Top Five Fridays: April 26, 2024
Lead Image: Ryoyu Kobayashi, on his way to set a new world record for ski long jumping. Image: Red Bull Media Pool
#1: Ski Jumper Ryoyu Kobayashi Soared for Nearly 1,000 Feet, But the FIS Was Unimpressed:
Hello, and welcome to Top Five Fridays, the April 26, 2024 edition! We’ve got a good one on our hands this week as we start with a highlight that we find particularly exciting, before diving deep into the worlds of Alterra and Vail, and finally rounding things out with news of a legendary unretirement. We’ll share the details about all of those stories shortly, but before we do, we desperately want to talk about Ryoyu Kobayashi (who’s presumably unrelated to Takeru Kobayashi, the hot dog eating champ).
For those of you who caught last week’s Top Five Fridays, you might’ve watched our final edit of the week, which showcased a somewhat mysterious, massive long jump being built into the natural landscape of Iceland. In that video, a local to the region happened upon the build while flying his drone one day, and logically deduced that it must be the makings of a Red Bull sponsored long jump, likely with the goal of breaking the world record. As it turns out, that deduction was spot on.
This week, Japanese long jumper Ryoyu Kobayashi put the massive long jump to the test, and ultimately sent himself 291 meters through the air. For us Americans, that’s 955 feet. Over three football fields. In the air, just soaring like an eagle. Perhaps even more impressive than the distance, is the fact that Kobayashi was in the air for roughly 10 seconds. Honestly, it’s the kind of feat that’s hard to give justice to with words - you really have to just watch it for yourself. It’s truly jaw dropping.
Interestingly enough however, the story didn’t end when Kobayashi touched down. While the jump measured in at nearly 40 meters further than the FIS world record of 253.5m, the organization was quick to say that Kobayashi’s record would not be recognized by them. Their reason for withholding the record was in part due to the fact that, “A ski flying competition must be based on a FIS-certified distance measuring system and take place on a ski flying hill homologated by FIS in order to stand up to comparison with other flights and be eligible for an official ski flying record. “Additionally, “ the entire project [is] tailored to a single athlete and therefore ultimately to a single jump/flight.” To be fair, the FIS does have a point in terms of not recognizing the record as an FIS record, but it’s hard not to notice the bitterness in their messaging when it includes statements such as, “FIS hopes that the necessary precautions have been taken to ensure the safety of the athlete and FIS is excited to see Ryoyu Kobayashi in the upcoming FIS World Cup season competing for the official FIS world record.”
At the end of the day, whether or not the FIS is willing to embrace it, Kobayashi just accomplished something absolutely amazing, and a true feat of athleticism. Regardless of the FIS’s position, we’re personally huge fans of the effort. To learn more, check out the writeup from CNN.
#2: Billion Dollar Upgrades, Climate Change, and Ticketmaster: Taking a Deeper Dive into Alterra CEO Jared Smith’s Recent Appearance at This Year’s Mountain Travel Symposium:
Alterra CEO Jared Smith (left) chatting with Colorado Sun co-founder & reporter Jason Blevins (right) at this year's Mountain Travel Symposium. Image:Mountain Travel Symposium on Facebook
Alright, highlight one was maybe a little too fun, so let’s get back to business. Those of you who joined us last week definitely caught our coverage of recent comments made by Alterra CEO Jared Smith regarding the delicate balance of pricing in the ski industry. Unfortunately, Jeff and Bob were unable to join us last week because Jeff was getting a Blizzard Fantasy Factory tour in Austria, so they were unable to add their thoughts to the topic. The good news though, is that we have even further insights into Smith’s thoughts and comments this week, as it turns out that the Q&A that was cited was actually a conversation with one of our favorite ski journalists: Jason Blevins of the Colorado Sun. As such, that publication has just printed the entire conversation, allowing us to take an even deeper dive into Smith’s comments. We’ll do our best to cover some of that depth here, but we’d also highly encourage you to give the article a full read as it provides really valuable context for the statements made by Smith.
While the conversation itself covered a ton of ground, one of the overarching takeaways we got was in regards to the value of businesses like Vail and Alterra. In the world of skiing, it’s no secret that plenty of skiers bemoan the loss of independent ski resorts (which, we’ll remind you, make up a vast majority of ski areas in the U.S.). Those moans are certainly valid, of course, but in reading Smith’s comments on the value of multi-resort businesses, we have to acknowledge that their business model is incredibly valuable to the ski industry as well. In short, the argument is ultimately this: due to the seasonality and complexity of the business, a singular ski resort can only have so much impact. In a bad year, a ski resort might only operate for 3-4 months, meaning they offer limited value to investors and can only do so much in terms of offering solutions for climate change. In other words, their voices are small. By banding dozens of resorts together though, under one umbrella, two things happen.
