Saddleback 10 year pass for 5K

[salsgang]

I posted this on the sugarloaftoday forum too... the Saddleback website is advertising a 10 year pass for 5k - transferable once is a skiers lifetime.

Looking at 6-7 year return on investment. I personally would want more benefit up front. Ski areas always run the risk of financial difficulties / owners changing hands etc. Maybe some "decade only pass" benefits of some sort - drastically reduced lodging... maybe even shares in the partnership / company...?

Have other resorts tried this in the past? Thoughts?

 

[deadheadskier]

only way I'd do that is if I were retired somewhere. Life changes to often and while I'd like to think I'll be in New England for the next ten years, you never know. I considered, but turned down an attractive promotion to Washington DC this past winter.

 

[threecy]

Have other resorts tried this in the past? Thoughts?

Berkshire East did a similar deal (7 years if I recall) circa 1990. It worked out very well for both the ski area (using the funding to do a major snowmaking project) and the skiers (who received 7 years of season passes at a reduced rate, as well as some other benefits such as a locker and better parking if I recall).

Most of the skiers who took advantage of this deal knew the mountain and the ownership and thus knew their investment was safe.

If you know the folks who own and operate Saddleback (which by posting this I'll infer you don't) and have confidence they'll have a good product for the next decade, then it's probably a good buy. If you're concerned about an ownership change or worse, it may be a bit of a risk.

 

[WWF-VT]

Actual language from the website:

10 years of unlimited skiing or riding at New England's newest favorite mountain! Very limited quantities. We're selling just 50 Decade Passes in connection with Saddleback's 50th anniversary celebration. Passes are transferable once during an owner's lifetime to another family member.

 

[deadheadskier]

interesting that they are limiting it to 50. maybe that's just to make them seem 'special' to try and sell them out. Then sell more 'due to incredible demand'.

ultimately, 250K isn't much capital for a ski area.

 

[bvibert]

interesting that they are limiting it to 50. maybe that's just to make them seem 'special' to try and sell them out. Then sell more 'due to incredible demand'.

ultimately, 250K isn't much capital for a ski area.

I wonder if they'll even sell 50?

 

[Tin Woodsman]

interesting that they are limiting it to 50. maybe that's just to make them seem 'special' to try and sell them out. Then sell more 'due to incredible demand'.

ultimately, 250K isn't much capital for a ski area.

My sentiments exactly. $250K may buy a bit of snowmaking or a groomer (?) but it's not a big number for a resort like Saddleback.

 

[deadheadskier]

I wonder if they'll even sell 50?

probably

I figure tipsdown is good for 4 or 5 :lol:

 

[ta&idaho]

If I had an extra $5000 laying around, I'd buy five shares of stock in the Sherburne Corporation instead.

 

[thetrailboss]

If I had an extra $5000 laying around, I'd buy five shares of stock in the Sherburne Corporation instead.

Ha. Funny. Sherburne hasn't been around for almost 30 years.

SKI has been gone since the mid-90's.

And I hear that ASC stock is a hot commodity these days......

That is of course if you want to see your money go up in LBO's own smoke:

 

[TheBEast]

Better watch out for language around what happens if the area is sold....better make sure those new owners have to honor the pass......K lifetime passholders are stuck with a worthless contract now.

 

[riverc0il]

Could be as much for the marketing as the $250k. And while not much in terms of major improvement, $250k is a really nice shot in the arm for many small projects and fixed costs.

Given how much lift ticket prices have increased in the past 10 years, this is a steal for those that ski at Saddleback regularly. If this offer was for an area I regularly ski, I would be on the phone right now for sure.

 

[jaytrem]

Doesn't seem like a very good deal with the current pass price only being $599. Gotta think you'd do better even with a conservative investment elsewhere.

 

[riverc0il]

Doesn't seem like a very good deal with the current pass price only being $599. Gotta think you'd do better even with a conservative investment elsewhere.

Assuming pass prices stay the same (big if), that is a $1000 return in 10 years assuming consistent pass pricing. You have to imagine that pass prices are going to go up significantly in the next 10 years. Especially at an under valued resort like Saddleback.

 

[JimG.]

Sounds like a great deal.

Too bad I live 8 hours away.

 

[jaytrem]

Assuming pass prices stay the same (big if), that is a $1000 return in 10 years assuming consistent pass pricing. You have to imagine that pass prices are going to go up significantly in the next 10 years. Especially at an under valued resort like Saddleback.

I don't know, if I look at one of my higher dividend stocks AWF. Assuming no increase stock price in value and $25 pass increase each year it looks something like this....

Investment Pre tax Div Post tax Div Pass Cost
4,400.00 401.72 341.46 600.00
4,141.46 378.12 321.40 625.00
3,837.86 350.40 297.84 650.00
3,485.70 318.24 270.51 675.00
3,081.20 281.31 239.12 700.00
2,620.32 239.24 203.35 725.00
2,098.67 191.61 162.87 750.00
1,511.54 138.00 117.30 775.00
853.84 77.96 66.26 800.00
120.10 10.97 9.32 825.00


That ignores state taxes and reinvestments as the year progresses, figure they offset enough. Anyway, it leaves me an extra $120 and I'm still in control of the money. Of course the investment is also a risk, but i would feel better holding onto the money rather than paying it all up front.

