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Alterra, nearing its fifth birthday, settles in

Let’s sum up the news in one paragraph: on Aug. 1, Jared Smith, who joined Alterra less than a year ago after 18 years at Live Nation, will succeed Rusty Gregory as Alterra CEO. Gregory will step into a vice chairman of the board role as a “senior strategic advisor,” director, and company shareholder. I’ll spare you the press release quotes: everyone is thrilled with the opportunity. Let’s take a look, instead, at nine questions Smith will need to address as Alterra, the second-largest company in skiing, girds for its long-term fight with Vail Resorts, finicky skiers, and planet Earth.

1) Can a ski-industry outsider manage the anti-Vail?

Gregory was the ultimate industry insider, a college football player-turned-liftie who worked at Mammoth for 40 years before taking the top job at Alterra in 2018. He’d been through the battles, understood the fickle nature of the ski biz, saved Mammoth from bankruptcy several times. Universally liked and respected, he was the ideal leader for Alterra’s remarkable launch, an aggressive and unprecedented union of the industry’s top non-Vail operators, wielding skiing’s Excalibur: a wintry Voltron called the Ikon Pass. That such disparate players – themselves competitors – not only came together but continued to join the Ikon Pass has no doubt been at least partly due to Gregory’s confidence and charisma.

Smith came to Alterra last June after 18 years at Live Nation and Ticketmaster. I don’t know if he even skis. He is, by all accounts, a master of building products that knit consumers to experiences through technology. That’s a crucial skillset for Alterra, which must meet skiers on the devices that have eaten their lives. But technology won’t matter at all if the skiing itself suffers. Alterra has thrived as the anti-Vail, a conglomerate with an indie sheen. Will the Ikon Pass continue to tweak access levels to mitigate crowding? Will Alterra continue its mega-investments to modernize and gigantify its resorts? Can the company keep the restless coterie of Boyne, Powdr, Jackson Hole, Alta, Taos, A-Basin, Revelstoke, Red, and Schweitzer satisfied enough to stay united on a single pass? For Alterra, and for the Ikon Pass, these are the existential questions.

2) Will Alterra go public on the stock markets?

This is more of a nerdy Finance Bro question that comes up every time Gregory travels to New York and sits down with some suit on CNBC. When will Alterra join Vail Resorts (ticker MTN) on the public stock exchanges? When can we all, in other words, have a piece of this radness?

We have no indications that such a move may be forthcoming, but Smith should be comfortable in this world should Alterra choose that direction. He’s a businessman first, having led Ticketmaster as it merged with Live Nation, a publicly traded company. While the history of U.S. ski companies on the stock exchanges is a kind of financial Antietam, exemplified by the disastrous tenure of the American Skiing Company, Vail has proven that a pass-first business model is a winner: MTN stock is up more than 1,000 percent from the company’s 1997 IPO (initial public offering).

From a ski-writer point of view, an IPO would bring welcome transparency to Alterra’s business. We currently have no idea, for example, how many Ikon Passes the company is selling, or whether the company is making or losing money. For skiers, an IPO would likely mean an infusion of cash that could translate to Alterra buying more mountains and/or investing more into the ones it already owns. It would also mean more pressure from short-sited investors to make money at the expense of the on-mountain experience, an impossible tightrope that is Vail’s constant bane. My guess is that the company will go public, and that hiring Smith was part of the long-term plans to do so. I don’t see any big rush, however – Alterra seems to be doing great with the partnership model it has built around the Ikon Pass, in which much of the operations and financial burden of its alpha resorts is essentially outsourced.

3) When is Alterra going to buy more mountains?

Alterra’s last purchase was Sugarbush, announced in November 2019. That was only two and a half years ago, but for a company that slammed together Palisades Tahoe, Steamboat, Winter Park, Mammoth, June, Big Bear, Stratton, Snowshoe, Deer Valley, Solitude, Crystal, Blue Ontario, and Tremblant in the space of 13 months from August 2017 to September 2018, that’s an eternity. For a while, we could blame Covid for the lack of acquisitions, but lately ski areas have been shuffled around like bubblegum-pack baseball cards in the treehouse-and-free-range kids era. Just last week, Granite Peak and Lutsen owner Charles Skinner bought Michigan’s Blackjack and Indianhead ski areas. Vail bought Pennsylvania’s Seven Springs, Laurel, and Hidden Valley in December, and took a majority stake in Switzerland’s Andermatt-Sedrun in March. Boyne purchased Shawnee Peak in Maine last October. And on and on: Dodge Ridge, California; Blacktail, Montana; White Pass, Washington; White Pine, Wyoming; and Alpine Valley, Michigan have all gotten new owners in the past year. On a more dismal note, the owner of Song and Labrador last year bought and immediately shuttered nearby Toggenburg, New York.

Alterra, meanwhile, has been quiet, preferring, it seems, to grow the Ikon Pass through partnerships. Windham, Mount Bachelor, Red Mountain, Schweitzer, Sun Valley, Snowbasin, and three European monsters have joined the pass since the Covid Smackdown. The Ikon Pass roster is now objectively superior to Epic’s in nearly all measures, even as Vail has piled up 41 owned resorts to Alterra’s 15. The quiet acquisitions period probably has less to do with any reluctance on Alterra’s part to expand its owned portfolio than the reality that it has simply run out of things to buy. None of the recently sold ski areas listed above fits Alterra’s template of big-mountain trophy properties, and nothing else is for sale. Would Alterra like to buy Alta or Taos or Jackson Hole or Grand Targhee? I don’t have to ask them to know that the answer is “of course.” But no one’s selling. Perhaps, ironically, because of nascent business stability from that firehose of Ikon Pass cash pointed in their direction. I doubt that Alterra is done buying, but frankly it doesn’t really need to. The vast majority of the best non-Vail ski areas in North America have already aligned with the Ikon Pass, and they don’t seem to be in any hurry to leave.

Below the subscriber jump: more analysis of Alterra’s future, including their intentions in the Midwest, whether the company will diversify its portfolio beyond big trophy mountains, and whether it can fix the Ikon Session Pass. Plus a look at a dozen current or former ski areas for sale.

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