The Pellucid Perspective - January 2011 - (Page 14)

THE LAST WORD Year of change for golf, for better or worse? may not mark the rising tide in the U.S. and global economies that would raise all golf industry boats just yet, but there are signs that the industry will see change, for better or worse. There have already been a couple of interesting developments in the golf course management and equipment sectors of the industry (Acushnet and Yes! Golf to name two), and the clock is reportedly ticking more rapidly on the long-awaited deployment of private equity and private investment fund capital accumulations. Whether that capital ends up finding a home in golf course portfolios, equipment OEMs or significant trophy asset properties is grounds for conjecture, but rumors of itchy check-writing fingers are growing ever louder. A couple of the more publicized funds, both of whose originators have a strong presence in the golf industry, are the $1.5 billion KSL Capital III fund that ClubCorp owner KSL Capital is putting together and the latest fund originated by CNL, which will be called CNL Diversified Lifestyle Properties and will begin selling in April. Its acquisition targets will include some additional golf course properties which will then be run for the REIT by third party operators. And, of course there are always rumors of [primarily Asian] foreign capital stockpiles just waiting for the right time to plunge headfirst into golf ’s swirling waters, hopefully more successfully than some earlier investments on the U.S. golf course and real estate fronts. On the management company side, the year’s big news to date has been the return of company founder Dana Garmany to the driver’s seat for the day-today operations of mega-manager Troon Golf. Or, more accurately in terms of news, the dismissal of CEO Hud Hinton which precipitated Garmany’s return to daily management of the company. Hinton, Garmany’s hand-picked successor 2011 who joined Troon in 1999 after a lengthy career in the hotel industry and took over as CEO when Garmany stepped down to recover from some health issues in January 2010, is no longer with the company, and Troon officials, including Garmany, have been mute about the reasons for Hinton’s departure. (I hate to disappoint the number of industry acquaintances who have contacted me on the assumption that I would know the “scoop,” but I haven’t been able to penetrate the Scottsdale Curtain so far). Changing courses The golf industry climate has created some sea changes in management company strategy. Some management firms have ramped up new staffing, re- On the management company side, the year’s big news to date has been the return of company founder Dana Garmany to the driver’s seat for the day-to-day operations of megamanager Troon Golf. sources and marketing efforts in order to take advantage of the burgeoning number of properties whose reluctant new lender-owners need professional managers. Traditional golf lenders like Textron, Capmark and GE Capital, as well as local lenders who have had to foreclose on course loan defaults, more and more frequently opt to keep their reclaimed courses open and maintained for a hopefully higher future sales price, rather than dumping them in a foreclosure auction for pennies on the dollar or closing them and allowing them to lie fallow. Sequoia Golf Management, the parent company of the successful Canongate chain of primarily reciprocal access private clubs, is one such company. While Canongate’s model has traditionally revolved around club ownership, CEO Joe Guerra and his team are now marketing their operational expertise to lenders to “caretake” their foreclosed properties. It was recently announced that Capmark has employed Sequoia to run the Bull Valley Golf Club in Woodstock, Ill., after the private equity firm Carlyle Group returned the course to the lender. In another interesting development, Scottsdale-based management firm OB Sports has teamed up with a number of Las Vegas-areas courses to form a Vegas golf marketing and tee time booking web site, The interesting component is that OB Sports is not only marketing and booking tee times at the Angel Park and Legacy courses it runs, but is putting co-op dollars into site efforts which also promote and book times at other Vegas courses including Rio Seco, Cascada, Siena, Red Rock, TPC Las Vegas and Bears Best. The site also offers room packages at a number of Vegas casino resorts, and uses inbound and outbound call centers to promote Las Vegas as a whole as a golfing destination. In other OB Sports news, the company has joined other management firms including, most notably, KemperSports (Kemper/Lesnik) and Billy Casper Golf (Buffalo Communication), in creating its own outside marketing division called SquareFace Marketing. As with the others, the plan is for SquareFace to not only serve the marketing needs of its parent company, but also provide an additional revenue stream through contracted services to other clients. These days, it doesn’t hurt to hedge one’s bets with some additional action in the game. —Jim Dunlap 14 The Pellucid PersPecTive January 2011

Table of Contents for the Digital Edition of The Pellucid Perspective - January 2011

The Pellucid Perspective - January 2011
Municipal Courses Face Major Property Tax Challenge
Dec YtD Weather Impact, Nov YtD Utilization
2011 Equipment News Highlighted by Acushnet Fate
Is Groupon Good for Golf?
Symposium Examines Varied Aspects of Affordability in Golf
Dallas, Tx Core Business Statistical Area (CBSA)
Yes! Golf the Recession’s Latest Victum
Year of Change for Golf, for Better or Worse?

The Pellucid Perspective - January 2011