 

[snowmonster]

Have other resorts tried this in the past? Thoughts?

Mad River Glen has a 10 year pass for $5300.

 

[Geoff]

Ha. Funny. Sherburne hasn't been around for almost 30 years.

Sherburne Corporation was a corporation until POWDR showed up in 2007. The lease of the state forest land was to the Sherburne Corp. POWDR managed to get the State of Vermont to change the name on the lease... thus making an asset sale possible and screwing a bunch of lifetime pass holders.

 

[bobbutts]

I'd be interested if it were a "lifetime" pass

 

[thetrailboss]

Sherburne Corporation was a corporation until POWDR showed up in 2007. The lease of the state forest land was to the Sherburne Corp. POWDR managed to get the State of Vermont to change the name on the lease... thus making an asset sale possible and screwing a bunch of lifetime pass holders.

That's not the case. I reviewed my copy of:

And that confirmed my understanding of the situation. The Sherburne Corporation existed from the 1950's through 1985. In November 1984, Smith and the officers and directors of Sherburne founded S-K-I, a Delaware Corporation that was to be listed on the NASDAQ. (Lorentz 144). During a brief period between that time and February 1985 Sherburne Corporation was a wholly owned subsidiary of S-K-I. In February 1985 Sherburne Corporation became Killington, Ltd. which was a wholly owned subsidiary of S-K-I. (Lorentz 144).

Sherburne Corporation did not exist in name, but was changed through a stock swap, so that those who held shares in Sherburne Corporation surrendered those certificates and got S-K-I stock certificates in the 1985 S-K-I offering. (Lorentz 1990 Edition, 39).

Technically, Sherburne Corporation as a name and in that form changed in 1985 to Killington Ltd. which was owned by S-K-I. So the "entity" did not die...it continued on under a new name.

When Les Otten and his LBO Enterprises came onto the scene, he, like POWDR, had two options: he could have bought the "assets" of S-K-I, which are the lifts, lodges, and the "things" that make the ski areas operate without the "behind the scenes" corporate "stuff," including the corporation's officers, debt, liabilities, etc; alternatively he could simply by all the stock of the corporation and take over everything: the assets and the corporate "stuff" including the debts, liabilities, etc. LBO did the latter for whatever reason: he made an offer in early 1996 to pay the shareholders $18 cash for each share. The board reviewed and accepted the offer. S-K-I folks got their cash and got out; LBO got S-K-I, Inc. (Lorentz 255).

For a period of time LBO owned his resorts privately. In late 1997 that changed when he decided to make his American Skiing Company a public corporation and sell shares to the public for $17-20 per share. (Lorentz 293). Remember that at that time ASC owned what was S-K-I, which was more than just Killington, as well as LBO's other resorts and later aquisitions.

We know what happened to ASC: it failed. In 2007 they were on the hook for a large payment to one of the big institutional investors. They needed cash. Again, ASC could have done one of two things: try to get a buyer for EVERYTHING ASC had, which was a lot of assets and a lot of debt and liability. Nobody would buy that obviously. So they did the only thing they could: they sold their assets, collected whatever cash they could, paid off whoever they could, and folded.

POWDR, and SP Lands, combined to create a new, different, and distinct corporate entity named Killington-Pico Ski Partners (or something like that). That entity bought the assets of Killington, Ltd. in 2007, (the former Sherburne Corporation and the entity that S-K-I used to "hold" Killington). Killington Ltd. got the cash, sent it to ASC, ASC paid off what debts it could for Killington Ltd. and itself and is no more.

POWDR and SP Lands, through their entity, run Killington-Pico now. Yes they used some of the old management; yes, there are some old staff; but it is a new being. It is different than Sherburne -> Killington Ltd./S-K-I -> LBO/ASC. That "thing" died.

POWDR/SP Lands, in the deal, chose only to buy the assets of Killington Ltd. This DID NOT include the liabilities or debt: the passes were counted as "liabilities" because they were promises made by Sherburne, which transformed into S-K-I, and that was transformed into ASC. POWDR/SP did not buy ASC; they bought Killington Resort. Chairlifts, groomers, snowmaking equipment, buildings, and real estate cannot "grant" lifetime passes: the corporate/business entity that operates those things to "make" a ski resort business can. That's what happened here.

And as to the lease with the state there was an accusation that the transfer by the state "was a sham." Of course not. The lease was held by Killington, Ltd. and it was an "asset" of that corporation. POWDR/SP bought the lease as an "asset" from Killington Ltd./ASC and the state was instructed by its tenant to transfer the lease to the new corporation that would by he assets and run a "new" ski business. This was not some scam; it is just how transactions work.

Sorry again that your side lost at this stage. It does not sound as if there was any wrongdoing at all.