1996 – Vail’s owners acquire Breckenridge, Keystone

Peter W. Seibert
Courtesy Vail ResortsKeystone opened in 1972 as a modest-sized mountain with easy runs. Today Keystone encompasses three mountains, with ski terrain for every ability level and two separate base areas.

Marc Rowan, a founding principal of Apollo Advisors, laid down the company line:

“We’re going to complete Beaver Creek as planned, and we’re going to acquire Arrowhead, which would have happened long ago except that George Gillett and Issam Fares, owner of the area, never could agree on anything. We’re committed to the village-to-village skiing model and to the completion of Blue Sky Basin. We’re diversifying the company by building retail business with the Gart family [who developed the Gart Brothers chain of sporting goods stores] and by acquiring the Lodge at Vail and The Pines at Beaver Creek.”

And to my great joy, when the time came to bid for the 1999 FIS World Championships, Apollo’s new owners agreed with us old owners that we had to go all out to get them. And we did.

All of this was close enough to my old dream to give me a great sense of satisfaction and excitement. I had hoped that Vail Mountain would always be full of new surprises and new ideas. And damned if Apollo didn’t come through.

Then in the summer of 1996 Leon Black startled everyone with a bombshell business deal: a $310-million merger between Vail Resorts and Ralston Resorts, a ski-area subsidiary of the massive manufacturer of brands like Chex and Purina. This gave Vail Resorts control of Breckenridge and Keystone, our long-time rivals 30 miles closer to Denver, who had often siphoned off our customers.

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At about the same time, Black decided to issue an initial public offering, or IPO, of Vail Resorts stock. Business writer Christopher Byron produced a hair-raising report on Black’s move in the September 1996 issue of Snow Country magazine:

“In taking Vail Resorts public, Black’s cashing in on the so-called “IPO fever’ that has been sweeping Wall Street for more than a year. (But) the fact is, if one were to hunt the canyons of Wall Street for the worst conceivable investment, the ski industry would seem to fit the bill. It’s a seasonal business subject to the whims of weather. It labors under high capital costs and huge liability exposure. Its longtime customers are aging and its market is flat. And every effort to attract business by expanding terrain or building new resorts brings screams of outrage from angry environmentalists.”

It was a blood-curdling description of the ski business. Yet Black and Apollo remained positive about their plans for the future.

Editor’s note: This is the 67th installment of the Vail Daily’s serialization of “Vail: Triumph of a Dream” by Vail Pioneer and Founder Pete Seibert. This excerpt comes from Chapter 13, entitled “Heart of the Rockies.” The book can be purchased at the Colorado Ski Museum, as well as bookstores and other retailers throughout the Vail Valley.

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