Federal involvement might be the solution to a serious financial dispute over the owner of Whistler Blackcomb, according to a major U.S. newspaper.
“Things may have gotten so bad that only the Canadian government can save the day,” the New York Post recently reported.
At issue is the financial future of debt-laden Intrawest. Negotiations between two hedge funds -- Davidson Kempner and Fortress Investment Group -- have staggered to a halt, according to the Post.
Fortress bought Intrawest for US$2.75 billion in 2006. In recent years, both companies have struggled. Fortress’ stock value has plunged 75 percent since early 2007, Bloomberg news agency reported last month.
And the New York-based hedge fund was a major player in Vancouver’s Olympic Village controversy.
Intrawest nearly went bankrupt in October 2008, but a last minute financing deal saved the day. Only months later, the Tyee reported that further problems were likely.
Intrawest is now overdue on a US$524 million debt payment. A group of lenders led by hedge fund Davidson Kempner is negotiating a deal. But Fortress wants to keep some control over Intrawest.
According to the Post, Davidson Kempner has rejected the proposal.
What does this all mean for the 2010 Winter Games? For the time being, nobody's sure.
“Worries about Whistler's financial parent have put the resort itself under a cloud, amid fears that Intrawest's problems will dampen the mood at the events,” the Post reported.
Geoff Dembicki reports for the Tyee.
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shepsil
2 years ago
Once the "black hole" of skiing in westen N. america!
When Whistler the resort was in its heyday of success (1985-1999) it was called the black hole of skiing by industry types. This because it had the reputation and ability to suck skiers from other established ski areas. A good part of that ability was due to the development that took place. High speed lifts, new ski runs and of course condos, shops and restaurants. But the always accepted strength of Whistler was the snow. It was long considered heavy, coastal powder or elephant snot, but it was snow. In our coastal rainforests, snow was one thing that could be counted on to cover up everything. No so in the Rocky Mountain resorts, where the snow was light & fluffy, but not as dependable year after year.
In recent years, Whistler/Blackcomb (WB) was considered by many to be the flagship of IntraWest, because it got that snow more reliably than any other IntraWest ski area. The argument that is likely going to made to whomever might decide to bail "Whistler/Blackcomb" out, is that in a normal year it more than pays its way and that IntraWest has been using WB as a cash cow to support its other ventures.
If Whistler/Blackcomb is bailed out by our tax dollars to support the 2010 Olympics, then it should at least be under our ownership in the future. As in, a Canadian owned entity that we benefit from.
freebear
2 years ago
I want a bail out!
Why can't i get my student loan forgiven?
I am sure it would be a boon to the economy and my retirment savings!
Corporate welfare!
So much for the capitalist hand of the market deciding whether a company is solvent!
brewster789
2 years ago
three words...
Sink or swim
Bailey
2 years ago
Half a billion dollars??!?!!
Man, that's a mountain of debt!
Hard to imagine how a ski hill, or even two built on mostly parkland could be that far in debt, without some kind of looting or siphoning off of revenue.
Granted, the sky hook tramway that they built between two peaks 4 or 5 kilometers apart must have cost a fortune, especially compared to a ground based bus shuttle that would have done the same job. But still.
Half a Billion dollars is a lotta $80 lift passes. Six million, five hundred fifty thousand of them.
Hard to imagine a bank who would lend that much to a revenue stream that size. Or maybe not so hard, given recent revelations about banks and bankers in general.
alive
2 years ago
those were the days.
Yup David Lewis said it well: "Corporate Welfare Bums"
Every time private enterprise moves in we the taxpayers lose.
When Cypress was run by the government x-country skiing was free and the slopes well maintained, and there was always firewood in the warming huts.
Now the emphasis is on profit and skiers are treated as sheep.
Whistler Blackcomb was great back when one could afford to go there, since it has become an exclusive place for people with more money than brains.
crankypants
2 years ago
Bailout mania
It never ceases to amaze me how all these movers and shakers in the business world tell us how they have their fingers on the pulse and know best how to run a business, and then all of a sudden find themselves up to their eyeballs in debt and then scramble to find a saviour. They, in all their supposed wisdom, got themselves into these problems and it is not up to the taxpayer of any country to bail them out.
Hughes
2 years ago
If Fortress/IntraWest cant' make a go of it...
how could the proposed Jumbo resort make a go of it, unless of course, in the back of the developer's mind, there's the prospect of -- yes -- a government bailout.
Jeffrey J.
2 years ago
2010 Olympics: Pride Goeth Before Fall
So many of us have felt sickened by the way the Olympics were forced down our collective throats. Reading UBC Prof. Chris Shaw's Five Ring Circus proves how VANOC made a mockery of our democracy. But...but...but...
None of the above could ever equal the giant vortex descending on this event. A perfect storm of hubris, greed, corporate incompetence and government meddling is triangulating onto the date February 11, 2010. And none of it caused by the courageous citizens who tried to critique the methods behind VANOC and the IOC!
How odd. How prescient. How ironic.
In the end, if one or more of these corporate entities fails, it will actually be sad. For the athletes, who Prof. Shaw explains are victims, not the cause. For fans, and kids, and families who love sport. For many, many people. Will those in positions of authority and power ever admit responsibility for failure? It would be interesting to call a bookie and get the odds.