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Seven Springs Acquisition A Family Affair

By
June 26, 2006

The deal was a corporate merger between the two families instead of a traditional sale of assets. Shares of stock for Seven Springs Farm property will change hands, but financial terms of the transaction were not disclosed. Seven Springs Communications Manager, Robert Duppstadt confirmed the deal but had no details.

"Seven Springs has always been a family-run, family-first destination," said Scott Bender, Seven Springs president and COO in a statement. "That focus will not change under the Nuttings." The current management team will remain in place and few changes are expected at the resort this season, said Bender. The resort has about 1,500 employees at its busiest time of the year and 800 year-round.

According to Duppstadt, the new owners are looking at a lengthy list of improvements and upgrades. "The Nutting family is committed to growing the resort and taking it to the next level," he said. Possible future projects include new chairlifts, expanded terrain and a water park.

Seven Springs, in southwestern Pennsylvania, had been run by the Dupres since 1932 and is the largest four-season resort in the state. Skier visits regularly top 420,000 a season and the entire resort brings in 1.2 million guests annually. Summer activities, including golf, and about 1,000 conferences, meetings and banquets each year add to the bottom line.

Covering about 5,500 acres, Seven Springs supports nearly 750 condo and rental units. An additional condo and hotel development, with about 200 units, is underway on top of the mountain.

Seven Springs was reportedly valued at $87.5 million in 1998 when Booth Creek Ski Holdings offered the Dupre family about $93 million. At the time, the family could not agree on terms of a sale and the offer was withdrawn. Subsequent legal wrangling and court rulings resolved the differences within the family and cleared the way for the sale.

The transaction must be approved by shareholders this week, and would take effect July 1. There are about 30 Dupre family members holding shares of Seven Springs.

The area's value could take a leap forward in the next few years. The resort is working to secure a gaming license from the state that would allow Seven Springs to operate 500 slot machines.

Robert Nutting, CEO of Ogden Newspapers and a part owner of the Pittsburgh Pirates, said in a statement that the family supports the pursuit of a resort gaming license but "the possibility of limited gaming did not play a major role in our decision to purchase the resort."

Seven Springs is the largest private employer in the region with more than $21 million in annual payroll and benefits, said Duppstadt. It is estimated that slot machines would create 355 new jobs and generate about $126 million a year.

But there may be issues with acquiring a gaming license in light of Nutting's ties to Major League Baseball, which has a firm policy of forbidding owners to have affiliations with gambling interests.

Nutting told the Pittsburgh Tribune-Review that he and the family are aware that there is the potential of a conflict of interest if Seven Springs is granted a gaming license but his primary commitment is to the Pirates.

The change in owners apparently won't have much affect on Seven Springs' neighbors. "I think if they get a casino license, that will have a bigger impact then who owns the resort," said Andrea Smith, communications manager for Snowshoe Mountain Resort in West Virginia.

"We see nothing but positives with the sale," said Keith James, spokesman for Hidden Valley Resort which is in the same county as Seven Springs. "They have great people over there and we have always had a great relationship. Having a new family as owners isn’t going to change those relationships."

Tim Prather, general manager of Wisp in western Maryland was also upbeat, saying that the Nuttings would bring a burst of renewed interest in skiing to the region. "We see Seven Springs as a friendly neighbor, not as a competitor. They bring skiers to the area and get them interested in winter activities. They may ski at their resort this year and then ski at ours next year."

Ogden owns 39 daily newspapers, several magazines, weekly newspapers and shoppers in 11 states. Among its newspaper holdings, 21 are within a four-hour drive of the resort.

-Bill Clapper-

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