Growing up in Central New York, home to the nation’s snowiest city, winter sports were a way of life. It felt like everyone in my hometown skied or snowboarded on the weekends. Kids at rural schools further north are known to ride their snowmobiles to school on occasion. Even Silicon Valley’s favorite car is no match for lake effect snow.
I was not much of a skier. My parents took me to the bunny hills a few times as a little kid, but the exorbitant cost of gear and lift tickets, the bitter cold, and the scheduling challenges of raising four kids amounted to slopes we just couldn’t shred. Once basketball and winter track practices began to eat into my winter weekends, I waved goodbye to downhill winter sports.
The few memories I have of skiing are from Toggenburg Mountain Ski Resort. Known by locals simply as Tog, single-day lift passes were sold for $62, and were discounted all the way down to $38 for the area’s many college students. No one is mistaking $62 for pocket change, but compared to the eye-watering $284 cost of a single-day pass at a world-renowned resort like Vail, Tog was a bargain.
You may have noticed that I used the past tense when describing the price of a Tog lift pass. This is not one of my many typos. Instead, the resort’s prices are given in the past tense because Tog was closed by its owners shortly before the 2021-22 ski season. It is nearly the end of the 2023-24 season, and Tog has not reopened.
In 2015, husband and wife John and Christine Meier, in partnership with businessman Marc Stemerman, bought the Toggenburg Mountain Resort from the Hickey family, who had owned and operated Tog since its opening in 1953. Two years prior, the trio had purchased Greek Peak, a significantly larger, year-round resort located about twice as far from Syracuse as Tog, so the acquisiton of Tog meant they were quickly becoming a big presence in the CNY winter sports scene.
The new owners worked quickly to maximize the value of their holdings, debuting a Greekenburg ski pass that allowed skiers to visit both Tog and Greek Peak at a discount over buying two passes. The Meiers further consolidated their wintry riches when they bought out Stemerman’s share of Tog in 2019, although it appears that Stemerman remains an owner of Greek Peak.
Consolidation is the name of the game in downhill winter sports, and there are no bigger players than Epic, offered by the public corporation Vail Resorts, and Ikon, offered by the private firm Alterra Mountain Company. The Epic and Ikon passes each retail for more than $1,000 and provide access to a combined 126 resorts across five continents. If you want to ski or snowboard more than twice per season at nearly any of the world-class resorts, from Lake Tahoe to Tsugaike Hakuba to the Matterhorn, buying an Epic or Ikon pass is the obvious financial decision.
Short of the Big One finally striking California and carrying me off to sea, we are not going to see new mountains created in our lifetime. The petrostates are trying, but a new mountain is something money cannot buy, which makes a ski resort the perfect natural monopoly. Once you own all the ski resorts in an area, your only competitor will be climate change.
American oligarch Warren Buffet once said “If you’ve got a good enough business, if you have a monopoly newspaper or if you have a network television station your idiot nephew could run it.” With this quote, he wasn’t just mocking a deadbeat relative; Buffet was outlining the investment strategy that made him such a financial titan.
Berkshire Hathaway, Buffet’s holding company and investment vehicle, is widely thought to be so successful because of its patience. And to be sure, the firm makes large, public investments in reliable, unsexy companies like Coca-Cola and Citigroup, often maintaining these positions for decades.
But while patience is undoubtedly a factor of his success, Buffet (and Berkshire) has made some of his largest profits by investing in companies with either natural or Buffet-created monopolies, such as the only major newspaper in Buffalo, the only company with authority to issue .com and .net domain registrations, and one of the two freight railroads operating in the western half of the United States.
Looking around at the state of the winter sports industry, the Oracle of Omaha likely wishes he had been born in a less flat state. Vail Resorts and Alterra — meaning Epic and Ikon — both have their roots in private equity, an industry built on monopolistic takeovers. Vail (the corporation) was spun up by Apollo Management in 1997 and run by former Apollo executives until 2021. Alterra is the brainchild of KSL Capital Partners.
Today, Apollo owns more than $500 billion in assets too numerous to list here. KSL, which is worth a pitiful $21 billion, owns 57 vacation-related companies, including at least 216 golf courses, 72 luxury hotels, 70 Orangetheory franchises, and the iFLY indoor skydiving chain. And each year, Vail and Alterra add new ski resorts to the Epic and Ikon network, further consolidating their control over the ski and snowboard resort market.
As a publicly-traded company, Vail has to report its fiscal performance, which is how we know the company sold 2.3 million Epic passes for 2022-23, leading to more than $800 million in revenue. As a private firm, Alterra does not have to release sales performance, but there were 64.7 million ski visits in the United States during the 2022-23 season, which is a record high, so it’s safe to assume Ikon passes are also selling well.
Central New York’s ski areas are too small to interest Vail or Alterra — for now. The companies preference for high-end resorts is illustrated by their decision to each add a resort in the Catskills, a downstate region frequented by wealthy New York City vacationers, to their pass network while ignoring the Olympic-quality Whiteface Resort in the more isolated Lake Placid region further upstate. But the absence of the industry’s two biggest players hasn’t prevented copycats from forcing their business model on the people of Central New York.
In 2021, just two years after buying out Stemerman, the Meiers sold Tog to a company called Intermountain Management. Crucially, Intermountain owns the only two other ski resorts in the Syracuse area, Song Mountain and Labrador Mountain. Meier Industries, John’s holding corporation, retained ownership of Greek Peak, which is the furthest from Syracuse
Soon after the sale closed, Intermountain announced the permanent closure of Tog. Locals were outraged, immediately forming a Save Tog group and starting a petition to preserve the beloved ski resort.
