13 replies to this topic

[tahoeistruckin]

http://www.parkrecor...ines/ci_5316026

[Shawn]

This should be interesting....I'm sure that he will pop up again soon, As Roman Maroni would say " He is a fargin sneaky bastage!"

[lastchair_44]

fargen icehole?
that isn't directed at Les Otten himself... I just wanted to throw that quote out there as well.... that movie cracks me up!

[Nordo]

a truly fine day for the ski world.

[liftmech]

I suspect we won't see ASC much longer. They sold five of eight resorts, then the founder and director steps down?

[garthd]

I'd say the whole corporate, publicly-traded ski industry is going downhill (pun intended). Intrawest was bought up by Fortress, ASC is death-spiraling apart (long overdue). Only Vail Resorts seems stable.

I believe that the death of publicly-traded skiing companies can mean very good things for the ski industry as a whole. The ongoing war between these companies has resulted in the disappearance and sever marginalization of the small ski area. It has meant that everyone has to have things like: high-speed, detachable lifts, terrain parks upon terrain parks, lodging options right on the trail, and my least favorite contribution, the base village.

The way the ski industry has operated in the recent past has lead to a continuing push for higher returns every quarter. It has not been a healthy growth for the ski industry and I hope that this changes things.

Edit: By the way, I realize the irony that I work for Vail Resorts.

This post has been edited by garthd: 02 March 2007 - 08:31 AM

[Peter]

Except Fortress went public soon after on February 8th. It is listed on the New York Stock Exchange, symbol FIG

[garthd]

Skier, on Mar 2 2007, 08:13 PM, said:

Except Fortress went public soon after on February 8th. It is listed on the New York Stock Exchange, symbol FIG

Whoops...my bad. Not enough research before I posted. I still stand by my post.

[random_ski_guy]

garthd, on Mar 3 2007, 10:27 AM, said:

Whoops...my bad. Not enough research before I posted. I still stand by my post.

I think the ongoing war between these companies, the situation as you have described it, will continue whether or not they are private or public companies. It might cool down a couple notches, but its still there.

I find that it is a rare situation in business where you can do nothing year after year (not add lifts, lodging and real estate) and not loose money in the long run...a lot of money. Mtns compete on these fronts for near term profits which support long term survival.

And while there are no public companies that willingly lose money or work to merely breakeven, there are only a few (not hundreds) of private owners that would be willing to do the same too. Something tells me the new owners at Steamboat will be looking for serious profits given what they are paying. Same with "SP Land Company" at Killington.

Public or private, ASC in either form had a poorly conceived business plan for a ski conglomerate. Otten grossly overpaid for Killington, Mt Snow, Steamboat and Heavenly. He saddled himself with a boatload of debt that was never going be repaid without perfect success in their timeshare program and appreciable growth in skier visits. Public or private, either way it was a bad plan and poor management that sank the ASC boat. I have to acknowledge, ASC survived a good 6 years longer than I ever anticipated. I give credit to the current team, if I needed to squeeze a gallon of lemonade from a single lemon, I'd look to them. Ever year they squeezed just enough cash out of those mtns to repay all that junk debt. Always, seemingly, just days and pennies away from the bankers forcing a liquidation.

As for VAIL, all their holdings are absolute gems. They are not an anomaly with respect to capitalization method, just a well run organization. Intrawest, for that matter, was also well run, regardless of what pirate capital had to say. Pirate capital just took advantage of their thinly followed stock and underappreciation.

This post has been edited by random_ski_guy: 03 March 2007 - 02:15 PM

[garthd]

I guess what I was trying to say in regards to profits is that it seems like stockholders and Wall Street expect X this quarter 2X next quarter, 2(2X) the next quarter, etc. I just generally feel like the big three have committed to grow in an unsustainable fashion. I probably dont' have enough experience to be talking about this...

[cookiepuss]

"Otten grossly overpaid for Killington, Mt Snow, Steamboat and Heavenly. He saddled himself with a boatload of debt that was never going be repaid"

I think that ASC was eventually able to repay their "boatload" of debt with the sale of the resorts last month. All the while Otten and his buddies were making $'s.

"a bad plan and poor management that sank the ASC boat."

The "boat" might have sank but the captains seem to still be floating high !!!

[andyh1962]

cookiepuss, on Mar 8 2007, 06:13 PM, said:

"Otten grossly overpaid for Killington, Mt Snow, Steamboat and Heavenly. He saddled himself with a boatload of debt that was never going be repaid"

I think that ASC was eventually able to repay their "boatload" of debt with the sale of the resorts last month. All the while Otten and his buddies were making $'s.

