Magic Ownership Change

TomWhite

ropeways.net | Home | 2015-08-20

Magic Mountain Announces Ownership Change

Deal is expected to close later this summer.In an August 18 Alpine Update, Magic Mountain announced season pass sales have been temporarily suspended so that an ownership and management change can take place.As originally reported on NewEnglandSkiIndustry.com on July 7, former Vice President of Marketing at Magic Geoffrey Hatheway formed Ski Magic LLC on May 6, 2015. Meanwhile, property owner Thomas Barker’s Magic Mountain Resorts, LLC, which operated the cash-strapped area during the 2014-15 season, was quietly terminated as a Vermont business entity on March 16, 2015. Magic Mountain remained in operation through April 18.Hatheway was Vice President of Marketing at Magic from June of 2011 through September of 2014 before departing for New York based Indelible Planet. According to his LinkedIn profile, the 1981 Dartmouth College graduate “[b]uilt record skier visit and revenue years in both 2013 and 2014 by uniquely positioning Magic as an enthusiast mountain with a retro, laid-back, community ski vibe” as head of marketing and sales.According to the Alpine Update, “the new owners will honor all season passes purchased this year,” and "[w]hen the purchase happens, the new company will offer new passes for sale at what would traditionally be “early bird” spring pricing as a way of thanking you for your patience during this transition [sic].“The Alpine Update goes on to state, ”[b]e assured that the new ownership group is committed to not only a purchase of Magic but a long-term investment in its infrastructure to improve your ski experience (more snowmaking and fully operational lift system)."Located in Londonderry, Vermont, Magic Mountain was originally opened in 1960-61 by Hans Thorner. In recent decades, the area has been plagued by financial problems, including a 6 year closure during the 1990s. Magic currently advertises a 1,700 foot vertical drop serviced by two chairlifts.Source: “NewEnglandSkiIndustry.com”

Remski

This sounds to good to be true. Hopefully their pockets are deep and they can obtain all their objectives for MAGIC MT.

mapnut

I like how they say Magic currently advertises a 1,700-foot vertical drop. As if they’re going to fix that soon.

Bill29

Quote: "… by uniquely positioning Magic as an enthusiast mountain with a retro, laid-back, community ski vibe" 

“Laid-back vibe.” Everybody remember how laid-back the discussions about Magic used to be on NELSAP back then. They were about as laid-back as WWII was, as I recall.

Bill29

I don’t know what happens to my posts, but that’s the second time in recent weeks that only  the first line has shown up after I send it. I referred to Mr. Hathaway’s attempting to give Magic a “retro, laid-back vibe.” I remember the NELSap discussions about the place as being about as laid-back as WWII was. (Let’s see how much of this makes it).

ski_it

Bill29 - you replying from a Mac or an I-pad?

abubob

<blockquote class=“Quote” rel=“Bill29”>This sounds to good to be true. Hopefully their pockets are deep and they can obtain all their objectives for MAGIC MT.</blockquote>

My thoughts exactly.

Bill29

ski it - no, I’m not on a mac or i-pad. abubob - I didn’t say it, remski said it. But I, too, agree.

Skizix

Geoffrey Hatheway knows what he’s got with Magic..  They’ve been on the right track with snowmaking repairs/upgrades, the lift and overall maintenance. They need to get more people aware they are open* and have good beginner/intermediate terrain too.* I am amazed that most people I mention Magic to think it’s still closed. Maybe about a dozen or so times a year when I’m talking-up Magic to someone on the chairlift they respond with phrases like “Are you sure? I thought they were closed.” Being the Faithful Ambassador that I can be, I resist responding with “No I’m not sure, maybe it was just a great ski dream I had.” ha-ha

joshua_segal

<blockquote class=“Quote” rel=“Skizix”>Geoffrey Hatheway knows what he’s got with Magic..  They’ve been on the right track with snowmaking repairs/upgrades, the lift and overall maintenance. They need to get more people aware they are open* and have good beginner/intermediate terrain too.* I am amazed that most people I mention Magic to think it’s still closed. Maybe about a dozen or so times a year when I’m talking-up Magic to someone on the chairlift they respond with phrases like “Are you sure? I thought they were closed.” Being the Faithful Ambassador that I can be, I resist responding with “No I’m not sure, maybe it was just a great ski dream I had.” ha-ha</blockquote>

It just shows how dangerous it is to suspend operations for a period of time.  I hear the same thing about Crotched Mt. and we’ve been back in business for over a decade.

I also find myself pondering: Why can Tenney Mt. find the deep pockets, but Magic, a far superior area, has continued to struggle.  If I remember right, Magic tried a “co-op like-thing” a few years ago.  I don’t know how many shares they sold but the intent was to get 300 people at $3K each.  Any word on what’s going to happen to them?

obienick

Joshua, I think they sold all 300 shares.  But from what I’ve heard, the shareholders in the coop are SOL.  Somehow behind the shareholders backs it was changed to a club from a coop.  Also, this is the 2nd ownership transfer in 2 years.

With respect to capitalization Magic vs. Tenney, it seems Magic is continuously passed between the same group of people.  Also reading between the lines, different people owned the mountain vs. operating.  Why would anyone invest in infrastructure even if they had capital.  This is the same problem faced at Blue Hills.

Magic needs a ground-up gutting.  Management gone. New owners including owning the property.  And $10M committed to a brand new snowmaking plant (well I’m sure the air lines are sufficeint enough since they’re at a lower pressure or you can piece together stuff to make air lines from old pipe) and a chair to the top, a chair along the Green Line, and a new bunny chair.  Without those 4 things, Magic WILL NEVER SUCCEED. 

