A margarita on the rocks … with a dash of Rusty

Mammoth Mountain Ski Area (MMSA) CEO Rusty Gregory has proved more than once he has the gift of gab. On Monday night at Gomez’s, he put that gift to good use, participating in a Q&A MC’d by The Sheet’s Ted Carleton, in which he fielded questions from Carleton and the audience for about 90 minutes.

Gregory began the Q&A with a relatively short speech, in which he addressed the Mountain’s difficulties in recent years, and expressed his hope that the new acquisition of Bear Mountain and Snow Summit would ultimately drive Southern California business back to Mammoth.

“2005 to 2006 was the biggest year Mammoth ever had,” Gregory said. But, after the recession and a series of drought years, “It’s amazing any of us are still here, quite frankly,” he added.

Gregory noted that skier visits dropped from the peak of 1.6 million in 2005-2006 to 850,000 last season. Nevertheless, he touted MMSA’s continued investment in the Mountain: $85 million in capital improvement projects in the past eight years.

On the other hand, the Mountain’s also paid down $55 million in debt over the same period.

“It’s very painful to do that at times when we’d much rather put money into chairlifts,” Gregory said.

But what about the $38 million the Mountain spent buying Bear Mountain and Snow Summit?

Gregory argued the merits of that investment, calling MMSA’s competition with resorts like Vail and Aspen over Southern California markets “to the death.”

“With Bear Mountain and Snow Summit, we’re re-penetrating the Southern California market,” he said. According to Gregory, the two ski areas see a combined 800,000 visitors a season.

“They’re also a great weather hedge for us,” he said; “They do great in drought years.”

Carleton pointed out that Bear Mountain and Snow Summit are not, however, competitors with Aspen and Vail; Mammoth is. How would their addition to MMSA’s “family” help Mammoth itself compete?

“I think we can best compete with others for the SoCal market by creating a bigger database of people who  live in SoCal,” Gregory replied. “This creates an opportunity for us to talk directly to them.”

Bear Mountain and Snow Summit will be perfect for quick day or weekend trips, Gregory said; Mammoth will remain the destination for vacations and longer-term visits. Getting Southern Californians hooked on skiing closer to home, then getting them to ski more often, “will add to both results,” he said.

But why buy Bear Mountain and Snow Summit when there’s still so much work to be done at Mammoth Mountain, on Eagle, Canyon, and Main Lodge? Carleton asked.

“The Ski Area needs to spend $50 to $60 million on the Mountain,” Gregory agreed.

Gregory said such improvements would be dependent upon the success of Bear Mountain and Snow Summit, and the revenue those resorts generate.

John’s Pizza Works/Outlaw owner John Mueller pressed Gregory for details abut plans specifically for Main Lodge, Canyon, and Eagle. “Main Lodge is a tear down … You have a tent at Chair 15, and Canyon Lodge was built in the ‘70s,” he said. “We’re not going to be able to compete with Vail, Aspen. What are your plans for the future?”

Gregory argued that the Mountain is already competing with Vail and Aspen. Seven years ago, he said, “The average visitor to Mammoth made 11 percent more than people who went to Vail.”

Then again, that was seven years ago.

Realistically speaking, Gregory said, “The first thing we need to do to put money into the infrastructure is to make enough money to finance that, and we can’t do that when our business is cut in half [to 800,000]. We’re going to capitalize business around Big Bear … It’s easier to attract financing to a larger company than a smaller company.”

Eagle Lodge is the Mountain’s next major project, Gregory said. “We’re hoping to get approval for a 135-room hotel next winter,” [in addition to building Eagle Lodge].

Of the three lodges, Main Lodge has the most uncertain future, as MMSA continues to await Senate approval of the land exchange between the Mountain and the U.S. Forest Service.

Gregory said he thinks Congressional approval could occur before the end of the calendar year. After that, it will take “approximately a year to complete the transaction and own the land,” and another year to plan changes and go through the Town approval process.

Given all the money Gregory is talking about investing into MMSA, “How about a couple million for J1 [at June Mountain]?” asked Carleton.

“We’re back on the path that we put June on [before the drought],” Gregory replied. He reported that June Mountain recently received approval from the Forest Service to drill for new snowmaking wells.

“Snowmaking and a chair up the face go together,” he said.

Speaking of snowmaking, and the possibility that the drought will continue, how much water does the Mountain have to make snow at MMSA this year?

“We don’t know when we have it,” Gregory said; “We know what happens when we don’t. We’re concerned about it.”

He said that over the last three years, one of the Mountain’s five snowmaking wells has gone from producing 3,000 gallons per minute to 1,000 gallons per minute. “What happens if we have another year of drought? I don’t know,” Gregory said.

Given the challenges the drought presents to winter activities on the Mountain, why is MMSA backing down from summer activities like the Mud Run and Mammoth Festival? asked Carleton.

“We had a lot of competition in urban areas for [the Mud Run],” Gregory said. “We think there’s better ways to bring people here than that … We’re going to focus on building the infrastructure for other activities,” like zip lines, mountain coasters, kids summer camps, and the mountain bike park, he said.

Back to winter: “What is the thought process behind lift ticket pricing, and why is it stagnant rather than dynamic?” asked Town Councilman Colin Fernie.

Elusive MMSA Chief Marketing Officer Erik Forsell was on hand to reply. The Mountain is “definitely looking into moving [ticket] prices,” he said. He noted that Vail already adjusts its prices, making pre-sale tickets less expensive than tickets purchased at the counter. “Vail punishes you for walking up to the counter. It’s going to take a while for customers to get used to that [here]. We’re gradually stepping into that, but we think that’s the future.”

Another question from the audience: With all this talk of Southern California, why not market to the Bay Area?

“I think that’s a great opportunity, but we need to crawl, walk, then run,” Gregory said. The Mountain is aiming for Southern California first, “We’ll shore up that base, and move beyond,” he said, as far as Chicago, Dallas, and the United Kingdom.

One of Carleton’s final questions: “According to a study in [Forbes?] CEOs typically lose their effectiveness after five years. Why [do you consider yourself] the exception?”

“They haven’t found anyone else interested in the job,” Gregory quipped.

In all seriousness, he added, “This is a very daunting challenge. Mammoth is the only world class, year-round mountain resort that hasn’t happened yet.”

That said, “You’d be hard-pressed to find anyone in the room who believes in the Mountain more than I do,” he said. “I should be judged by my performance. If it snows this year, you’ll see what I can do.”

Gregory’s Q&A session ended to applause. “I really appreciate the applause,” he said. “It’s been eight years since I heard that.”