MOTHER NATURE AT HER IRONIC BEST/WORST
In the countdown to Christmas there was irony to spare in the ski world. Remember, this was the year when destination resorts would have to scramble to get business because of the public’s disinclination to travel. And this meant the ski areas close to metropolitan markets in the Northeast, Midwest and Southeast would make out like bandits. All very logical except that the snow gods dropped their stuff on those destination resorts (Whistler-Blackcomb had accumulated 141 inches in the first 18 days of December!) and forgot about the rest. Compounding problems is the eastern drought. Snowmaking dependent on natural recharge of rivers and ponds may be at risk.
In the meantime, southern California snapshots sustain us: a week before Christmas and Mountain High had already logged an astonishing 93,700 skier/boarder visits. And this with minimum natural snowfall and the area not fully open. (Good snowmaking temps, however.) They estimate upwards of 96 percent are snowboarders; the 12 – 26 age bracket is driving the bonanza. A preview of this was seen at the Los Angeles consumer show, Ski Dazzle, where a staggering (and record!) 92,376 showed. This 12 million urban market really rocks.
CORPORATE BENEFITS, VAIL STYLE
Perhaps the ski resort industry really has grown up, now that big league corporate perks are with us. But are we now going to see resort CEOs across North America demanding their boards show some respect and gratitude—pointedly suggesting they put together an appropriate package to show their appreciation? If so, they can place the blame squarely on the Compensation Committee of the Vail Resorts (VR) board of directors, which (coached, we wonder?) proposed a sumptuous package of goodies to persuade Adam Aron to stay on until mid-2003. (In the interest of disclosure, the writer of these Blue Pages made what he thought was an appropriately modest suggestion about being retained for another couple of years and was greeted with loud and unseemly guffawing.)
The 47-year-old Aron, who had a base salary of $675,000 in fiscal 2001, was granted stock and options worth nearly $5 million on September 26 as part of his compensation package for fiscal 2001. Then, in November, Aron was wooed to extend his stay at the helm. By staying on, he will get a cash bonus to buy his Beaver Creek home for about $1.5 million. (It’s already worth lots more than that.) Also, Aron gets deals in two of Vail Resorts’ real estate developments. If exercised, the cash bonus and loan forgiveness amounts to over $1.2 million.
Now, to put this all in perspective, Aron is not the only beneficiary of an appreciative VR. Top execs Andy Daly, Bill Jensen and Roger McCarthy go nitey-nite in digs that, well, reflect the extraordinary value of those executives to the company. Nor let us forget that VR is performing well by Wall Street standards. (It must be admitted that after Enron, it’s hard to say just what Wall Street standards are, but you know what we mean.) So, their stock is down a bit now, but VR is victimized by all the other junk that is happening (recession, 9/11 and so forth). Furthermore, VR is out there buying stuff, like Rockresorts. That’s Rock as in Rockefeller. You don’t see American Skiing Company (ASC) out there buying stuff. They’re pretty focused these days on keeping the ship afloat. So, we saw no reports of ASC’s CEO, “B.J.” Fair, having executive mansions pressed on him. Hmmm.
OLYMPIC BRIBERY CASES DISMISSED
Just in time to clear the air for the Winter Olympic Games, a federal judge on November 15 dismissed all remaining charges in the two-year-old bribery and fraud case against Salt Lake City Olympic bid leaders, Tom Welch and Dave Johnson. Judge David Sam’s ruling pretty well applied legal whitewash to a scandal that had prompted an internal IOC probe leading to the purge of 10 IOC members. Odds heavily favored there being no appeal by the prosecutors. They’re probably relieved.
RELEASE FORMS FOR JUNIORS IN DOUBT
A potentially chilling decision was handed down by the Supreme Court of Utah that upheld a lower court’s ruling that a parent cannot contract away a child’s right to sue for negligence. (Hawkins v. Peart, No. 20000562) Although the case concerned an 11-year-old injured in a horseback riding accident, whose mother had signed a release and indemnification form on behalf of her daughter, the principle clearly affects all sorts of youth, recreational and educational programs including, of course, skiing.
