The Pellucid Perspective - May 2017 - 2

GOLF CLUB
MANAGEMENT

ClubCorp withdraws sale offer,
Affeldt to retire as CEO
By Jim Dunlap

I

t appears that it will be business as usual for the world's largest owner of private clubs at least for the time being, following last month's announcement that ClubCorp has changed
its mind about offering the publicly traded company for sale. After an unspecified number of well-heeled tire-kickers took a look
but decided that a purchase of the entire company would be too
rich for their blood, ClubCorp announced in mid-April that the
company will continue with its three-pronged strategy of organic
growth, property "reinvention" and additional club acquisitions.
That pronouncement was not wholly without news, however, as
the company announced that veteran CEO Eric Affeldt plans to
retire once the company's Board of Directors selects a new CEO,
likely later this summer.
Reached shortly before he was scheduled to be the featured
attraction at the dunking booth during the annual party for
ClubCorp corporate employees and their families at Brookhaven
CC recently, Affeldt said that after nearly 11 years as CEO, it
was simply time for a change as his 60th birthday looms later
this year.
"Like most public companies, we have a well established succession plan," Affeldt said. "After 10 years, you've either established your strategy or not and I believe we've been successful in
doing that. I'm a huge believer in term limits, and I think this is a
good time to move on. My dad died when he was 47 and I look
at that and think it's time to take time for family and maybe do
some other things that I'd like to do while I'm able. My handicap
has gone from 6 to 12 or 13 and I've got two granddaughters I'd
like to spend more time with. And, since I remain the largest individual stockholder in ClubCorp, as my kids remind me, I have
a vested interest in how the company is doing, so I'll be doing
whatever I can to ensure that shareholder value is maximized."
When Affeldt moved over from KSL Capital to become
ClubCorp's CEO after KSL purchased the company in 2006,
he described ClubCorp as "successfully stagnant." He recalls that
his first business cards in his new position listed him as "Catalyst
and CEO," which he felt best described his role with the company.
"My mission was to shake things up," he said. "That led us to
reinvention of the whole private country club model. We were
criticized by some people in the industry for having golf with
a small "G," but I'd like to think that my legacy would involve
changing the industry leader into some experience that appeals
to more than just golfers. I remember that one individual whose
background was the PGA Tour and the TPC properties came to
look at what we were doing and said, 'This is a category killer' because we were doing something much different than what other
golf and country club properties were doing at the time. To accomplish that, we've invested more than $700 million back into

2 The Pellucid PersPecTive

the business and I think we've changed the way private clubs are
viewed in many cases."
ClubCorp's initial decision to entertain offers for the company
followed a well-publicized letter from minority investor FrontFour Capital to Affeldt which praised the company's financial
performance at the property and portfolio levels, but bemoaned
the stock price performance. FrontFour claimed that their analyses of the stock indicated that it should be trading at around $27
per share, which was roughly twice the current stock price. They
blamed "communication issues" from ClubCorp to potential investors, among other things.
At the time of that letter, FrontFour stated that they controlled
3.4 percent of ClubCorp's outstanding shares. Affeldt, however,
debates that claim today, saying that FrontFour's holdings represent only 2 percent and adding, "You'd think that if they really
thought that the stock value was what they said it was, they'd be
buying more, but they're not."
As proof of ClubCorp's continued commitment to the "or-

When Affeldt moved over
from KSL Capital to become
ClubCorp's CEO after KSL
purchased the company in
2006, he described ClubCorp
as "successfully stagnant."
ganic growth, reinvention and acquisitions" tripartite strategy, the
company recently completed its fourth acquisition of 2017 with
the purchase of Oakhurst Golf & Country Club in Clarkston,
MI. Although the company's stock price has yet to fully reflect
it (although it has shown modest growth recently), Affeldt noted
that the company just had its best revenue and EBITDA quarter
in company history.
He remains convinced that not only is the private club industry not a dinosaur doomed by changing demographic preferences
and lifestyles as some suggest, but it is going through a metamorphosis that will lead to continued growth.
"Clubs have continued to evolve into family entertainment,"
Affeldt said. "As far as Millennials, we need to keep an eye on
where people are going and what they are doing. The biggest
thing to be aware of is that no matter what they're doing, they
want to hang out with like-minded people, and the club fits into
that perfectly."
n
May 2017



Table of Contents for the Digital Edition of The Pellucid Perspective - May 2017

TOC
ClubCorp withdraws sale offer, Affeldt to retire as CEO
Will TopGolf “Save” Golf?
EZLinks and TeeOff.com experience system outage
Mobile Apps and MAC Addresses: Is the golf industry paying attention?
April golf weather impact: Nice “bounce” to open northern season
April golf weather impact: Nice “bounce” to open northern season
Operators haven’t lost heart in San Francisco
Trolling for Millennials
The Pellucid Perspective - May 2017 - TOC
The Pellucid Perspective - May 2017 - ClubCorp withdraws sale offer, Affeldt to retire as CEO
The Pellucid Perspective - May 2017 - 3
The Pellucid Perspective - May 2017 - Will TopGolf “Save” Golf?
The Pellucid Perspective - May 2017 - 5
The Pellucid Perspective - May 2017 - EZLinks and TeeOff.com experience system outage
The Pellucid Perspective - May 2017 - Mobile Apps and MAC Addresses: Is the golf industry paying attention?
The Pellucid Perspective - May 2017 - April golf weather impact: Nice “bounce” to open northern season
The Pellucid Perspective - May 2017 - 9
The Pellucid Perspective - May 2017 - 10
The Pellucid Perspective - May 2017 - 11
The Pellucid Perspective - May 2017 - Operators haven’t lost heart in San Francisco
The Pellucid Perspective - May 2017 - 13
The Pellucid Perspective - May 2017 - Trolling for Millennials
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