"a bad plan and poor management that sank the ASC boat."

The "boat" might have sank but the captains seem to still be floating high !!!

Silly Rabbit Trix are for kids. see http://en.wikipedia....iki/Trix_Rabbit

The point of business is to make money. Make money for who you say? For the shareholders? Ya right. In the real world the big guns create a corporation and use that corporation to buy assets (ski resorts) . They use other people's money (banks and the stock market) to buy the assets. The big guns hire themselves to manage those assets on behalf of the shareholders. As long as everyone gets a piece of the pie (or the cereal bowl in Trix land), everyone is happy. The banks could not care less how much debt a company has as long as the interest gets paid. In the case of ASC the company manager's bought a bunch of big ski resorts that could produce reliable cash flow, put some debt against the assets and gave everyone (shareholders, banks, ski resort property holders (buyers and sellers), and the skiing public exactly what they asked for, for an extended period of time, then when they were ready to retire (after paying themselves fat salaries along the way), the big guns sold the assets of the company, paid back the banks for the use of the money and went on their merry way. You live in a land of fairy tales and silly rabbits if you think this was not planned from the beginning. No crime was committed here, the banks got there money back. So did most of the shareholders if you were lucky to own during the right period of time. Worked for Otten at ASC. Worked also for the big guns at Intrawest. (Don't believe this little scenero, check the ages of the big guns at the top that created these monster companies and check the ages of the guys at the top when the companies were sold (retirement age). Gee I wish I could copy this performance.

This post has been edited by andyh1962: 08 March 2007 - 06:39 PM

[random_ski_guy]

andyh1962, on Mar 8 2007, 06:34 PM, said:

Silly Rabbit Trix are for kids. see http://en.wikipedia....iki/Trix_Rabbit

The point of business is to make money. Make money for who you say? For the shareholders? Ya right. In the real world the big guns create a corporation and use that corporation to buy assets (ski resorts) . They use other people's money (banks and the stock market) to buy the assets. The big guns hire themselves to manage those assets on behalf of the shareholders. As long as everyone gets a piece of the pie (or the cereal bowl in Trix land), everyone is happy. The banks could not care less how much debt a company has as long as the interest gets paid. In the case of ASC the company manager's bought a bunch of big ski resorts that could produce reliable cash flow, put some debt against the assets and gave everyone (shareholders, banks, ski resort property holders (buyers and sellers), and the skiing public exactly what they asked for, for an extended period of time, then when they were ready to retire (after paying themselves fat salaries along the way), the big guns sold the assets of the company, paid back the banks for the use of the money and went on their merry way. You live in a land of fairy tales and silly rabbits if you think this was not planned from the beginning. No crime was committed here, the banks got there money back. So did most of the shareholders if you were lucky to own during the right period of time. Worked for Otten at ASC. Worked also for the big guns at Intrawest. (Don't believe this little scenero, check the ages of the big guns at the top that created these monster companies and check the ages of the guys at the top when the companies were sold (retirement age). Gee I wish I could copy this performance.

Yikes, you have several holes in your theories. I'll start with this, who made out with the $200M+ stock issuance? Answer, nobody. The original stockholders (mostly institutional money [mutual funds, pension funds, etc]) never much more than a nickel as the stock traded down from practically the day after it went public. Equity underwriters would be out of business in just a few short strokes if they pulled this stunt several times a year. I don't have any figures handy, but its a good bet that ASC was one of the worst performing new stock issuances in the year it was issued, maybe the worst. The way public business make money is by pumping up their stock price. That is done by achieveing high growth or sustainable income. ASC never made a dime, instead it lost tons of money. Yes it had reliable cash flow, but it ever bit of it was used to repay lenders, not line Otten's pockets.

