It’s a Mad, Mad, Mad, Mad Olympic World
Here’s some of the “stuff” that’s happening in the bizarre world of Olympic sports and specifically of the Salt Lake City Organizing Committee (SLOC). Remember the scandal exposing bribes, kickbacks and the like? Well, in Moscow on July 16th, the front runner in a five-person race to succeed the haughty (call me “Excellency”) Samaranch as IOC president is Kim Un-yong, the very same who received a “most serious warning” during the scandal. If elected, he would preside over the February 8 opening ceremony of the Salt Lake City Olympics. Meanwhile, on that same July 16th, the trial of former SLOC executives Tom Welch and Dave Johnson begins. They are charged, inter alia, with conspiring to commit bribery, mail fraud and wire fraud. Such a great buildup just 30 short weeks from opening ceremonies in Salt Lake! As if that weren’t bad enough, Welch has indicated he will tell all to Mike Wallace on 60 Minutes, which can be counted on to air when Olympic interest starts to build. Even before this nightmarish scenario started to unfold, the hard-pressed SLOC plaintively conceded that sales of $50 sponsored bricks for an Olympic plaza are running far behind expectations. An AP report suggests it’s a sign of falling public support for next year’s Winter Games. So far, some 11,000 have been sold—190,000 fewer than in Atlanta for a similar project at the 1990 Summer Games.
Is it any wonder that ski resorts in the Tahoe region expressed a resounding “No Way!” to proposals floated by Reno/Tahoe businesspeople and municipal officials to bid for the Winter Olympics of 2014 or 2018?
The Boston Red Sox Connection
The controlling 53 percent of the Boston Red Sox is up for grabs and among the eight approved suitors are no less than two figures associated with the ski world. First is Les Otten of Sunday River-plus renown, who is partnered in his bid with television producer and one-time managing partner of the Padres, Tom Warner. Les, ironically a lifelong Yankees fan, would keep the Sox playing in Fenway Park. The other suitor with a ski connection is Joseph P. O’Donnell who, in addition to his huge food concession business, has a number of ski area investments, including ownership of Bromley, Vt. and a half of Jiminy Peak, Mass.
Another ski resort figure in the world of major league sports is George Gillett, who recently purchased the controlling share (80 percent) of the Montreal Canadiens for $178.3 million.
Numbers ‘N Stats, Stats ‘N Numbers
It’s that time of year and our world is filled with all sorts of mixed statistical signals (see also Speakout, page 10). For starters, we have the latest sports participation figures from National Sporting Goods Association (NSGA) and American Sports Data (ASD). For the calendar year 2000, NSGA found 7.4 million alpine skiers seven years or older who participated twice or more (virtually identical to the previous year) and an additional 1.6 million single-day participants, for a total of 9 million. This represents about a 5.6 percent drop from the previous year. Interestingly, this gives a very realistic picture that is in the same ballpark with our own industry’s best estimates. ASD, which counts participants six years old and up, found no less than 14.7 million alpine skiers, representing an increase of six percent. It’s mighty hard to reconcile these two.
On snowboarding, NSGA found a whopping 7.6 million participants, of whom 3.3 had boarded just once during the period. They found a 31 percent increase in numbers of riders who participated twice or more. ASD found 7.2 million boarder participants, representing an increase of no less than 51.2 percent, making it they said, “America’s fastest growing sport.”
So what’s going on here? Well, it’s best to put the superlatives into perspective. Snowboarding is a very small sport, so increases (which, indeed there are) loom bigger than life when expressed as percentages. Also, sports participation generally continues to decrease, so gains of any size are unusual. NSAA’s president, Michael Berry, adds another perspective, pointing out that, while snowboarding is a growth sport, “its rate of growth has slowed significantly.” He also points out that, as a percentage of total skier/boarder visits to ski areas, the boarding component grew only 8.7 percent this season to 28.1 percent.
Using hypothetical figures (but not completely wacky ones), the real picture might look something like this: This past season, one might posit, saw 9 million different individuals ski or board one or more times. Of these individuals, 1.6 million were boarders only, 5.8 million were skiers only and 1.6 million participated in both sports. Looking at the future, and absent growth in the total skier/boarder total, the trend would be for skiers only to decline and boarders to pick up the slack. Many foresee an eventual leveling out at a 50-50 split. (“Like the sail to power boat split,” commented one observer, “with many doing both.”)
Any gains in the overall totals would presumably come from successful implementation of NSAA’s Growth Model in the form of a better retention rate of beginners and an increase in entry-level participants.
How do equipment sales fit with some of these scenarios? Quite well, it turns out, according to SIA’s Retail Audit, conducted by Leisure Trends. For the past August-through-March period, unit sales of skis and bindings in specialty stores and chains were down 15 percent, with boots down 2 percent. On the other hand, unit sales of boarding equipment were up: boards by 7 percent, bindings by 3 percent and boots by a fraction.
The Art of Corporate-Speak
Two days after American Skiing Company (ASC) released its third quarter results, it held a conference call press conference with simultaneous Webcast. Given the rather dismal results for that report—albeit introduced with a breezy, upbeat introductory paragraph—it was a bold move. After all, what if someone asks, “Given the great snow year and the heady increases in skier visits, how come net income is down so much?”
But the questions from analysts, institutional investors and the media were marshmallows. For B.J. Fair, ASC’s CEO, it was as though Mark McGwire were facing a pitcher from the Class D Underarm Softball League. As highly skilled practitioners of corporate-speak, B.J. and CFO, Mark Miller, were brilliant, knocking every question out of the park. Not very much information was conveyed, but hey, softball is softball. The spin was a little giddying, but one did get the impression that ASC’s leadership was mighty anxious that the ongoing negotiating of amendments to their “key debt facilities” would go well and that they would be successful in “securing an additional capital infusion.” Of course, it was “inappropriate” to discuss the details of any of this.
Another place for corporate-speak is when a resort company decides to lay off some staff, perhaps by attrition or switching a few from full to seasonal status. Such a routine function used to be performed quietly. Today, with a beady eye on the stock analysts following your company, you trumpet the details in a corporate-speak press release. (Wall Street, obsessed with earnings, rewards layoffs.) Andy Daly characterized modest layoffs at Vail as being “necessitated by fundamental shifts across the travel and leisure industry. . . All our market segments . . . now demand greater value and we have successfully met this demand, although we cannot continue to do so without a fundamental commitment to lower our fixed operating costs. . . companies that don’t respond to changing market demands, particularly in the face of an uncertain economy, don’t thrive.” Ditto similar press releases from Intrawest and ASC on their own “consolidations.”
Precedent Set in Discrimination Case
It isn’t often that national precedent is set in the ski world, but it happened recently when a federal judge in Eugene, Ore., ordered Mt. Bachelor to reinstate a ski patroller who had been removed in 1996 after management learned his wife had AIDS. The 28-page ruling said first responders, such as ski patrol members, pose “no significant risk” (the legal threshold in the Americans with Disabilities Act) of infecting others with HIV.
Short Turns
So bad has the name-calling ruckus between Squaw Valley and the Placer County Lahontan Water Control Board become that both sides have called for refereeing by the State Attorney General’s Office. . . After months of brutal infighting for control of Mt. Bachelor, Ore., between the Utah-based Powdr Corp. and a group led by former Bachelor president, Randy Pape, it seemed that Powdr’s John Cumming would close the deal after buying up 70 percent of Bachelor’s stock. But the deal is on hold again as another multi-million dollar suit was filed June 14 by Pape, claiming unfair treatment in Powdr’s successful tender offer.
