By Rob Cox
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
The ski business is amid a flurry – not of snow, but of deals. At the center of the action is Vail Resorts, a $3 billion publicly traded operator in an industry traditionally dominated by family and local owners. The company is upending winter-sports convention in a variety of ways. Chief among them is trying to prove that it can control the weather with some corporate finance.
Control may be an extreme interpretation, but Vail Resorts is pursuing a model designed to mitigate Mother Nature’s volatility, which has spelled doom for many a ski area. The extent to which it succeeds will determine the future shape of the North American skiing and snowboarding complex.
It’s instructive to understand why Vail Resorts, led by Rob Katz, is battling the elements. Though there has been consolidation – last month his company bought Park City, Mammoth acquired Big Bear and Ontario’s Blue Mountain was taken over – North America counts around 700 ski areas, ranging from sprawling resorts like Squaw Valley and Killington to dozens of suburban bunny slopes.
Most mountains are privately held. Vail Resorts is the big exception, owning a dozen top leisure spots including Vail, Breckenridge, Heavenly and Kirkwood near Lake Tahoe and Park City and Canyons in Utah. Whistler Blackcomb Holdings is a $630 million company traded in Canada. Intrawest Resorts went public last year and owns seven peaks, including Steamboat and Winter Park.