First, investors care. Now rather than having a seasonal business making modest income, a company like Alterra can make a compelling argument for investors to get involved as the value of their business isn’t just tens of millions of dollars, but hundreds. With solid investment coming in, and the benefit of securing 25-30% of revenue ahead of each season, Alterra has been able to invest an eye-popping $1.5 billion back into its resorts over the past 6 years. That investment has manifested itself as snowmaking upgrades, new chairlifts, the opening of new terrain, and plenty of other infrastructure updates that directly benefit skiers. While there’s something to be said about the charm of independent ski areas, there’s also something to be said about the quality of “high end” resorts - particularly for those just entering the sport.
The second factor involved with having a bigger voice was a bit of a surprising revelation to us. When we cover ski news, we read a lot about how ski resorts are striving to be carbon neutral, and how seriously they’re taking their role as stewards of the environment. In the Q&A with Smith though, he said something that caught us off guard: “truthfully, we could be carbon neutral tomorrow at every one of our mountains and it wouldn’t matter at all.” It was a shocking message to read as ski resorts are constantly touting their efforts to become environmentally friendly, and we always assumed that it made a difference. Fortunately though, his very next comment expanded on this thought and gave us a bit of added insight. In regards to Alterra’s carbon neutral efforts, Smith said, “We have to do those things because it’s the right thing to do to give us credibility and to go advocate for commonsense legislation and regulation around climate change writ large.” In other words, when you go to an Ikon resort and you hand the person at the trash counter a tray full of miscellaneous garbage so they can sort it out, they’re not really doing that because putting your trash in the trash and your compost in the compost is going to save the world. They’re doing it because it gives that resort credibility, and therefore Alterra credibility, so when it comes time to advocate for environmental policies on a scale that far exceeds the ski industry, they have the ability to do so. There’s no “we hear you, but look in the mirror, your resorts are contributing just as much,” retaliation in those conversations. In a way, it’s like the kids say: Smith is playing chess.
In addition to these insights, as well as the ones we shared last week regarding providing affordable options to first time skiers and riders and the differences between Vail and Alterra, there’s a wealth of additional information and insights in the full Q&A. How ski resorts are similar and dissimilar to running ticketmaster. The complexity of operating ski resorts. Whether or not Alterra will ever go public. Why Alterra secured a “$3b single asset vehicle” and what that even means. The list goes on and on. If you’re someone who’s got an interest in the business side of ski resorts, and are fascinated by business strategy in general, we’d highly recommend giving this recap from the Colorado Sun a read.
#3: In Q2, Vail Reports a Drop in Skier Visits With an Increase in Earnings:
Despite a mild start to winter, Vail is still reporting increased revenue through Q2 of their fiscal year. Image: Vail Mountain on Facebook
As luck would have it, our third highlight is a perfect continuation of our second highlight. While we assume most of you haven’t clicked through to that Colorado Sun article yet, if you did, then you know that the piece concludes with the line, “Smith, laughing: As the CEO, I would love to continue to be able to see Vail’s numbers and not show ours.” As serendipitous as it is, Vail’s numbers are exactly what we’re sharing next.
This week, as a publicly traded company, Vail released their Q2 earnings report, which covers November, December, and January. In that report, Vail shared the news that while skier visits were down in Q2, their revenue from lift tickets was up as compared to a year ago. Now, before we jump to any conclusions, let’s break this down a bit and examine some of the factors at play. First of all, as we all know, the first stretch of the season was particularly dry for just about all of North America. Whistler Blackcomb, in particular, saw a decrease in snow and therefore a significant drop in visitation to start the year. So, there’s no need to panic, skiing isn’t dying, we just had a mild start to the winter and the numbers reflect that. Now, in terms of revenue being up, the gut reaction might be to say, “well of course it is, lift tickets are hundreds of dollars per day.” While that’s certainly part of the equation, the real factor here goes back to the pre-sale notion, where Vail secured 25-30% of their annual revenue ahead of the season. Looked at through that lens, it’s pretty easy to see how revenue could be up while visitation is down - the money came in before the weather did. Here’s the dark cloud though: this year’s reduced visitation could impact next year’s revenue, as less skiers engaging with the sport could lead to a loss of interest. While it’s too soon to know for sure, early signs suggest that Vail remains on track going into the offseason, with the report from Ski Mag saying, “pass sales are slightly down from this time last year, but pass revenue is already up,” according to Vail CEO Kirsten Lynch.
