Opinion » Maxed Out

Maxed out

The family jewels



We are fa-mi-ly. Whistler-Blackcomb, all of you and me.

Like most families, we have our ups, we have our downs. We fight, we bicker, we punch, we argue about who’s hogging more of the back seat than they have a right to, we call each other names that sometimes push the boundaries of terms of endearment.

Of course, we have marvelous times together as well. We enjoy each other’s company. We help each other, try to respect what we’ve grown up to be and, let’s be honest here, we love each other. If we didn’t, we’d be living some place else.

But like sibs who have grown to adulthood, we don’t always like each other’s friends, spouses and new relatives. Some of them are not particularly interesting. Some are self-absorbed, greedy, rapacious, pompous know-it-alls we wouldn’t want to share a seat on a bus with. C’est la vie, dude.

By the time this column hits the mean streets of Tiny Town, Whistler-Blackcomb’s partner — owner, actually — may well have joined a welter of others under the crowded umbrella of Chapter 11 of the U.S. Bankruptcy code. We feel our brother’s pain. It is our pain as well.

I’m not trying to cause a panic and I’m not saying anything that isn’t already hanging out there in public. Almighty Fortress, like so many players in the funny money game, is watching parts of itself disappear faster than turkey thighs at Thanksgiving, most noticeably the parts that represent “value”, vanishing like a fart in the breeze, and access to credit, a quaint former business practice — like profit — that’s almost ceased to exist.

Today, Thursday, is one of Fortress’s come-to-Jesus moments. Around $1.68 billion of Intrawest debt, owed to a consortium of creditors, comes due. People who are reported to be “close” to the negotiations between Fortress and its creditors do not believe all of them will agree to roll the debt; any holdout will scotch the deal absent a new player agreeable to the others. The debt will become due and payable, due being unavoidable, payable being problematic.

If this is the first you’ve heard about these particular events, now would be a good time to take a deep breath. The sky is not falling, the world is not ending. Whistler-Blackcomb will open on or before schedule, Ullr will bless us with copious snow, we shall slide downhill, literally, while all things economic continue to slide downhill figuratively.

Chapter 11 is a safehaven where overstretched companies go to try and reorganize their business. It allows them to conduct business as not quite usual while they work with creditors on a go-forward plan. Sometimes companies emerge more or less intact; sometimes they don’t. When they don’t — and even sometimes when they do — valuable assets of the company get sold off to raise cash so that what’s left of the company can celebrate a future instead of a past.

Whistler-Blackcomb, is a very valuable asset, both to Intrawest and to Almighty Fortress. It is even more valuable to all of us. We are family.

Whistler-Blackcomb was, for years, Intrawest’s cash cow, giving nourishment and succor to its subsidiary brothers and sisters, downstream and up. I’m certain it has continued to play that role for Fortress but having gone private, I can’t cite chapter and verse on its actual financial performance and I’m not interested in fueling the kind of speculation I’ve been hearing about its cash flow and return on capital. Let’s just say in the Intrawest world, Whistler-Blackcomb is the team’s MVP.

So let’s play one of my father’s favourite games: What if? What if current global financial conditions make it impossible for Fortress to renegotiate Intrawest’s debt? What if it seeks the protection of Chapter 11? What if its reorganization results in the need to sell off assets? What if Whistler-Blackcomb is one of those assets?

Ski resorts aren’t like factories. They don’t get dismantled and have their parts sold off to other manufacturers. Their only value is as a going concern. The Peak 2 Peak gondola isn’t worth $53 million as either scrap or an amusement ride somewhere else. Someone buys ski resorts to run them.

Who would buy Whistler-Blackcomb?

How about us? You and me? Your neighbour and mine? The people who own property here, the people who wish they owned property here, the people who love to ski, bike, golf, hike and simply be here?

One hundred and twenty miles north of Milwaukee, Wisconsin, Lake Michigan dips into a little backwater bay — Green Bay. The town of Green Bay is, let’s be generous here, unexciting. Other than the National Railroad Museum, there’s only one reason to go to Green Bay, the Green Bay Packers. The Packers are one of the most storied franchises in the National Football League. Ever wonder why they’re in Green Bay? Ever wonder how a town of 100,000 — the smallest TV market in all of major league sports — manages to hang on to such a valuable franchise?

The answer to the first question is history. The Packers were founded in 1919 when the country was smaller and Green Bay was a meatpacking hub. The answer to the second question is unique in all sportsdom. The Packers have 112,088 owners! None of them have control. A majority would have to agree to sell the franchise to another city. Hell’ll freeze over first.

In 1923, looking bankruptcy in the face, the Packers became a non-profit corporation with 400 shareholders, townspeople. Lest you think this is a quaint, historical anomaly that couldn’t happen today, the Packers last stock sale — 1997-98 — brought in 106,000 new shareholders and raised $24 million. Their shares don’t trade, pay no dividends, can only be sold back to the company for a fraction of their purchase price and don’t give the owners a break on tickets. Yet, shares are owned by people in all 50 states and several foreign countries.

Why do people buy them? Believe it or not, pride of ownership.

History may be offering us a unique opportunity. Companies are strapped, credit is tight, buyers are few. What if the collective “we” could organize a bid for Whistler-Blackcomb? Imagine the publicity. Imagine the firestorm of pride across Canada, among our American Friends of Whistler, the hopelessly addicted from the UK, Australia and elsewhere in the world who love to come to this place. Collectively, we may be able to do what companies can’t do in this market. Collectively, we may be able to secure our future and keep the corporate sharks swimming elsewhere.

A pipedream? Maybe. But if we’re going to dream, let’s dream big. Maybe this opportunity won’t materialize. Maybe it will. Maybe some of you with biz and finance smarts would like to explore this pipedream with me. You know how to reach me. Ain’t no time like right now to be dreamin’ big.