I’m not saying they need 100% snowmaking with groomed boulevards.  But there needs to be 2 blue routes, a green route, and a black route at a minimum from the top with working snowmaking and grooming to attract customers as well as a significantly improved bunny area.  No one wants to ski one WROD over and over again over Xmas or MLK weekend if it’s a warm winter.  And you’re not going to get any beginners if all they can do is the pony lift and Trick.

How can you say that? This guy has been the VP of marketing.  Their marketing has instilled 0 confidence.  Heck, you even made the comment that people think the place is closed.  Also what does a marketing guy know about running a ski area? And where’s all this capital coming from?  Last year there was barely any money to rent air compressors.  This year the pass sales have been suspended and there’s promises of very cheap passes forthcoming.  How are they possibly going to open now?

Seriously, these guys can’t even fix their damn flag poles.  Why should I give them my money on a pass?

NewEnglandSkier13

I wonder what lifts will be running this winter…

riverc0il

<blockquote class=“Quote” rel=“joshua_segal”><blockquote class=“Quote” rel=“Skizix”>I also find myself pondering: Why can Tenney Mt. find the deep pockets, but Magic, a far superior area, has continued to struggle.  If I remember right, Magic tried a “co-op like-thing” a few years ago.  I don’t know how many shares they sold but the intent was to get 300 people at $3K each.  Any word on what’s going to happen to them?</blockquote></blockquote>

I believe the coop investors lost all their investment and had to write it off as “well, at least we kept them in business and making improvements”. It was never a real coop, it was trying to save a mountain. I believe the coop was less than majority in the management of the mountain, not in the ownership, or some sorta weird hair splitting thing. I am a shareholder at MRG but never considered the Magic option. Love the mountain but didn’t feel like making that large a donation.

I don’t think Tenney owners have deep pockets at all. They are not replacing the lifts, they aren’t blowing out snowmaking in a major way. It sounds like they were not going to replace the snow making compressors until they were forced to do so because they couldn’t get parts to fix the old gear. They do report fixing the snow making pond, so that is good. They cleared the trails which they had to do. They are upgrading the base area buildings, it had to be done. I appreciate their positive vibes and good will they are generating, but I don’t see very deep pockets. I actually don’t think their pockets are deep enough to make the place sustainable, I’m concerned they didn’t allocate enough funds to get it going for the long term.

obienick

Big projects so far at Tenney:

* All new grips on Hornet

* Completely refurbished grips on Eclipse

* 2x new controls

* VSD on Eclipse

* Gutted lodge

Re: snowmaking, seems the pipes are in great shape except no air to top third of Hornet (pipe was cut and welded shut in the valve house, WTF?) .  Building a 75% fan system. They are contemplating going all new pumps or refurb the diesel ones they have (1450 gpm) but one of the two lake-draw pumps (1100 gpm) was gutted by prior managment.

IMHO seems they are doing a heck of a lot more than Magic could dream of.

NewEnglandSkier13

Big projects so far at Tenney:

* All new grips on Hornet

* Completely refurbished grips on Eclipse

* 2x new controls

* VSD on Eclipse

* Gutted lodge

IMHO seems they are doing a heck of a lot more than Magic could dream of.

</blockquote>+1

newpylong

While there are no high speed quads going in now, none of the stuff Tenney doing is cheap and is very labor intensive (read: also not cheap).

I think they have the investors to spend the money but just want to get the place open this year first. The longer it sits the more unusable things become.

slatham

The issue with Magic’s ownership structure was having one group (Magic Mountain Management) own the land, while another entity (JLS=Jim Sullivan, MMR= Tom Barker) operating the Mountian. One thing this structure rules out is any hope of real estate development, which may be a driver at Tenney (speculating here). In any event, the new group at Magic plans to both own the land and operate the Mountian.

Regarding Hatteway, he ran marketing but had nearly zero budget. And yet skier visits quadrupled (ok, yes, off a low base, but they did get to break even). And of course he was not involved last season when marketing was less than nothing.

The key is that the new group, from what I can tell, really knows Magic inside and out; the good, the bad and the ugly. And they have a we’ll thought out plan that, if they raised the money they planned for, will IMHO put Magic on the otherside of breakeven with a much more robust offering by solving the many, well known, issues that have held it back.

But this is still Magic so there will be bumps in the road, especially getting everything done for this winter, which cannot really start until the deal closes. But I think this is one of the best possible scenarios for taking Magic forward and yet keeping its well loved “vibe” and uniqueness in place.

THINK SNOW!!

Skizix

Flagpole repairs? Not too worried about that. There’s a broken window in the base lift shed too. Knowing they are running on a shoestring budget, I am not as picky about the little stuff right now. By on the right track I mean that they did some relatively major repairs in the snowmaking system two summers ago when they fixed a bad leak. They painted, and managed to get the place looking decent. I agree the mountain needs the Blues and Greens well covered and groomed for the many. Snowmaking repairs, and expansion is priority #1! There is no reason to go to a ski area that does not have good trail coverage. They could do well to get away from the ‘too cool for school’ attitude that has come into play the last few years. Lifts break down. A western New England resort had to lift-evac skiers/riders due to a power failure last season. This stuff happens at the best maintained places. The issue with most people not aware Magic is open may have to do with the people with whom I talk-up Magic than Magic’s marketing. Still, I have been surprised by a few who seemed to be skiers that are “in the know.” I’m not a marketing person but some well placed billboard ads might help. They could dig deep and put an ad in a ski ragg. (?) The bottom line is being able to enjoy Magic.

NewEnglandSkier13

It looks like it isn’t going to happen at this point: http://www.newenglandskiindustry.com/viewstory.php?storyid=312