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Too Big to Vail

News in Park City has been skewed towards the fight between Vail Resorts (MTN), the city of Park City, and local businesses that include the “Park City” name. Some clever bastards even added a TM to Park City Hill (Bravo…For those about to rock…we salute you). Word even has it that the Chairman of Vail, Robert Katz, is flying in on Wednesday for a fireside chat.

Of course, that is all interesting. However, like a duck, what may be more interesting is what’s happening under the water.

We’ve started hearing rumors that some organizations are asking their personnel not to speak out against Vail. We aren’t insinuating that Vail is dropping the hammer and telling people to “shut up.” We have no idea where these rumored directives originate.

However, it does highlight a potential problem with companies that both dominate a town and an industry. Should they choose, these companies can wield significant power both directly and indirectly. Let’s take an example from a film that performed horribly at the box office and was generally panned by critics. Yes, the (now) Christmas favorite It’s a Wonderful Life. Remember Mr Potter, played by Lionel Barrymore. He was the banker that “owned” the town. No one ever dared to speak out against Mr Potter. No one ever dared to challenge him. He controlled Bedford Fall’s bank. He controlled the real estate. He controlled the businesses. The only person who ever stood up to him was George Bailey, and we see where that initially got him (the watery side of a bridge). Most people aren’t so lucky as to have a guardian angel give them a second chance.

Of course Park City and Vail aren’t a movie. Yet, that makes the stakes that much higher.

The first danger in Vail controlling too much of Park City is that they may have too much influence on local businesses. Many local businesses, that come to depend on Vail likely would place survival of their company ahead of “making smart choices for the town” when making decisions. Their Vail business becomes a dependency.

Likewise, local non-profits are in the same boat. If a company is providing tens (or hundreds) of thousand of dollars in donations to the non-profit, can members of the non-profit speak their conscious on matters important to the community (especially those where their opinion does not agree with their benefactor)? Let me phrase that a different way, “if you were the head of Park City Ed Foundation, would you ever speak out against Vail on the trademark issue? No!!!… Even if Vail was Mother Theresa, you’d be a fool to do that.

In many ways, we’re overstating the obvious. You don’t bite the hand that feeds you.

This isn’t a slag on Vail. If we were a MTN investor from New Jersey, who had never visited our little town, We’d likely want Vail to find a way to force Park City Municipal to change their name. Vail has a responsibility to its shareholders to maximize profit. We get it. It’s part of the game.

However, as members of the town, we have a vested interest in not allowing Vail to get so big that it can corrupt us. We have a responsibility to our fellow community members to not become so dependent that it prevents us from exercising out first amendment rights.

If Vail were to exit Park City tomorrow, the company would be fine. As we often state, they are the smartest guys in the room. However, the fear is that they stay, grow even bigger, become more intertwined in Park City, and force us to do things we never thought we’d do just to survive.

Having spent hours thinking about it, we’re not sure there is a good way out for our community. As individuals we don’t hold much power. That’s why it is good that Park City Municipal is involved (as long as they protect us and not just themselves). That’s why we wonder if there is a way for the community to replace Vail with regard to funding our non profits. That’s why we think our city and county economic advisors should come up with a way to help our local businesses who may decide to part ways with Vail.

We always think back to the story of Vlasic Pickles and Wal-Mart. The Vlasic story was near the beginning of the hate-Walmart movement (and perhaps with good cause). Walmart sold a gallon (a year’s worth) of Vlasic Pickles for $2.97. The money quote from this 2003 Fast Company article was:

“Indeed, as Vlasic discovered, the real story of Wal-Mart, the story that never gets told, is the story of the pressure the biggest retailer relentlessly applies to its suppliers in the name of bringing us “every day low prices.” It’s the story of what that pressure does to the companies Wal-Mart does business with, to U.S. manufacturing, and to the economy as a whole. That story can be found floating in a gallon jar of pickles at Wal-Mart.”

Or maybe this is the money quote:

“Finally, Wal-Mart let Vlasic up for air. ‘The Wal-Mart guy’s response was classic,’ Young recalls. He said, ‘Well, we’ve done to pickles what we did to orange juice. We’ve killed it. We can back off.’ “

In Vlasic’s case, they had many problems that led to their demise, not just Wal-Mart, yet their story is educational of how a smaller entity sometimes crumbles in the shadow of its overlord.

We in Park City are still in a good position. We have an excellent brand and we are still individuals. If Vail wasn’t here we would still be OK (some would argue we’d be better off). Yet, that may not be true forever …

It’s up to us, as community members, to determine how dependent on Vail we become. There are definite benefits to what Vail provides — and it’s not an all or nothing proposition. We just have to be cognizant of what letting Vail become TOO BIG of a part of our community means. We may choose that it’s worth it… but we need to make sure that decision is a conscious choice.

 

Comments

3 Comments

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Terry Moffitt

Well put. We have all heard rumors of the Vail takeover from the get go. We were warned by other towns and during the City tour of the influence and pressure they put on towns they move into. And I think most of us thought, nah, not us, we’re different, we’re special, we’re a real town with real people. This is a very interesting example of just how much pressure and sway they want and how little they are willing to back down.

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Parkrag

Thanks for the comment! I think you’re point about us believing “we’re different” is spot on. It’s never different. Especially when the “adversary” is good great at what they do.

It should be interesting.

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John Rex

You state in your piece here: ” Vail has a responsibility to its shareholders to maximize profit. We get it. It’s part of the game.” But it was not always that way. During the period from the end of WW II to the Ronald Reagan presidency, the predominate US corporate view was “Customers first, then employees, then community, and profits will follow.” It was about building and maintaining very long term relationships prioritizing people before money, and it was about corporations being committed citizens in a democracy. During that period the US underwent an unprecedented economic transformation that created the vast middle class with entirely new industries which thrived. Prior to that period the middle class was non existent – there were mostly poor people, and a few very wealthy ones. All that progress was reversed starting with an organized movement in the 1970s represented by voices such as economist Milton Friedman saying “Corporations have a fudiciary duty to their shareholders first and only”. (There is no basis in law supporting that position.) And St Ronnie cynically encouraging people to distrust their government, leading to voter apathy, which is an abandonment of democracy. Meanwhile organizations such as The Federalist Society were indoctrinating young legal professionals with an ideology that places corporate power above individual rights, and is now widespread among republican judges including the US Supreme Court. It has led to where we are today with wall streets’ obsession with short term financial performance (leading to lots of fraud and semi fraudulent business schemes, look at the tech industry for example, and the financial system operating like a casino) stagnant wages, loss of job related benefits, and an economy designed to transfer the wealth up to the few at the very top, and a disregard for pretty much anything that gets in the way of perpetuating that. Including democracy. Today money buys control of the government, leading to “too big to fail, too big to jail”. Vail’s behavior in Park City is modern corporate America at work, and should not be acceptable to the citizens here just because “It’s part of the game”.


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