Is the market sniffing out a forced asset liquidation at Vail Resorts?

[snowbird surfer]

Oasis Partners et al are circling for a potential proxy fight. Prince is fanning the flames and possibly coordinating. The market is beginning to speculate. Where do you place odds on a forced asset sale/asset light strategy?

 

[ChrisC]

Oasis Partners et al are circling for a potential proxy fight. Prince is fanning the flames and possibly coordinating.

Zero.

Bored wealthy guys looking for things to do.... Success in technology doesn't necessarily translate to other industries. Although every tech leader starts to think so...

Look at Aspen Skiing Company; they state: skiing is a lousy business. By Vail/Alterra, not breaking out same-store sales/same-ski-area visits and focusing only on pass sales, they could spin a growth model for a few years. But they were buying growth, and likely ski area numbers were not growing all that much - if at all. It's a classic strategy by any company in any industry.

Prince's family is a long-time wealthy Park City real estate family that built notable projects like the Stein Ericson Lodge at Deer Valley. Do they need to control the Park City ski area and its real estate? At least Vail has shareholders and is accountable to multiple stakeholders. I would rather Park City be owned only by millionaire corporate officers at a public company than by a billionaire family. And the name "Prince" - good luck with that! He would be demonized immediately online and within the ski community as the anti-Christ.

See Chuck Horning at Telluride. See Reed Hastings at Powder Mountain.

And Prince's proposals are the same ones Park City/Vail submits to the town of Park City, which get voted down. He complains about the same chairs (calls them dangerous) that Vail tried to replace.

Finally, Vail doesn't really own many key resorts. It cannot afford to sell any of the below, or its network falls apart:

• Utah: only Park City
• California: Heavenly and Northstar. (Kirkwood is not too relevant)
• Colorado: Vail, Beaver Creek, Breckenridge, and Keystone. (The rest are irrelevant.)
• Canada: Whistler-Blackcomb.

And a few East Coast hubs and feeder day-trip resorts.

 

[snowbird surfer]

I’ll see your zero and raise it to 30%.

Asset heavy, struggling, and publicly traded, VR presents an interesting and perhaps compelling target for PE looking to unlock short term value. Shareholders might very well go along with a proxy fight and force asset liquidation. This former MTN shareholder and current PC homeowner would.

Horning and Hastings - their struggles not withstanding - confirm the well establish fact that rich guys like to own playthings, even if they remain non-performing.

The market is begining to price in a shakeup.

Change, like bankruptcy, comes gradually, then suddenly.

 

[EMSC]

Prince clearly thinks he knows more than nearly everyone else alive. Very boorish and self serving on his best days. While he may have some points against current Vail management, there is exactly a zero percent chance of him ripping it apart and literally anyone else in Utah or elsewhere ending up feeling better off in the long run IMO.

Sure an initial headline celebrating the elimination of the death star, then 2 years later endless complaints about current ownership, etc... Billionaires have no interest in running it for everyone else. They are interested in using it as a plaything or as leverage against the local community to get other things they want. EG read up on Prince's attempt at building his desired family mansion in PC for example. I can't imagine that he'd use owning PC to influence the city council to get his way on that... or etc...

For PC there is going to be no free lunch.

 

[ChrisC]

Asset heavy, struggling, and publicly traded, VR presents an interesting and perhaps compelling target for PE looking to unlock short term value.

Yes, let's have Vail go through another period of PE ownership (i.e., Apollo).

Cannot really load it up with debt (already has a lot), so spin everything off to a bunch of wealthy family owners, destroying the economics of the Epic Pass.

Everyone can pay the Alterra (partner) Ikon Pass prices because it's not a vertically integrated offering. Add 30%. If you sell off Vail's trophy, most interesting properties, all US skiers will suffer because they will end up paying more for visiting the premium properties since you will now have to pay partner fees.

And Alterra just sacked its CEO. Although there is a huge IPO window opportunity right now, Alterra is not ready to go. It likely has nothing-to-exciting operating margins. It's somewhat of a glorified Mountain Collective that owns some resorts.

EG read up on Prince's attempt at building his desired family mansion in PC for example. I can't imagine that he'd use owning PC to influence the city council to get his way on that... or etc...

For PC there is going to be no free lunch.

I cannot imagine one family owning Park City's largest employer and economic engine, Park City ski area, and running a Park City real estate empire.

I don't think altruism was the main reason they bought the Town Lift in Park City. It's just one more property that allows for scale.

