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Saddleback Mountain Cooperative - Information Thread & Survey

joshua segal

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Very sad to see the future of Saddleback come down to this. I wish you luck.

Sad? No. Realistic? Yes.

Consider the Berrys put $40M into the ski area, including $6M into the base lodge - and after all of that effort and investment, the area is worth less than the cost of the lodge. Anyone looking at a big picture of skier visits and the stagnation of the industry would realize that Saddleback is less than an investment-quality investment.

Whereas as a co-op, Saddleback should be able to operate stably and in the black on 80 to 100K skier visits.

Times have changed:
1. There is huge competition for the winter sports dollar
2. The feeder hills for the big areas have disappeared
3. Since the mid-80s trickle-down economics, the middle-class has been slowly disappearing and young people don't have the money for an expensive sport like skiing.

For skiing to survive, a new paradigm is needed. MRG proved that the co-op model can work. They were ahead of the times. It will be interesting to see how Saddleback does, but IMO, in the absence of an angel, the co-op root is their best chance.
 

mbedle

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Joshua - what makes you think that a co-op can operate saddleback in the black on 80 - 100K skier visits, when the Berries couldn't? I am pretty sure that Berry family members have loaned money to keep the resort open over the the past couple of years. MRG has a couple of things going for it that Saddleback does not. They have a very unique marketing campaign (skiers only and the single chair, are located closer to more metropolitan areas and are also a non-profit). They also have a significantly larger resort 15 minutes down the road that most likely feeds them some skiers. They rely on donations and volunteer work days to maintain and operate the resort. If MRG actually had to pay to refurbish the single chair, it never would have happened. There is nothing wrong with that business model and it has worked for the past 20 years. Saddleback, unfortunately, doesn't have those all those things going for it. I don't want to see this place stay closed, but can't grasp how a co-op is going to turn this business around.
 

Newpylong

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Sad? No. Realistic? Yes.

Consider the Berrys put $40M into the ski area, including $6M into the base lodge - and after all of that effort and investment, the area is worth less than the cost of the lodge. Anyone looking at a big picture of skier visits and the stagnation of the industry would realize that Saddleback is less than an investment-quality investment.

Whereas as a co-op, Saddleback should be able to operate stably and in the black on 80 to 100K skier visits.

Times have changed:
1. There is huge competition for the winter sports dollar
2. The feeder hills for the big areas have disappeared
3. Since the mid-80s trickle-down economics, the middle-class has been slowly disappearing and young people don't have the money for an expensive sport like skiing.

For skiing to survive, a new paradigm is needed. MRG proved that the co-op model can work. They were ahead of the times. It will be interesting to see how Saddleback does, but IMO, in the absence of an angel, the co-op root is their best chance.

Even with what little I know about SB I think it is highly unlikely they will operate in the black. I would expect continued investment/subsidies by shareholders yearly for operations. That is, unless operational costs are reduced substantially ie minimal to no snowmaking.

Feeder hills are getting stronger after a steady decline since the early 90s. People are seeing the value of local community run hills and the big boys are supportive in general of them.
 

joshua segal

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To mbedie: You ask, "what makes you think that a co-op can operate saddleback in the black on 80 - 100K skier visits ...". Simply, skiing ops (according to data I saw) were in the black 3 of the last 4 seasons they operated with typical skier-visit days averaging 90K per year. Also, keep in mind that a not-for-profit does not have to provide investment-grade returns. Keep in mind: ASC skiing operations were profitable. What killed them was the cost of servicing their debt.

To newpylong: You said, "Feeder hills are getting stronger after a steady decline since the early 90s. People are seeing the value of local community run hills and the big boys are supportive in general of them." The decline of feeder hills started in the 70s. (Check http://nelsap.org). The kinds of feeder hills I'm talking about are the ones that are within an hour of a major city. I can't think of a single new one in the last 30 years!
 

xwhaler

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Massive difference between SB and MRG in the co op operating model is the owned land. MRG can't do anything to add revenue beyond the ski area boundary. SB co op model will be acquiring lots of land with which to develop/sell off (housing development and/or timber $)
 

joshua segal

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Massive difference between SB and MRG in the co op operating model is the owned land. MRG can't do anything to add revenue beyond the ski area boundary. SB co op model will be acquiring lots of land with which to develop/sell off (housing development and/or timber $)
The plan is quite complete and I still do not know how much of the plan is public, but xwhaler is right on with this.
 

deadheadskier

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Honest question. If the ski area can be profitable at 80k-100k visits, why didn't the Berry's use the plan in the past?
 

mbedle

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Joshua - sorry, I wasn't aware that this place was making money. My understanding was that family members in the past couple of years had to loan money to the owners to keep the place going. I think when I did the math, based on deed records, it was around a million. I think they also had to sell off some land to get some cash, but not sure when that happened. It is also odd, because if they had made money 3 out of 4 last season, you would think they would have been able to obtain financing to replace the lift. And why would anyone shut down a business that is making money? As far as ASC, what do they have to do with Saddleback?
 

MEtoVTSkier

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If it was profitable, then I'm sure somewhere along the line, financing for a replacing the double would have been available. Obviously, no one was willing to take a chance on them, and that is very telling. If they were constantly infusing more money to stay afloat, then I wouldn't finance the lift either.
 

machski

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Joshua - sorry, I wasn't aware that this place was making money. My understanding was that family members in the past couple of years had to loan money to the owners to keep the place going. I think when I did the math, based on deed records, it was around a million. I think they also had to sell off some land to get some cash, but not sure when that happened. It is also odd, because if they had made money 3 out of 4 last season, you would think they would have been able to obtain financing to replace the lift. And why would anyone shut down a business that is making money? As far as ASC, what do they have to do with Saddleback?

