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Mountain News: Mammoth purchases proof of profitability



MAMMOTH LAKES, Calif. — In the 1970s, Mammoth Mountain led North America in skier days, despite being 560 kilometres from Los Angeles and with not much of an airport.

After that, it got bumped by Vail Mountain and then Breckenridge. Now, backed by the investment capital of Starwood, Mammoth is flexing its muscle again, purchasing Bear Mountain and Snow Summit, which are located about 160 kilometres east of Los Angeles.

But why would anybody want to buy ski areas after drought in three of the last four years and a warming climate? The Los Angeles Times noted that skier visits dropped as much as 45 per cent last winter as compared to the previous season.

"We are dealing with a climate-change market," Bob Roberts, who runs the California Ski Industry Association, told the Times. Roberts pointed to a new push by ski area operators to generate profits by developing year-round activities, such as zip lines and mountain bike trails.

"Consolidation is allowing larger resorts to rethink the mountain recreation business," he said.

Roberts didn't mention Vail Resorts, but Rusty Gregory, the chief executive of Mammoth, did. He told The Sheet, a newspaper in Mammoth Lakes, that this addition of two new ski areas allows Mammoth to better compete with Vail Resorts for customers from Southern California. He also hinted at trying to draw destination skiers from elsewhere in the world.

Now, one bundled ski pass of $689 provides access to the three ski mountains plus June Mountain, Mammoth's kid sister. The pass is cleverly being marked as a "Cali4nia" pass.

Another $389 will provide the advantage of the Mountain Collective, a pass good for 14 additional days of skiing at Aspen/Snowmass, Jackson Hole, Alta/Snowbird, Whistler, and Squaw Valley and others.

Vail's Epic Pass offers skiing privileges at five ski areas in Colorado, two in Utah and two in California plus smaller ski areas in the Midwest and a few days in Europe.

Gregory spoke of "exciting new development and expansion plans" for each of the four ski areas, but did not elaborate. The four ski areas currently have altogether about two million skier days per winter, about 60 per cent of those at Mammoth and June Mountain.

Michael Berry, director of the National Ski Areas Association, said he sees the California consolidation as further evidence of the profitability of ski area operators and another step in the ski industry's vertical integration.

"Most of the 470 or so ski areas are more profitable now than they have ever been before," he told Mountain Town News. He cited an industry average of 21 to 22 per cent EBIT (earnings before interest and tax), a measure of profitability.

Berry further tells MTN that he expects the vertical integration of the ski industry of the last 10 to 15 years to continue. "The players might change. The companies might change. But the industry has been ripe and will continue to be ripe for consolidation," he said.

He said the most attractive ski areas for purchase will be those medium-sized ski areas, some of them family owned, near major population centres or with strong transportation connections. With their proximity to the 18 million people in the L.A. metropolitan area, Mammoth's two new acquisitions certainly fit that profile.

As for summer activities, "They are not a huge factor, but rather an important factor" in reducing the need to borrow money during the slow months of summer and fall, Berry said.

Vail Resorts has also downplayed summer activities. Blaise Carrig, the president of the company's mountain division, told Mountain Town News last year that winter revenues are "dramatically greater for our company, and they always will be."

Next Tarantino flick to be filmed near Telluride

TELLURIDE, Colo. — The storyline of Quentin Tarantino's next movie is set in Wyoming but, in fact, it will be filmed in Colorado, 16 kilometres west of Telluride at a ranch on Wilson Mesa.

The Denver Post reports that the movie, called The Hateful Eight, will be filmed starting on Dec. 8.

Set in the early 1870s, the film tells what happens when a collection of bounty hunters, Civil War vets and — well, this is a Quentin Tarantino movie — scoundrels descend on a small Wyoming town.

Colorado is paying a $5 million subsidy for the movie production, which has a $44 million budget. The crew is to be housed in Telluride and take a break over Christmas.

Actors rumored to be attached to the film include Kurt Russell, Samuel L. Jackson, and Bruce Dern.

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