Background on the Town Lift Dispute

• • The Sweeney Family Lawsuit: In late 2024, the property's previous owners—the Sweeney family through their entity Brothers III, LLC—filed a lawsuit against Vail Resorts seeking to terminate the historic 1981 lease agreement.
  • The Reason: The Sweeney family sued because they felt Vail Resorts failed to properly defend and indemnify them in a separate personal injury lawsuit stemming from a slip-and-fall incident on the property.
  • The Prince Acquisition: To resolve the uncertainty and prevent the landmark lift from being dismantled or shut down, Matthew Prince acquired the Town Lift Plaza and its surrounding Main Street holdings from the Sweeney family. Prince has since said he wants to invest in infrastructure upgrades for the area.

 

[snowbird surfer]

My original question was not focused on the merits of an ownership change, but rather its likelihood.

Regarding public sentiment, Prince owns the Town record, and like Victor Corleone, has “newspaper people on the payroll” who can write a story “people might like.”

He also holds significant leverage - as noted above by ChrisC - over the future of the Town Lift. This is the third most important access point for the entire PCMR infrastructure and likely the most impactful future project.

Then there’s the pending SLC Olympics which will likely bring motivated political and business interests into the mix.

Is Prince politically connected? Does cash lubricate deals?

The ski business, like airline/hospital business, is crap; high cost/low margin and therefore punctuated by mergers, acquisitions and bankruptcies. I’ll bet that the future mimics the past in this respect.

 

[ChrisC]

Again - Zero! I'm ready to throw down $$$ on Polymarket!

Vail cannot sell off its only Utah property. Exit the number #2 Ski State and the only one that is growing? And Alterra needs Vail in Utah, or it looks a bit monopolistic.

Again, the core Vail properties are the most recognizable brand names and largest ski resorts in North America that all receive 1 million+ skier days per year:

• Vail
• Breckenridge
• Park City
• Whistler-Blackcomb

Skiers buy their Epic Pass to decide on one of these ski destinations later. Or as a once-a-year trip after some day or weekend trips to East Coast or Midwest feeder resorts.

 

[snowbird surfer]

Don’t want to argue with a quant guy(?) who can out think a skigpt, but…ZERO?

You assume Vail is in control. They are a publicly traded company with creditors to pay, angry shareholders to service and subject to forces beyond their control (nature).

Is it really that hard to imagine a downturn followed by a forced sale?

Say Fauci funded another gain of function lab (likely if not certain) and we revisit a version of the Covid pandemic…and ski visits crater again… or, if you find black swan events far fetched, say two more years of low snow totals blow up the Colorado and Canada seasons… Recall, the ski business survives on thin margins. Creditors are nervous. Vail is vulnerable.

I’ll stick to my 30%

 

[Tony Crocker]

I have no experience in the VC business. But it's hard for me to see how value could be extracted from a breakup of Vail. Did Vail way overpay for some of its properties, especially the two in Europe? Sure, but that can't be undone. A buyer won't get that many $$ from selling the overpaid places. Most of the value is in the 4 places ChrisC mentions.

 

[ChrisC]

Is it really that hard to imagine a downturn followed by a forced sale?

Again, I will take any bet (market or otherwise), because there is no way that Oasis Capital Management will be able to force a sale of Vail's ski resorts (like a crown jewel property of Park City) and turn Vail Resorts into a Coca-Cola-like model as a brand, marketing, and pass seller.
They want to push Vail into selling off some of its mountains as part of an asset-light model. Essentially, they'll become operators of the Epic Ski Pass. Prince can keep pushing that story, but he's obnoxious and on a vanity crusade.


Oasis Capital Mgt - look at them. They specialize in Asia and are based in Hong Kong. WTF do they know about Vail Resorts or running a ski company? Breaking into parts greater than some of the whole? They are ex-Israeli army guys who made money in China's resurgence.

Oasis Management | Global Investment Manager

Oasis Management - Targeting consistent, superior returns to investors since 2002. Global investment across capital structures with a focus on Asia.

oasiscm.com

Sell to what, to whom? Sell all of Vail Resorts - or each area one by one? Like, who's buying... who would buy more than one resort? Can Powdr not sell anything right now?

