Photo: Park City Mountain // Instagram
Park City Mountain is not for sale. But then again, everything has a price when you’re dealing with publicly traded companies and billionaires who see something they want. This is the conundrum anybody could have seen right through when former-ski-instructor-turned-tech-billionaire Matthew Prince told a local Utah news outlet he’d be interested in purchasing Park City Mountain from Vail Resorts back in May. Within days, Vail Resorts announced it was removing then-CEO Kirsten Lynch and reinstating longtime Chairman Rob Katz in her place, and Katz declared soon after that the Utah resort was not for sale.
“That’s not something we’re looking at and we don’t think that that ultimately is in the right, long-term interest of our company,” Katz said when he was asked about selling the resort. “A resort like Park City, of course, is critical to our overall company and our network.”
In a recent interview with the local Park City outlet Park Record, which Prince owns, Prince outlined a scenario in which a sale of Park City Mountain would become beneficial for Vail Resorts and its shareholders. Is he floating x’s and o’s to investors so they get antsy and soften up to the idea of a sale and a small bump in the value of their holdings? Whether that’s the case or not, Prince’s hypothetical scenario in which Park City eventually goes on the open market was broken down as a byproduct of Vail Resorts’ business model.
“There are two models in the ski industry, the Alterra/Ikon Pass model and the Vail/Epic Pass model,” he explained. “Alterra allows local ownership of the underlying resorts where the Ikon Pass works, like Snowbasin, Alta and Snowbird. Vail almost exclusively owns the underlying resorts and manages them remotely. The Alterra model is better than the Vail model both in terms of the experience at resorts and as a business.”
He then elaborated that Vail, as a company, would be worth more to its shareholders if it just simply sold its underlying assets. Vail Resorts’ current market cap is just above $6 billion. He says selling off assets like Vail Mountain, Whistler Blackcomb, or Park City Mountain individually would tally up to more cash than that, however, while Vail Resorts would still have the Epic Pass intact to create ongoing revenue for the company.
“I think that when you have a public company … where their underlying assets are worth more than the (market capitalization of the company), that creates a lot of incentive for activist investors to come in and say, ‘we’ll take a position to do that.’ Now, I’m not … in that business, but I’ve certainly talked to a lot of activist investors who are circling around Vail,” he said.
An activist investor is an investor that buys a significant amount of stake in a certain company, and works to influence how that company is managed to try and unlock more value and increase shareholder profit.
Prince then explained that if activist investors were so inclined to act on that incentive, he’d be ready to make an offer on Park City Mountain quickly.
“I’ve said, ‘Here’s the deal: If (an activist investor) were to take a position in Vail, I can, we can, very quickly find a way (for them) to get cash out of that by (me buying) the mountain,” he said.
