Official KSL Bitch AND Bitch about people bitching about KSL thread

[enlosandes]

Any lawyers out there want to speculate on Anti-trust laws? It seems like the new entity is going to own 6 California ski resorts.

[TahoeJ]

This isn't going to change jack shit. I'm obviously speculating, and I obviously don't actually know what I'm talking about, but this is a consolidation play, not a play on an undervalued asset (at least with respect to Squaw/Alpine).

KSL originally bought squaw as an undervalued asset. The best ski resort in a great market area being was run like shit by some grouchy old rich lady, and they saw an opportunity to acquire an asset at less than what they valued it. They bought it at a discount, spent a bunch of money, and closed the valuation gap.

From an equity owner's perspective andy wirth and co. have been doing a bang up job. They overhauled personnel, set up a whole new marketing system, built a ski-through starbucks, and changed the entire positioning of the resort. Now visits, occupancy, daily revenues, etc. etc. etc. are all through the roof. People used to be afraid to come to squaw, now KT is the fucking jerry mecca. I'm sure they killed it this season (record pass sales and the resort was closed all winter!).

Shit like traffic is not going to get wirth fired. If anything I bet he gets a raise.

Alex was a fucking legend for what he built and for his focus on the skiing experience, but he also started from scratch, didn't have a $50mm+ capex (from the acquisition) to break even on (plus another $50mm or so post-trade), and most importantly, didn't have a bunch of fund of fund investors that have never heard of squaw valley and frankly don't give a shit about some place called silverado.

As soon as that capex is made, the entire profitability dynamics change for good. There's no way to go back to the way things were before without someone taking a $100mm hit.

Aspen is not buying squaw to come in and make it all sick again. They're not even really buying squaw at all. They're establishing a whole new company to take on vail (obviously along with KSL and however many others). Sure, maybe they staff the new company with good people that know how to sort out traffic problems or whatever, but this means squaw is under big corporate ownership. Going to be about finding that balance between minimizing costs while keeping your customers just happy enough that revenue is maximized. Getting sued because jerry got caught in an avalanche is a great way to incur costs, so don't expect them to start getting more aggressive about opening terrain anytime soon.

tl;dr: KSL goes away but we get to keep andy and jerry.

You make some good points... but from an investor perspective you're a bit off target. Yes, I'm sure Squaw is more profitable now than it was before KSL took over. But that's incremental - the village has to be built or at least breaking ground (to sell in advance) to make a proper return for the expenditure, otherwise that money would have been better spent elsewhere when looking at a 10+ year time line. One could argue that Wirth has seriously botched that process by pissing off the local community (meh, not that it matters from their POV), and more so by pushing through the approval with a sub-par EIR that is going to come back to bite them in court. They will almost surely be forced to re-do certain sections (especially traffic) which then means they have to go back to the planning commission and board of supervisors and do it all over again. That's going to be a multi-year delay and time is money.

I'm no financial expert but my friend runs a pretty massive hedge fund (16-20 billion) and he more-or-less agreed. If they get everything they want and there aren't too many more delays it will still have been a good investment (probably) but not as good as it should have been, in theory. It's worth noting that the stock market has had record gains over the past 5-6 years while KSL's money has been tied up in owning Squaw / Alpine.

[dunfree]

Any lawyers out there want to speculate on Anti-trust laws? It seems like the new entity is going to own 6 California ski resorts.

nal, but the chance of a successful anti-trust challenge in the current era is about zero.

[Robojerry]

Idk, I disagree with the theory that the village development plan was absolutely essential for KSL to realize a return. This whole transaction seems like a exit for them. Still speculating, still don't know what I'm talking about, but the fact that KSL's assets are being transferred to the new entity, while Aspen's aren't, suggest that KSL is just swapping equity (while Aspen is paying cash, or leveraged cash).

Each of KSL's funds are only like $1bn, and all of their investments to date have been small potatoes, so I doubt they have the wiggle room in any of the prospectuses to go out and spend an entire fund's worth of capital on ski resort empire-building. So the only other thing that makes sense is an exit.

