to remain financially stable?

 

[TroutBum]

that is misleading and i HATE top corporate officials spinning stuff with BS numbers. of course it would sell for so much higher. infrastructure improvements, real estate price increases, inflation, increasing value, etc. BJ Fair points to "sound management policies" in the post Otten years? Otten handed ASC a raw deal, but if the management policies were so sound, how come ASC needs to unload over half of their properties to remain financially stable?

To answer the questions, I'd say because of the drop in home values across the country, and the fact that people are not spending on second homes at the clip they were when ASC was cobbled together. Combine that with a couple of bad operating winters, and you see a very good management practice: avoidance of the sunk cost conundrum. 'we've already thrown this much good money at it, it'll turn around at some point. we HAVE to continue' is a doomed strategy.

Sound management says: We tried, we're moving on. Breaking up Les' untenable venture was bound to happen. Basically, management selling the properties is their way of saying 'we think we can make more money by wisely investing the cash we'll receive from divesting ourselves of these burdensome 'assets' (or liabilities).

With the capital involved, it's trying to turn an aircraft carrier on a dime. Les bought high and has screwed his investors. Untangling his mess is a very difficult challenge. 'Sound Management Policies' involve wrangling the mess into something manageable and profitable. That's what they're trying to do for their investors. Don't underestimate how costly and difficult it is to undo this mess. Sound management means making tough decisions.

Read up on the whole Red Sox sale to Henry & Co to find out more about Les. He's a businessman who always seems to marginalize himself from his partners... 'Loafers and River-rats beware his re-entering ownership of your hill(s). Next think you know, Flying Monkey and the rest of Oz will be sold for condo development....

 

[riverc0il]

that explains the short term turn around of ASC, which i agree is good business for the share holders (and i would argue for the mountains they are unloading). A41 Pass Holders seem like the only group negatively effected by recent ASC adjustments trying to clean up the mess. but the mess had been there since mr. otten was no longer at the head of the organization, these are business decisions that should have been made years ago (if you are arguing on behalf of the shareholders) instead of letting a stock get delisted before taking big steps towards improvement.

 

[TroutBum]

that explains the short term turn around of ASC, which i agree is good business for the share holders (and i would argue for the mountains they are unloading). A41 Pass Holders seem like the only group negatively effected by recent ASC adjustments trying to clean up the mess. but the mess had been there since mr. otten was no longer at the head of the organization, these are business decisions that should have been made years ago (if you are arguing on behalf of the shareholders) instead of letting a stock get delisted before taking big steps towards improvement.

Agreed... but the market/investors all had ridiculous expectations at the time (and it was hardly just in the ski industry... ahhh, the tech world.. in both cases the investors never should've bought the bill of goods they were being offered, but hype was hype, and the entire market overheated...

As far as the all-4-1 passes, I see what you mean... but I don't think any of the sales have *closed* during a season, have they? (That is, you'll likely get the value from the pass for the current season, but won't be able to renew, right?) Is that a multiyear pass?

 

[riverc0il]

i ain't crying about the A41 those pass holders are getting their full moneys worth this season but will not have the option next year.

 

[sledhaulingmedic]

i ain't crying about the A41 those pass holders are getting their full moneys worth this season but will not have the option next year.

I'm not crying, however, I will miss having the option. It was a great deal, for those who could take advantage of it. I don't know if I'll buy a pass next season or not. I can always go to the midweek option.