You all need to pay attention. The "Operation" was profitable but the company was not. What's the difference? If you are just operating the mountain, you can make money. Where the company was bleeding money was on the servicing of the debt for new lifts/lodge/snowmaking. If you are free of the debt and just plan to operate what is there when you buy, that can be profitable if not bought on debt.
 

Jully

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You all need to pay attention. The "Operation" was profitable but the company was not. What's the difference? If you are just operating the mountain, you can make money. Where the company was bleeding money was on the servicing of the debt for new lifts/lodge/snowmaking. If you are free of the debt and just plan to operate what is there when you buy, that can be profitable if not bought on debt.

Basically the costs of running the ski area worked out, but operations couldn't support the tens of millions of improvements the Berry's put into the place? Lose that debt and a 90k skier vists/year saddleback works. I could see that.

My only thought though, is why didn't buyers want it then?
 

xwhaler

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You all need to pay attention. The "Operation" was profitable but the company was not. What's the difference? If you are just operating the mountain, you can make money. Where the company was bleeding money was on the servicing of the debt for new lifts/lodge/snowmaking. If you are free of the debt and just plan to operate what is there when you buy, that can be profitable if not bought on debt.

This has been the most logical/accurate post in weeks on this topic. Well said
 

salsgang

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This has been the most logical/accurate post in weeks on this topic. Well said

Agreed - I think the debt servicing is the killer for the Berry's. If anyone is in the Portland Maine area tonight there is a meeting about the co-op 7pm at Gorham ski and bike 693 Congress Street Portland. The co-op organizers will present the plan and answer questions.
 

yeggous

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To mbedie: You ask, "what makes you think that a co-op can operate saddleback in the black on 80 - 100K skier visits ...". Simply, skiing ops (according to data I saw) were in the black 3 of the last 4 seasons they operated with typical skier-visit days averaging 90K per year. Also, keep in mind that a not-for-profit does not have to provide investment-grade returns. Keep in mind: ASC skiing operations were profitable. What killed them was the cost of servicing their debt.

To newpylong: You said, "Feeder hills are getting stronger after a steady decline since the early 90s. People are seeing the value of local community run hills and the big boys are supportive in general of them." The decline of feeder hills started in the 70s. (Check http://nelsap.org). The kinds of feeder hills I'm talking about are the ones that are within an hour of a major city. I can't think of a single new one in the last 30 years!

Crotched is a new feeder hill.


Sent from my iPhone using AlpineZone mobile app
 

Quietman

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Today Crotched is, and it is still struggling to find its niche. Interesting to see how it fares under Peaks master plan while pissing off some locals (like me) to be a part of a cog in a big wheel. Will it be the choice of more that face weekend blackouts at the bigger Peaks areas, or will it suffer as the smallest cog in the northeast wheel? Sad thing is that mountains of this size and snowmaking firepower are now the "feeder" hills while so many great local hills remain only in peoples memories and are some times documented on NELSAP. So sad that Ascutney is now gone(with Crotched cherry picking the HS quad), and great areas like Saddleback, Magic and Burke are on the bubble. Heck, even Mt Abram, Black of ME and so many others are hanging on by a thread. People like to chime in about keeping Magic and MRG alive, while there are a lot of other worthy mountains that are also struggling. We need to teach our kids to ski, and our ski areas need to accommodate families and never evers with cheap rates to encourage new skiers or things will go down hill rapidly, and not in a good way.
 

joshua segal

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Crotched is a new feeder hill.
Totally disagree. My definition of a feeder hill is a cheap place where kids can hang out after school with pretty minimal minimal vertical (under 500'), pretty minimal lifts, pretty minimal price and pretty limited amenities. There are still a dozen or so in New England, but in the greater Boston region, even Nashoba Valley and the Blue Hills have too many amenities and chairlifts to be a feeder hill the way the 50 or so feeder hills(listed in http:/nelsap.org/ma/ma.html) in Eastern MA used to be.
 

joshua segal

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Today Crotched is, and it is still struggling to find its niche. Interesting to see how it fares under Peaks master plan while pissing off some locals (like me) to be a part of a cog in a big wheel. Will it be the choice of more that face weekend blackouts at the bigger Peaks areas, or will it suffer as the smallest cog in the northeast wheel? Sad thing is that mountains of this size and snowmaking firepower are now the "feeder" hills while so many great local hills remain only in peoples memories and are some times documented on NELSAP. So sad that Ascutney is now gone(with Crotched cherry picking the HS quad), and great areas like Saddleback, Magic and Burke are on the bubble. Heck, even Mt Abram, Black of ME and so many others are hanging on by a thread. People like to chime in about keeping Magic and MRG alive, while there are a lot of other worthy mountains that are also struggling. We need to teach our kids to ski, and our ski areas need to accommodate families and never evers with cheap rates to encourage new skiers or things will go down hill rapidly, and not in a good way.
I disagree that CM is trying to find its niche. It has a similar market to Pats Peak whom I would consider to be its main competitor.

While a few locals may be a little annoyed with Peak, the bundling of season passes has been very successful with most of the major players in the industry and a lot more people like the bundling than not.
 
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