If this all plays out as planned, KSL is going to find way more liquidity in their investment in a multi-billion dollar diversified resort developer/operator versus their stake in an individual ski resort. Gives them a quiet way to exit and move on to the next oppy in a year or two. Probs going to exit at a reasonable profit too... the scale they get with the new megacompany is going to add value and I doubt they made an investment where the only way they could realize a good return would be through the approval of a development plan of unprecedented scale in one of the most protected areas of the hardest state in the union in which to develop. Ya know?

Though, it's been a little while since I was doing time inside the cubicle.

And you've got friends in high places if he's really running a $20bn manager in California. That would be one of (if not the) largest hedge fund managers in SF. If he's not too busy heliskiing and playing golf, maybe you could convince him to get into the ski resort business? That's really the only thing I could see saving squaw at this point. That or a big ass recession.

[4matic]

Y It's worth noting that the stock market has had record gains over the past 5-6 years while KSL's money has been tied up in owning Squaw / Alpine.

The Crown Family works privately but they do have a venture arm investing in biotech that must have a public exit. It could be they see the success of MTN and are considering a public sale. That would probably be the best gamble for maximum return.

[old goat]

Idk, I disagree with the theory that the village development plan was absolutely essential for KSL to realize a return. This whole transaction seems like a exit for them. Still speculating, still don't know what I'm talking about, but the fact that KSL's assets are being transferred to the new entity, while Aspen's aren't, suggest that KSL is just swapping equity (while Aspen is paying cash, or leveraged cash).

What I heard was that Aspen basically bought Squaw, despite the fact that they're portraying this as a partnership. This was from a very reliable, inside source (ok he's a bootfitter in Olympic Valley but everyone gets to have an opinion, right/)

[FormerKnuckleDragger]

Renewed my pass grudgingly today. Noticed that they changed the kid situation - used to be 4 and under were free. Now it's $369 for 4-12 for a gold pass. Thanks, KSL.

[tahoearmada]

NOTHING to bitch about today!
Empty mountain on a pow day with almost all the lifts running!!!

[TahoeJ]

Renewed my pass grudgingly today. Noticed that they changed the kid situation - used to be 4 and under were free. Now it's $369 for 4-12 for a gold pass. Thanks, KSL.

Actually it has been 6 and under are free. That's pretty lame.

[mmmm...pow!]

Nope, was four and under, and it was good as long as the pass was purchased before the fifth birthday, even if they turned five during the season. I'm wondering how seriously to take ksl's threats that pass prices will go up on the 18th.

[sierraskier]

Idk, I disagree with the theory that the village development plan was absolutely essential for KSL to realize a return. This whole transaction seems like a exit for them. Still speculating, still don't know what I'm talking about, but the fact that KSL's assets are being transferred to the new entity, while Aspen's aren't, suggest that KSL is just swapping equity (while Aspen is paying cash, or leveraged cash).

Each of KSL's funds are only like $1bn, and all of their investments to date have been small potatoes, so I doubt they have the wiggle room in any of the prospectuses to go out and spend an entire fund's worth of capital on ski resort empire-building. So the only other thing that makes sense is an exit.

If this all plays out as planned, KSL is going to find way more liquidity in their investment in a multi-billion dollar diversified resort developer/operator versus their stake in an individual ski resort. Gives them a quiet way to exit and move on to the next oppy in a year or two. Probs going to exit at a reasonable profit too... the scale they get with the new megacompany is going to add value and I doubt they made an investment where the only way they could realize a good return would be through the approval of a development plan of unprecedented scale in one of the most protected areas of the hardest state in the union in which to develop. Ya know?

Though, it's been a little while since I was doing time inside the cubicle.

And you've got friends in high places if he's really running a $20bn manager in California. That would be one of (if not the) largest hedge fund managers in SF. If he's not too busy heliskiing and playing golf, maybe you could convince him to get into the ski resort business? That's really the only thing I could see saving squaw at this point. That or a big ass recession.

I always assumed that the only way KSL makes any money on this deal is to develop and sell a shit ton of real estate, build a village, etc... why go through all the trouble of county approvals, EIR's, fighting the locals, etc....? I mean, that's exactly what East West Partners did with Northstar right? But I guess they could simply just "act" like that's what they were going to do, put some lipstick on the pig and go for the quick flip. But given all of the variables, large capital cost, huge operational costs, dependence on good winters, etc...that seems like an extremely risky and unlikely short term investment.