The New York state government was also unamused. In October 2022, New York Attorney General Letitia James sued Intermountain, alleging the company had created an illegal monopoly over Syracuse-area skiing.
Savory details have been revealed by the court documents. When she announced the lawsuit, James shared that John Meier had already settled with the Office of the Attorney General (OAG) for $195,000. It turned out that, as part of the sale of Tog, Meier Industries had entered into an illegal noncompete agreement with Intermountain whereby Meier agreed not to poach employees from Song, Labrador, or Tog for their work at Greek Peak. In addition paying a fine for this agreement, Meier also agreed to cooperate with the OAG during its proceedings against Intermountain.
Another critical revelation of the lawsuit is that, when defining Intermountain’s illegal monopoly, the OAG focused less on price and more on access to skiing. The OAG claims that the existence of Greek Peak is wholly irrelevant to its case, as Greek Peak is more than 30 minutes away from Syracuse, and their research found that most skiers will not buy a season pass for a resort further than 30 minutes from their home. According to the OAG’s review of internal Intermountain documents, just 7% of Greek Peak season pass holders originate from the Census-defined Syracuse area.
That being said, price is certainly a factor in the case. Much of the financial information submitted to the court as evidence is still under steal, but thanks to the Wayback Machine we can see that a Greekenburg pass was going to be sold for $600 for the 2021-22 season if purchased in the spring when prices are lowest. This is the exact same price Intermountain is currently charging for spring orders of a 2024-25 Labrador and Song joint pass, while Greek Peak skiers now have to pay $495 for a pass valid at just one resort.
Prior to its purchase by Intermountain, a Tog-only pass allowed holders three days of lift access Greek Peak. With spring pricing for a Tog pass as low as $375, the resort was by far the cheapest way for Syracuse-area skiers to give themselves access to two different resorts.
By shuttering Tog, Intermountain has given itself free rein to raise prices at Labrador and Song indefinitely, pricing out low- and middle-income ski and snowboarders, including the tens of thousands of college students who descend upon CNY each fall. Syracuse residents now have to drive further during wintry conditions to take advantage of the snow, their most abundant natural resource. And faced with rising prices, wealthier CNY denizens will leave the region entirely to ski, flying to megaresorts in Vermont or the Rockies and taking much-needed tax revenues with them.
In their latest court filing, Intermountain’s defense team argued for a summary judgment in their favor. The corporation’s defense appears to hinge on the claim that Greek Peak is close enough to Syracuse to prevent Intermountain from establishing a monopoly, a claim disproved by merely looking at Google Maps. After more than a year of legal posturing and three lost ski seasons for Tog, a trial has been set for March 18.
Whether the court sides with the state — which has requested that the court fine Intermountain $1 million and force the sale of Tog — or with Intermountain, the company’s greed has already caused incredible damage to Tog. The resort has been idle since spring 2021, causing significant deterioration to its antique fleet of ski lifts. And the town of Fabius confirmed that Tog’s special exemption to operate a ski resort on what would otherwise be zoned as farmland has expired since no skiing took place for more than a year, meaning potential new owners would have to contend with local bureaucracy before they could reopen the lifts.
Skiing and snowboarding are undoubtedly geared toward the wealthy, which can make it hard to sympathize with those affected by the actions of companies like Vail, Alterra, and Intermountain. But the skyrocketing prices of lift passes have broken the economies of ski towns, displacing generational residents and forcing resort workers to live in cramped dorms or commute more than an hour each way.
Perhaps most importantly, our nation’s natural resources should be open to everyone. After all, an Epic or Ikon pass is really just a lift ticket. Since most ski resorts, especially in the western United States, are on federal land, theoretically it is legal to hike up a trail yourself before skiing back down. Why not go further and nationalize the ski lifts already profiting off of public land?
When I told my family I wished Central New York offered more big city opportunities, the propensity for private equity to wield its financial power to crush beloved local establishments is not what I had in mind. Gutting a functioning newspaper, toy store, or real estate market, selling the parts for profit, and walking away is the other calling card of private equity, hand-in-hand with market monopolization.
And gut-and-sell is clearly a lesson Intermountain and the Meiers clearly learned well from their billionaire counterparts. Meier Industries and Stemerman paid $1.25 million for Tog, yet just six years later Meier was albe to turn around and sell the same resort for $2.25 million to Intermountain. Even after the $195,000 fine for the illegal non compete agreement, Meier cleared $805,000 in profit.
After letting the resort fall into disrepair and laying off 90 employees, Intermountain now claims to be open to selling Tog again, possibly for further gain. Meanwhile, the company has profited from the forced increase in traffic to Labrador and Song for three ski seasons running.
Buying a business just to shut it down is immoral, and closing off access to a natural resource like a ski slope is evil. Hopefully, on March 18, AG James will prevail. Perhaps her team can build on this experience and take on Vail and Alterra before they control mountains the world over.
Thanks to McCoy T. for suggesting this week’s topic. Did you know that premium IBT subscribers have the right to submit a request for a future post? Upgrade today with this special limited-time offer and see your idea brought to life.
Things I Enjoyed This Week
The Rise of the American Oligarchy | Mother Jones
Cape to Cairo -- by trains | Neil Shaw (YouTube)
Merrick Garland Must Go | The Nation
The Blogs of War | Wired
The world’s tallest flagpole. A tiny Maine town. An idea meant to unite people is dividing them | The Associated Press
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Thank you as always for reading!