• A billionaire in Park City? Who has no money and lives off bank loans backed by stock that might collapse after this AI market? Really, f- him (Vail's largest shareholder told him to go to hell)
• Does Powdr want to get back in the business?
• Can Nederland, CO, issue more bonds to buy Crested Butte? Keystone?
• Boyne wants something?
• Maybe another tech mogul can purchase Northstar?
• Australian resorts look great after this winter!
• Took 20+ years to assemble this - unwind it quickly?
• You are not going to sell the crown jewels (Vail, Breck, Park City, Whistler... or Heavenly/Stowe/Okemo)
• Unwind any economies of scale

Summary of Major Owners

• BAMCO Inc. (Baron Capital): Top institutional holder with an 18.34% stake.
• Capital World Investors: Second-largest institutional holder with a 12.22% stake.
• Capital International Investors: Third-largest institutional holder with a 10.72% stake.
• BlackRock & Oasis Management: Round out the top five, holding 9.58% and 6.54% respectively.

Ron Baron, founder of Baron Capital, reportedly told Prince to “Go to Hell” in a voicemail rebuffing Prince’s strong pressure to buy Park City Mountain Resort from Vail. Baron Capital likely won’t be convinced by Oasis Capital,




I will bet 30% or more that this woman is gone sooner rather than later - Vail's Chief Revenue Officer coming from Lululemon?

She is staring at double-digit YoY Epic Pass declines. She picked the wrong year to join the 'Vail Team'. Wakes up hating life....No offense, but how is selling Yoga Pants and athleisure relevant to ski resort revenue and experience? She's f-ed.

She gets a winter, then looks for a new job next summer 2027. Likely expensive contract buyout.

 

[Tony Crocker]

She is staring at double-digit YoY Epic Pass declines.

This is no different from reduced advance bookings following bad snow years 30-50 years ago. That's just the way the casual ski consumer (and most people) think: short term recency bias.

 

[EMSC]

Vail's Chief Revenue Officer coming from Lululemon?

She was brought in to juice all the non-direct skiing revenue that is the new focus for Vail. Selling overpriced yoga pants is sort of relevant to selling all the 'white glove' BS stuff that Katz and Vail just announced. So hopefully the volume on that junk goes up and with huge margins to offset the reduction in basic skiing revenue for them. Otherwise she will definitely be gone.

The whole thing Vail is focusing on feels like its way too late in the supposed "K" economy cycle anyway. That somehow there is a huge and growing upper tier that they can milk for huge margins for token and not particularly needed services. The whole thing feels way off base...

 

[snowbird surfer]

Subscription model (passes) + high margin add ons (rental/spa/lessons etc) = multiple expansion. It’s in Vail’s interest to lighten their balance sheet by unloading properties to a billionaire or community, then remain on to run ops and sell passes. Difficult to do but surely a consideration on their white board. In Prince, they may have found their dog who catches the car. In the Park City community, they may find the deep pockets and the political will to float a bond to support an ownership change. The community has already funded the purchase of treasure hill and bonanza flats. Perhaps the local ski hill too?
As for Vail balance sheet, I don’t know the details of their financing structure, but rollovers ain’t getting any cheaper. Surely it will come under pressure if operating margins and net profits don’t improve.

The above is conjecture but it seems to me that despite the antagonistic posturing, 2 or possibly 3 of the principles are aligned. Getting to a deal would no doubt take another bad year or two. But if we see that, MTN will likely be on the ropes and trading 30-50% lower than it is now, making the above scenario considerably more likely.

 

[jasoncapecod]

The above is conjecture but it seems to me that despite the antagonistic posturing, 2 or possibly 3 of the principles are aligned. Getting to a deal would no doubt take another bad year or two. But if we see that, MTN will likely be on the ropes and trading 30-50% lower than it is now, making the above scenario considerably more likely.

We can only hope

 

[ChrisC]

It’s in Vail’s interest to lighten their balance sheet by unloading properties to a billionaire or community, then remain on to run ops and sell passes. Difficult to do but surely a consideration on their white board.

These two models (Boyne and Alterra) have been tried and have not delivered returns comparable to those of a vertically integrated ski operator like Vail. Alterra likely wanted to pursue a Vail model but couldn't, as key ski resorts were acquired or refused to sell. Alterra would be prepping for an IPO right now during this bubbly window if it made sense to have wealthy families own, operate, and control investment decisions in ski resorts like Aspen-Snowmass, Jackson Hole, and Sun Valley. Boyne tried a leaseback model, primarily to finance acquisitions from ASC & Booth Creek, but abandoned it to pursue a Vail vertically integrated model.