But this isn't KSL's first rodeo, what did they do with Vail/Beaver Creek? That was a development play wasn't it? Lots of change and disruption in this industry...maybe they got into this and then realized how hard it was going to be to develop in California, how hard it was going to be to compete with Vail's momentum and size and then pulled the rip cord. But I doubt it.

[TahoeJ]

Nope, was four and under, and it was good as long as the pass was purchased before the fifth birthday, even if they turned five during the season. I'm wondering how seriously to take ksl's threats that pass prices will go up on the 18th.

My 5 year old who is about to turn 6 disagrees... so does my 8 year old who I've only had to pay for her pass the last 2 seasons. Maybe they were grandfathered in?

[mmmm...pow!]

Hmmmm...you got pictures of that pass agreement? Might have to question some folks at the pass office if that is indeed the case.

[xtrmjoe]

I grew up having a ski resort age and a real age. Rode free for a couple extra years when we traveled to tahoe. Plan to do the same with my little one. Are they asking for birth certificates?

One more bs way to try and get short term gains via long term losses. If they can't keep new people coming into the sport who do they expect to sell to in 10,20,30 years? My family grew up skiing (china peak!) but im the only one who still does.

[TahoeJ]

^^ No birth certificates needed.

Hmmmm...you got pictures of that pass agreement? Might have to question some folks at the pass office if that is indeed the case.

It was in person at the counter both times but come to think of it, it could have changed this season because my 6 year old didn't ski there this year (he did last year though). But prior to that I'm positive 6 and under was free because I've definitely only purchased a pass for my older daughter for 2 seasons.

EDIT: maybe I'm thinking of "turning 6" and it was 5 and under, not 6 and under.

On that note, what's up with Vail letting kids under 12 ski free at Keystone but they offer nothing of the sort in Tahoe?

[mcski]

My kid was 5 and under for several years

[FormerKnuckleDragger]

Nope, was four and under, and it was good as long as the pass was purchased before the fifth birthday, even if they turned five during the season. I'm wondering how seriously to take ksl's threats that pass prices will go up on the 18th.

This is what I remember. As for prices going up...they'll go up, but there will be a $50-$100 incentive (resort cash or something else) that brings the price back down for people who buy before the end of May. Happened a year or two ago, and KSL wasn't willing to give the same perk to people who bought before the prices went up. I get that it's a business, but once they have your money, they don't give a shit until next season.

[spnce]

http://www.moonshineink.com/news/wha...w-buying-spree

According to Wirth there will be no changes to its management and leadership. “We’re part of the acquiring company, so the answer is no,” Wirth said, regarding changes to the staff structure at the resort.

[old goat]

http://www.moonshineink.com/news/wha...w-buying-spree

According to Wirth there will be no changes to its management and leadership. “We’re part of the acquiring company, so the answer is no,” Wirth said, regarding changes to the staff structure at the resort.

Or maybe they haven't told him yet he's out of a job.

KSL sure did a crappy job of clearing I80 last night and this morning.

[spnce]

Peak Squaw today. Maintenance holds on headwall, sibo, gold coast, granite and big blue. Some good shit

They actually started preparing to evacuate gold coast at one point, but got it running before it came to that.

[Ottime]

Baffled. How does that happen on a sunny Saturday in April?

[spnce]

Years of deferred maintenance.

[hercule33]

Gotta love KSL "sun" holds.

[gnarbro365]

Peak Squaw today. Maintenance holds on headwall, sibo, gold coast, granite and big blue. Some good shit

They actually started preparing to evacuate gold coast at one point, but got it running before it came to that.

Brutal.

[gone2alpine]

And over at Alpine....conditions at Sherwood and High T finally approached all-time for spring corn today...so tomorrow is apparently the last day for Sherwood. We can't actually give people what they want now can we?

Are they smart enough to even offer morning Sherwood and afternoon Scott as a compromise? Apparently not...