It’s a puzzlement because minors are not entitled to execute such a form, so if a parent can’t do so as guardian, what is the rental shop or ski school that requires releases to do?
S.I. BLASTS UTAH “SNOW JOB”
The December 10 issue of Sports Illustrated took aim at “Utah politicians and the 2002 Olympics,” and painted a scene of brazen money-grabbing. As they put it, “Private and public interests have siphoned an estimated $1.5 billion out of the U.S. Treasury, all in the name of [the] Olympics.” The long (14-page) exposé computes that the U.S. tax dollar bite works out to $625,000 for each of the 2,400 athletes—a 996 percent increase from the $57,000 average for the 1996 Atlanta Olympics. The article is a brutal indictment of the system that allowed determined Utah officials—from municipal to state to congressional—to drape the Olympic flag over projects while tapping into federal funds.
SI’s $1.5 billion number is vigorously disputed by SLOC’s Mitt Romney, who says only the $350 million in direct support to the Games should be counted.
Most of the revelations in the article are rehashes of old stuff that has been bandied about for some time: Earl Holding’s success in achieving a highly favorable land exchange with the Forest Service, for example. Mud, old and new, is slung scatter-shot style, with a number of prominent ski resort figures mentioned as having benefitted from Olympics-related largesse, including Ian Cumming of Powdr Corp., Deer Valley’s Edgar Stern and even Nick Badami, previous owner of Park City. It’s small comfort that Utah’s congressional delegation, including Senators Hatch and Bennett, come off worst of all.
THE REASON FOR JUST ABOUT EVERYTHING
The consummate excuse of “My dog ate my homework” is perhaps being replaced. Whatever else Osama did, he seems to have provided American businesses with the universal key for understanding whatever goes wrong. Consider this sampling from recent press releases: 9/11 gets the blame for the defeat of a monorail proposed for Colorado…Dave Barry puts some of the blame on 9/11 for the defeat of a vote to incorporate Copper Mountain…Mission Ridge, Wash., taken off the market when 9/11 louses up a deal…In Ten Sleep, Wyo., Big Horn Mountain closed for the winter, CFO Dan Sikora blaming both 9/11 and the “ongoing anthrax threat.”…Jim Greene, GM of Red Mountain, B.C., thought 9/11 short-circuited the sale of the area to a developer.
RENTAL OPS GETTING FINE TUNED
Clearly, the rental operation is increasingly viewed as key to an area’s ability to attract and retain business in addition to its role as an awesome profit center. In a move to consolidate its strengths in the rental field, Christoph Deszecker, director of rental customer services for Head Tyrolia, hosted seven focus groups this past fall in the U.S. and Canada with the primary purpose of determining what topped the wish lists of the rental ops directors. “Our job was to listen,” said Deszecker. But the 70 attendees from about 50 different stores also had an opportunity to tap into the systems knowledge developed by Deszecker in the course of his 10 years of developing Whistler/Blackcomb’s rental operation into North America’s largest. (With a yield of $1,000/sq. ft. from rental space, perhaps the most profitable, too.)
FOREST SERVICE RESPONSIVE TO LEISURE
The relationships between the ski area industry and the Forest Service have always been something of a roller-coaster ride. Right now, according to NSAA’s director of public policy, Geraldine Link, things are smooth. “We get a chance early in the decision-making process to give our opinions and influence events by presenting facts,” she says. And it hasn’t always been this way. A key figure is Mark Rey, Under Secretary of Agriculture for Natural Resources and the Environment. NSAA is working with him to craft a new Memorandum of Understanding between the USFS and the ski industry (NSAA, SIA and USSA). Rey, in contrast to his micro-managing predecessor, Jim Lyons, is described as “disciplined, pragmatic, very strategic.” The recreation industry is clearly pleased; the environmentalists generally not. On an unrelated Forest Service matter, Dennis Bschor, the ski world’s friendly contact on recreation matters, goes to Alaska as regional forester.
AT PRESSTIME…
The investment group headed by John Henry that bought the Boston Red Sox is the one originally organized by Les Otten of ASC fame.
