Tuesday, March 26, 2002
Try as we might, it is hard to find a positive spin to put on American Skiing Co.'s decision not to sell the Steamboat Ski Area.
The company's stunning announcement Tuesday that it is selling Heavenly Ski Resort to Vail Resorts Inc. and that the Steamboat deal is dead surprised just about everyone, including Tim and Diane Mueller.
The Muellers, owners of Okemo Mountain Resort in Vermont, thought they were buying Steamboat for $91.4 million. In fact, Tim Mueller was in New York Tuesday, ready to begin the process of closing a deal he and his investors worked months to put together, when he got a phone call telling him he had been spurned in favor of a slightly sweeter deal.
Tim and Diane Mueller are respected in New England for the work they have done turning around Okemo Mountain. By all accounts, they are smart and capable ski area operators. And when it was announced in February that Triple Peaks, the group of investors led by the Muellers, had won out in the bidding for Steamboat, the Muellers were welcomed with open arms.
They said all the right things. They promised to be ski area operators, not Realtors. They promised to invest $10 million in the first two years in needed improvements such as replacing the Sunshine lift. They had realistic expectations about growing Steamboat.
But now the couple that Steamboat so eagerly anticipated as its new owner is out and a company teetering on the verge of bankruptcy is back in.
Over the past seven weeks, American Skiing has taken hit after hit. First, the company's stock performed so poorly that the New York Stock Exchange threatened to delist it. On March 6, with ASC shares trading at 26 cents, American Skiing was booted from the NYSE.
Then we learned liens on ski area property were holding up the sale of the ski area. And last week, the company confessed it was in serious danger of defaulting on several large loans if it didn't get an infusion of cash in a hurry.
To some degree, we watched these crises as detached observers, reasonably comfortable in the notion that a deal was done. Any day, the Muellers would sign the papers to take over the ski area, so ASC's problems were not really Steamboat's.
But as of Tuesday, ASC's problems are again Steamboat's problems. CEO B.J. Fair says ASC has no plans to offer Steamboat to another buyer. Like it or not, it appears we're stuck with each other. For Steamboat, that's not a very comforting thought.
No doubt, ASC will try to mend fences with the community. But the company's past performance and current condition don't lead us to have much optimism that its efforts will be successful.