The Pellucid Perspective - June 2011 - (Page 14)

WARRIOR GOLF The Warrior Way By Jim Dunlap Golf club marketer mines customer lists for course ownership investors he rising tide of bankruptcy proceedings seemingly swamps another golf course owner daily, as a tsunami of debt service, operating expenses and declining play make course ownership increasingly problematic. A growing number of owners would happily sell, but today’s lenders blanch at the word “golf,” and potential buyers find it necessary to write a large check from their own funds to get into or add to their own golf course business. Enter Warrior Golf and Warrior Custom Golf CEO Brendan Flaherty. Flaherty has discovered that there is not only strength, but feasibility in numbers when it comes to buying golf courses in today’s economic environment. Utilizing a combination of mass marketer hucksterism and solid business acumen, Flaherty has mined a database of what he says is between 400,000 and 500,000 golfers to round up different groups of relatively small investors with enough combined financial clout to purchase golf courses with very little debt, most of which is taken back with reasonable terms by the former course owners. T CONDITIONED FOR SUCCESS. The golf landscape in America has changed. In a market overcrowded with golf courses and little prospect for demand to grow significantly, today’s course owners and operators are experiencing extreme competitive pressure in nearly every aspect of their business. Never before has there been more reason to work smarter and more efficiently—or more reason to partner with ValleyCrest Golf Course Maintenance. As the national leader in golf course maintenance contracting, we’re a trusted steward of all manner of golf properties throughout America. 24151 Ventura Boulevard Calabasas, CA 91302 (888) 406-GOLF Comprehensive Golf Course Maintenance When Warrior and its latest group of investors purchased Cimarron Golf Resort in the Palm Spring area from lender Textron for a reported $4.5 million in May of this year, the buy upped Warrior’s portfolio of owned courses to eight, all acquired in the last three years. Irvine, Calif.-based Warrior is not just shopping in its own backyard, either – its collections of individually formed LLC’s own two in Texas, two in Florida, two in North Carolina and one in South Carolina in addition to Cimarron. Flaherty, who has been described by associates as someone who could sell ice to Eskimos and sand to Arabs, said the secret to Warrior’s ability to acquire courses in a challenging financial environment is twofold, and simple. The mailing lists developed through his mail order and telemarketing-based custom club business provide prospects who are at least pre-qualified by an interest in golf, and if enough can be enlisted to come up with the majority of the course purchase price, and the seller is willing to finance the remainder, the rest is details. “They’re all customers of ours and avid golfers who have envisioned owning a golf course some day,” Flaherty said of his fellow investors. “Normally, we figure out what a golf course will cost us, what it will cost to do the work on it that it needs, and then sell shares in the ownership, based on what each individual can put in. We have small notes on some of them, but they’re mostly 70 to 75 percent paid for.” The majority of the courses that Flaherty and Warrior have purchased thus far are public or semi-private, and relatively modestly priced. It is also no accident that Warrior’s courses seem to have been purchased in geographic pairs, since the visions of Flaherty and his golf course properties chief, Walter Bolen, include “some type of co-membership” for members at Warrior properties. Art West, who has brokered five of Warrior’s course property buys through his Golf Course Advisors business, said the secret of Flaherty’s success is Warrior’s database of potential investors, plus the willingness of sellers to finance a portion of the purchase price, eliminating the need for Flaherty and company to secure outside financing. “To my knowledge,” West said, “ [Warrior] hasn’t had to secure any institutional financing, which is hard to come by these days. Brendan is a very, very creative guy. He’s a little bit of a loose cannon, but he’s a marketing guru.” Guru or not, there is no doubt that the marketing approach Flaherty has instituted in his golf club business is nothing if not persistent. Golfers in Warrior’s database receive frequent offers of clubs to “test,” or deals on custom clubs. The volume of promotional messages and offers has, perhaps invariably, resulted in enough customer complaints that the California Better Business Bureau has given Warrior an “F” rating, which is exactly what it June 2011 14 The Pellucid PersPecTive

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

The Pellucid Perspective - June 2011
PGA, USGA Back Adams’ ‘Tee It Forward’ Initiative
The Price Is Right
Acushnet Transaction—Big Deal?
Reality Setting in for Course Buyers, Sellers
May 2011 YtD Weather Impact, Apr 2011 YtD Utilization
San Francisco/Oakland, CA Core Business Statistical Area (CBSA)
The Warrior Way
Comings & Goings
A Step ‘Forward’ for Golf?

The Pellucid Perspective - June 2011