1. Alterra: hybrid ownership-and-partnership platform

Like Vail, Alterra owns significant resort operations. Unlike Vail, however, much of Ikon’s appeal comes from mountains Alterra does not own—such as Aspen Snowmass, Jackson Hole, Snowbird, SkiBig3 and Boyne’s major resorts.

Ikon combines:

• Broad or unlimited access at Alterra-owned destinations.
• A limited number of days at partner destinations.
• Blackouts or reservation controls on lower-priced products.
• Partner payments whose detailed formulas remain private.

This gives Alterra a network much larger and more geographically diverse than its owned portfolio without having to purchase every participating resort. The limited-day structure is important. A customer may receive seven days at a partner rather than unlimited skiing, protecting the partner’s local-pass business and limiting uncompensated crowding.

Strengths

• More capital-efficient network expansion than Vail’s acquisition-heavy approach.
• A differentiated collection of high-prestige resorts.
• Partners retain their own brands and operating character.
• Private ownership permits a longer investment horizon and less quarterly disclosure pressure.
• Partners diversify Alterra geographically without Alterra assuming all their operating risk.

Weaknesses

• Alterra cannot fully control capacity, service standards, or investments at partner mountains.
• Pass revenue must be shared with partners.
• Partner contracts can be renegotiated or terminated.
• Customer data and ancillary spending are divided among multiple companies.
• Ikon’s premium positioning makes it less purely volume-oriented than Epic.

2. Boyne + CNL Leaseback of Ski Resorts. Ended in 2018.

The sale-leasebacks allowed Boyne to:

• Release capital tied up in land, lifts, and resort infrastructure.
• Expand its operating portfolio without funding the full property purchase.
• Continue controlling daily operations and branding.
• Use the proceeds for acquisitions, improvements or debt reduction.
• Grow faster than its family-owned balance sheet might otherwise have permitted.

Economically, CNL was the landlord, and Boyne was the operating tenant. CNL sought relatively predictable rent; Boyne kept the upside from successful resort operations after paying operating expenses and lease obligations. The arrangement converted a large upfront ownership cost into a fixed contractual obligation.

That was attractive when business was strong, but riskier in poor years:

• Rent remained due during weak snowfall.
• Boyne bore operating volatility.
• Major capital-improvement responsibility had to be negotiated between landlord and tenant.
• Boyne did not receive the appreciation in the underlying property.
• Long-term leases reduced strategic flexibility.
• A sale by CNL could place Boyne under a new landlord.

CNL ultimately sold the portfolio to an Oz Real Estate affiliate. Boyne then purchased the six mountain resorts and Gatlinburg attraction from that affiliate in May 2018, ending the lease structure and restoring ownership.

In Prince, they may have found their dog who catches the car. In the Park City community, they may find the deep pockets and the political will to float a bond to support an ownership change. The community has already funded the purchase of treasure hill and bonanza flats. Perhaps the local ski hill too?

Vail wouldn't change its entire business model for a one-off sale of Park City. It would need to abandon its entirely owner-operator, vertically integrated business model and likely sell the majority of its resorts. Wall Street would then have to reevaluate its margins and multiples for the new business model. Assume both would be worse.


Plus, Prince seems to be abrasive at best, and perhaps best categorized as an ass. Why alienate Vail's largest shareholder (20%+) when you want one of its resorts?

Also, Vail did invest heavily in Park City, linked it to the Canyons, and created the Largest Resort in North America. Yes, it needs more investment in that linkage. There are a lot of slow lifts on the Canyons' periphery and poorly designed pods. In fact, the entire real estate development in the middle of the Canyons is ridiculous and obstructs more intelligent design.

However, when just a few homeowners can stop all investment/improvements in Park City by claiming they will violate operating capacity, why bother?

 

[ChrisC]

No matter how many times Park City goes through proper planning processes for much-needed improvement, you cannot stop residents from filing lawsuits and petitions.

I don't think a tech CEO has any ability to change this behavior. In fact, they might be the least equipped to hear 'no'. Withhold investment, threaten people, use local real estate empire against citizenry, etc.

• Park City’s twice approved Eagle and Silverlode replacements face yet another lawsuit.

Parkite takes Park City to court over ski mountain lift upgrades

It's the second time Silverlode and Eagle lift upgrades have been challenged in state court. Last time, a judge blocked them.

www.kpcw.org