While scanning ski news headlines this week, we came across another piece of Vail financial news that came across as a bit of a yellow flag. In a report from Yahoo! Finance, we learned that Baron Funds, an investment management company, dropped its position in Vail Resorts in Q1 of this year. While that hedge fund, “may revisit Vail at a later date,” they’ve decided to reallocate funds to, “to other real estate-related companies that we believe may offer superior return potential,” in the immediate future. In other words, what this boils down to for us is that while there’s no need to panic, those working for Vail are almost certainly experiencing elevated stress at the moment. With visits down in Q2 and signs of the stock market losing interest, Vail is going to have to make some strategic moves in the months ahead if they wish to remain the titans of the ski industry for years to come. For more on this, check out the Yahoo! Finance article.
#4: Marcel Hirscher, Arguably the G.O.A.T., Announces His Return to Ski Racing:
Despite a mild start to winter, Vail is still reporting increased revenue through Q2 of their fiscal year. Image: Marcel Hirscher on Facebook
Finally, our last highlight this week very well could have been our first, but after a couple of denser, more industry heavy topics, we wanted to end on a more exciting note. That note, as it turns out, is the news that ski racing legend Marcel Hirscher has announced his plans to return to the FIS world cup. Now, if you’ve just started following the sport in the last couple of years and only vaguely know the name, we’ll give you a pass as Hirscher retired back in September of 2019. Prior to that though, he was an absolute force to be reckoned with, and is widely regarded as one of the G.O.A.T.s of the sport. Amongst his laundry list of accolades are accomplishments such as 6 slalom crystal globes, 6 giant slalom crystal globes, two Olympic gold medals, an Olympic silver medal, and 67 world cup victories. The pinnacle of his achievement though is a record that holds to this day, and one that Shiffrin is actively chasing: Hirscher is the owner of 8 FIS overall crystal globes. Not only that, but he did it in consecutive years. Now, after taking five years off, Hirscher has announced his plans to return to the sport.
Despite being a legend in the sport, and arguably the greatest ever, Hirscher’s return won’t be as straightforward as simply rejoining his Austrian teammates in his old locker room. In fact, he doesn’t plan to rejoin them at all. Instead he’s decided to compete for his mother’s native country, the Netherlands. While that may come as a bit of a surprise and certainly begs the question of, “why?”, there's actually a very thoughtful reason behind the decision. When Hirscher was pondering a comeback, the Austrian Ski Federation (ÖSV) was essentially willing to roll out the red carpet for him, as you might expect. Hirscher though, being a man of deep reflection, decided that he didn’t want to be the type of athlete who retires, comes back 5 years later, and ultimately robs resources and opportunities from younger athletes who’d been working hard to fill the void he left on the team. As such, he decided to opt for a fresh start with the Dutch team.
In addition to the paperwork required to switch teams, Hirscher also needs to re-earn enough FIS points to qualify for the World Cup circuit. As such, he’ll head to New Zealand this fall to begin competing in FIS races with the hope of earning enough points to rejoin the circuit this winter. If all goes to plan, Hirscher simply hopes to be able to compete at the 2025 World Championships. For him, this return isn’t necessarily an effort to reclaim the throne - rather, it seems as though the man just misses racing and wants to compete again. For us, it provides a very intriguing storyline to follow this offseason and into next year as we wait and see how much gas the G.O.A.T. has left in the tank. For now, we’ll send you over to the official announcement on the FIS website, and this article from SkiRacing.com to learn more.
#4.5: Red Bull and Jesper Tjader’s “Unrailistic” is Underway. We’ll Bring a Full Recap Next Week:
Before rounding out our written coverage this week, we just wanted to include a quick note letting you know that Unrailistic is currently underway and already producing some absolutely mind blowing footage. We’ll circle back next week with a full recap, but wanted to make sure it was on your radar in case you want to follow along. The event is likely playing as we hit publish on this piece, and you can watch it on the Red Bull site if you catch it in time. Otherwise, we also recommend checking out the Downdays Instagram account as they’ve been posting an endless amount of clips to their story.