If you took all the lifts on Aspen Skiing Corp.’s three mountains and strung them end to end, they would stretch 17.7 miles long, with 4.3 miles of vertical and could handle nearly 19,000 people an hour. So there’s little doubt D. R. C. Brown is in the transportation business and he claims that’s why he makes money.
“We stick with what we know how to do best,” says Aspen’s president. And he’s not doing too badly. Profit, after taxes, was $348,000 for the year ending April 30, 1968, followed by profits of $576,000 and $624,000 for the 1969 and 1970 fiscal years. Gross sales for those three years were $3,143,000, $4,190,000 and $5,194,000.
This profit is earned from a relatively small capital investment. Total assets as of April 30, 1969, were $3,500,000 and these grew to $6,400,000 the following year. Brown feels one of the keys to his company’s success is that expansion is financed mostly from earnings. “Even then, we’re always a year behind, so we’re in debt to the bank every fall, out in the spring and back in again in the summer. We also build the lifts ourselves and this reduces the cost.”
He characterizes Aspen Skiing Corp. as a small general contractor. “We don’t just build lifts. We build mountain-top restaurants, pipelines, roads, the whole works.” The company is public, with about 250 stockholders, but about 75 per cent of the shares are held by a group of 10.
It was Brown’s lift expertise that led Aspen to buy out Breckenridge ski area last fall. “They were doing a rather lousy job of operating the lifts. We thought we could do better and I think we’re proving it. At least the lifts aren’t breaking down every week. We tore every one of them down and rebuilt them. We had to junk one completely and replace it,” Brown explained.
Brown first became involved in Aspen when he leased the corporation some mining claims on Aspen Mt. He became a member of the board of directors and then, about 12 years ago, he retired from his cattle business and became president. “I thought this would be a pretty easy job. There was just me, a girl in the office, 10 summer employees and 40 in the winter, so I was able to get in quite a bit of skiing. That’s all changed now,” says Brown. But he still manages to ski now and then and certainly doesn’t look his 57 years. Just how strong his constitution is was proven this spring when his car was forced off the road into the Colorado River by a semi-trailer while Brown was on his way to Aspen from Breckenridge. He rolled down a window, crawled out of the submerged car, swam about 12 feet through icy water to shore and hitched a ride into town, none the worse for wear.
Looking at future expansion, Brown says there is little room left for adding lift capacity on Ajax, although the No. 1 single chair that provides access to the upper lifts will be replaced by a double next December that will handle 500 per cent more skiers. Buttermilk, which has lifts and trails for about 4,000 skiers, is just about at maximum, says Brown, but Snowmass is another story. “This is where we have our expansion potential,” Brown explains, “I suspect we’re about a third developed there.”
Asked why Aspen had never built any enclosed lifts, Brown said, “Gondolas used to haul half as many people and cost twice as much as a chairlift. Now they haul nearly as many people, but they cost four times as much, so the ratio is still four-to-one against them. On a long haul in cold, windy places, they have their place, but then a lot of skiers, especially the better ones, don’t like them, because they have to take their skis off to ride them. A gondola is a prestige item, but Aspen’s reputation is sufficiently established so we don’t need it for the advertising value. And we’re not situated to do enough summer business to justify it.”
Brown has specifically chosen not to become involved in real estate development. Some land was acquired in the Breckenridge deal, but this was sold to a developer. “We have a small company and to get into real estate, we’d have to expand, buy land and then to get construction financing from a bank, you have to have the units 60 per cent pre-sold. You have to peddle these things before you ever pick up a shovel. This is a rather specialized job and I think we’d be better off to stick with what we know.”
One of Brown’s current headaches is an attempt by ski patrolmen to organize themselves under the teamsters union and he sees this as a test case for the rest of the ski area industry. “If they don’t succeed here, it will probably die a quiet death. These patrolmen want to make a career out of their jobs and I don’t feel it’s really an appropriate career. Some areas will refuse to keep a patrolman more than three years.” Naturally the patrolmen want higher wages. They are currently paid $2.56-$2.96 an hour and Brown says they have received cost-of-living raises every year. “They’re also griping because we won’t pay to have their ski pants cleaned, even though we pay for cleaning all company-supplied equipment, like parkas and windshirts.
“The teamsters will not accept a contract that doesn’t have a union shop clause and company policy has always been to maintain an open shop, so we’re at loggerheads right there. I suspect these guys will go out on strike and, if so, we’ll have to replace them,” says Brown.
In the election to determine whether the patrolmen wanted unionization, a majority voted in favor on Ajax and Snowmass, while Buttermilk patrolmen rejected the union.
Another battle Brown is embroiled in revolves around the proposed U.S. Forest Service graduated fee system of assessing ski areas that operate on forest service land. “This system would be the worst mess the forest service ever unleashed on us. We have troubles enough with the forest service and their over-supervision. In some instances, it’s almost harassment. They want all the privileges of management and none of the responsibilities.” At Ajax, 18 per cent of the land is USFS, at Buttermilk 60 per cent and Snowmass 70 per cent. Under the proposed system, “there is no way of having any two operators figure their gross fixed assets the same way. Each area would negotiate this with their regional forest service people and come up with a hodge-podge of ratios because it is impossible to establish GFA. I sat down with the forest service and established a ratio based on our current books. Then I told them I could cook a new set of books, which I am allowed to do, to take advantage of all the provisions of the proposed system and I came up with an entirely different GFA.” Brown is pressing for a plan whereby the USFS would assess the areas two per cent of gross sales and he is working on a bill to present to Washington legislators. New leases would be on the two per cent plan, but operators with existing leases could continue with them or convert to the new system. “We’re trying to establish more of a landlord-tenant relationship rather than the areas just being permittees at the forest service’s mercy,” says Brown.
