Time for Snoweaters to Put Money Where Mouth Is!

Whistler based pundit Michel Beaudry has consistently created a ‘commercial tension’ if you will between the moneyed interests that run Whistler Blackcomb and the “snoweaters” tribe who are the proper guardians of core ski and mountain culture. Well, snoweaters may get their chance to  voice how things at Whistler Blackcomb are run, if enough of ’em pony up to purchase shares in a new IPO (initial public offering). According to a story in today’s Globe & Mail, ITW is considering spinning of its gold medal asset to retail and institutional investors in the form of a publicly traded company.

Buried two thirds of the way down the paragraph is the key nugget of information: “The assets slated for inclusion in the sale process include the leases on the hills, the lifts, parking lots and lodges. The bigger real estate developments around the resort are not part of the package, sources said.”

An IPO for WB could be every snoweaters dream – even if they don’t have a penny to put towards it.  Here are three reasons why – 1) new majority owners with deep pockets and a local connection – and there are plenty of ’em out there in the Vancouver area – won’t be looking to turn a quick buck the way that Fortress Capital was. In fact, they may run the place more like the owner of a sports team – not terribly interested in making a huge profit, but providing a nice, clubby atmosphere for like minded people to ski and re-create (can you say “Sun Valley?”) 2) Due to both the Olympics and, well, the damned good skiing and riding, Whistler’s reputation is sky high amongst the ‘snoweater’ core and – far more importantly – the wealthy young entrepreneurs who want to hang with the bros n pros. 3) Whistler is year round mountain resort. Though often disparaged in the local press, the Peak2Peak is truly an engineering marvel and will prove its worth once tourism bounces back (lower summer prices for riding the lift won’t hurt, either).

Before you phone up your stockbroker or open an online trading account, it’s worth looking at ITW’s history as a publicly traded company. Even when ITW was flush with assets and selling real estate out within minutes of announcing a new project, it was not giving shareholders a decent return on investment which is why Fortress Capital bought it in the first place – during the go-go years of resort real estate in 2003 – 2007, they believed that more blood could be wrung from a stone than ITW was producing. One challenge ITW has always had with investors is determining its valuation – there aren’t many companies around quite like it. By taking real estate deals – not that there are many of THOSE happening these days – out of the equation, WB will have to make a profit on its core operations – lifts, lodging, ski school, and commercial/retail.

Ski and snowboarding numbers are flat – and in the case of visitors from south of the border – downright dismal. So while it may seem like half of Vancouver is there on a crowded Saturday, your fellow Vancouverites aren’t stayin’ and payin’ like those rich Californians did back in 2001 or so, when WB was winning all of those awards.

Alas, I’m in the ‘buy’ camp for one big reason. Vail Resorts – WB’s largest competitor – has seen its stock TRIPLE since March of 2008 during the trough of the crash. It’s trading in the $40 range right now, and though American skiers are more cost conscious, Vail is not a cheap place to ski. Their CEO Rob Katz definitely thinks that the worst is behind them; which can only be good for the resort business generally.

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