With the stock down, the timeshare product floundering (lousy product, poor execution) and the shareholders realizing the company was up to its neck in debt, Otten was forced out and Oak Hill stepped in as the savior. Oak Hill floated a huge convertible bond issue in which they were granted control of the board. The Oak Hill funds were used to partially repay Textron and Fleet. If Oak Hill didn't come in as a white knight, ASC would have died back in the late 1990s, shortly after its birth. Textron and Fleet bank would have started foureclosure proceedings. With Otten out, relegated to a non paying board position, how does he become a fat cat in this picture? The man just made a enormous blunder which cost him control of his company? He went from having a stake in a seven (?) mtn chain to taking a backseat to all the lenders. That couldn't have been his plan from the beginning, to build a business and then let the banks step in to suck out all the cash flow while you sit in the corner with a dunce cap on. Sitting on the sidelines Otten no longer got a salary (if he did as a consultant, it wouldn't be much) and his interest in the company in the form of the publically traded stock is in the toilet. Unless Otten owned Fleet, Textron or Oak Hill, I don't think he got jacksh1t. His real objective when ASC went public was to make money and build shareholder appreciation which would have increased his own personal wealth tremendously. And to stay in control if the company were ever liquidated so that these windfall profits could somehow benefit him. Can't see how he's benefitting now.

Yes, things have turned out very nicely for Oak Hill. But I don't think Oak Hill in the darkest days in few years ago could ever have dreamed of the sales prices they are getting now for the mtns. These new owners are making the same mistake, but they get to make the same mistake with much cheaper money (thank you low interest rates).

[andyh1962]

random_ski_guy, on Mar 9 2007, 12:24 AM, said:

Yikes, you have several holes in your theories. I'll start with this, who made out with the $200M+ stock issuance? Answer, nobody. The original stockholders (mostly institutional money [mutual funds, pension funds, etc]) never much more than a nickel as the stock traded down from practically the day after it went public. Equity underwriters would be out of business in just a few short strokes if they pulled this stunt several times a year. I don't have any figures handy, but its a good bet that ASC was one of the worst performing new stock issuances in the year it was issued, maybe the worst. The way public business make money is by pumping up their stock price. That is done by achieveing high growth or sustainable income. ASC never made a dime, instead it lost tons of money. Yes it had reliable cash flow, but it ever bit of it was used to repay lenders, not line Otten's pockets.

With the stock down, the timeshare product floundering (lousy product, poor execution) and the shareholders realizing the company was up to its neck in debt, Otten was forced out and Oak Hill stepped in as the savior. Oak Hill floated a huge convertible bond issue in which they were granted control of the board. The Oak Hill funds were used to partially repay Textron and Fleet. If Oak Hill didn't come in as a white knight, ASC would have died back in the late 1990s, shortly after its birth. Textron and Fleet bank would have started foureclosure proceedings. With Otten out, relegated to a non paying board position, how does he become a fat cat in this picture? The man just made a enormous blunder which cost him control of his company? He went from having a stake in a seven (?) mtn chain to taking a backseat to all the lenders. That couldn't have been his plan from the beginning, to build a business and then let the banks step in to suck out all the cash flow while you sit in the corner with a dunce cap on. Sitting on the sidelines Otten no longer got a salary (if he did as a consultant, it wouldn't be much) and his interest in the company in the form of the publically traded stock is in the toilet. Unless Otten owned Fleet, Textron or Oak Hill, I don't think he got jacksh1t. His real objective when ASC went public was to make money and build shareholder appreciation which would have increased his own personal wealth tremendously. And to stay in control if the company were ever liquidated so that these windfall profits could somehow benefit him. Can't see how he's benefitting now.

Yes, things have turned out very nicely for Oak Hill. But I don't think Oak Hill in the darkest days in few years ago could ever have dreamed of the sales prices they are getting now for the mtns. These new owners are making the same mistake, but they get to make the same mistake with much cheaper money (thank you low interest rates).

You are right of course. I wrote the 'silly rabbit" piece because I am not close enough to the details of ASC to make certain specific statements without getting my ass sued for slander. I am close to a situation in Canada where the "big guns" did exactly what OTTEN did and also "got away with it" (not in the ski industry). My piece was supposed to trigger some thinking. Truely great business leaders go to the stock market ( or the banks) , get money, plan and execute a series of financial moves that make money for everyone including themselves and the original underwriting stockholders, pay the staff fair salaries while doing so and sell the company for a profit when they retire. Utopia? maybe. can be done. does get done every day in America and in Canada. Unfortunately when you or I walk into a job interview it is hard to tell the truely great companies from the bad ones. Yes I agree Otten was not a great leader. He screwed up somewhere along the line.. Glad to see he is gone. I hope the new shareholders of the ASC resorts do not lose their shirts the way the first shareholders of ASC did.

Thanks for the counter argument. needed to be said. I just was not close enough to the details to be the one to say it.

This post has been edited by andyh1962: 09 March 2007 - 03:56 AM