The Week That Was, july 14, 2013

     In an attempt to shore up its bottom line, ClubCorp is going public. The nation’s largest owner of private golf properties aims to raise up to $100 million in an initial public offering, money that the Wall Street Journal says would be used to pay off debt, including “a one-time payment” to its owner, KSL Capital Partners, “in connection with the termination of a management agreement.” It sounds as if KSL, which expects to maintain its majority control, will be the big winner here, at least in the short run. So is ClubCorp’s stock worth buying? Well, the company has a portfolio of 102 well-regarded golf properties (80 of them company owned) with more than 82,000 dues-paying members, and it also owns other city, business, and sports clubs that generate substantial income. According to a filing with the Securities & Exchange Commission, however, ClubCorp’s golf properties lost 15.5 percent of their members in 2011 and 16.5 percent in 2012. Overall, the company lost $26 million last year. And that debt it wants to pay off? It amounts to $781.5 million. When it comes to an investment in ClubCorp, an investor should hope that past performance doesn’t guarantee future results.

     This will come as a surprise to absolutely nobody, but Dubai Holding has officially pulled the plug on its Tiger Woods-designed golf course. Not a grain of sand has been moved for Al-Ruwaya Golf Club since 2009, and construction was officially halted in 2010. For his trouble, though, Woods pocketed a staggering $55.4 million, and Arabian Business reports that he was to receive an additional $14.6 million when the course opened. Nice money if you can get it. These days, six mostly completed holes are out there somewhere in the desert, gathering dust.

     Peter Harradine, a course designer with an office in Dubai, thinks that the prospects for golf development in the Middle East “have definitely improved” but won’t likely ever match what they were before the Great Recession. “Much of it was commercially unsustainable,” he said in an interview with KPMG’s Golf Advisory Practice. “The fees were crazy. The construction was crazy. The returns, even in the good days, would never have warranted that type of expenditure.” If the Middle East expects to thrive as a golf market, he believes, it needs to divorce itself from residential development and start building affordable tracks that can generate indigenous growth. “For the overall good of the game and business,” he says, “we need more people to be playing golf in the developing golf countries.” No doubt, building a sustainable golf industry isn’t as easy as Harradine suggests it is. But as the Middle East has discovered, there’s a limit to how far wealthy home buyers, fickle tourists, and fly-by corporate executives can take us.

     The friendly persuaders at Troon Golf have convinced city officials in Indian Wells, California to cough up $2.25 million for improvements to the ailing Indian Wells Golf Resort. The resort, which Troon has managed for three years, isn’t profitable, and the city desperately wants to end the losses before it’s bled completely dry. So it’s decided to spend money to make money. “We are on a path literally to failure,” the city’s mayor pro tem, Ted Mertens, acknowledged to the Desert Sun. The financial request was part of a five-year strategic plan that Troon believes will help the 27-year-old resort stand on its own. “We’re really happy the council approved our plan and look forward to making the resort profitable,” the resort’s general manager, Steve Rosen, told the newspaper. Troon plans to spend the money on a new banquet center, renovations, and a marketing campaign that will promote the resort’s to-be-created new name.

     Mike Keiser is going to pay through the nose for the right to build a municipal golf complex south of his property at Bandon Dunes. For 280 acres of state-owned land in the Bandon State Natural Area, the Oregonian reports, Keiser has agreed to give up 208 acres near Bandon Dunes and to pay the state as much as $3.25 million. The Oregon State Parks & Recreation Commission plans to spend $300,000 of Keiser’s money to remove gorse from some of its property in the Bandon area and to spend the rest of it on land purchases, primarily a 6,100-acre spread in Grant County that will become a state park. On top of all that, Keiser is obligated to pay for the design and construction of the planned Gil Hanse-designed, 27-hole complex that the state will own. The recreation commission hasn’t yet determined whether this transaction constitutes an “overwhelming public benefit,” which it must do to be approved. It appears to be on track to decide in September.

     Billy Casper Golf is making its presence felt in Winter Haven, Florida. Just weeks after it took over management of the former Lake Region Yacht & Country Club, a private property, BCG has accepted an offer to manage the city’s Willowbrook Golf Course. The five-year contract is one of dozens that BCG has made with municipalities since the onset of the Great Recession. “What we bring to 71 municipalities,” Douglas White of BCG told the Lakeland Ledger, “is the ability for them to get out of the subsidy business and to start putting money into reserves.” The city, which is facing a $3.7 million budget deficit, will pay BCG at least $84,000 annually plus bonuses. It expects to save only $200,000 over the life of the contract.

     As his taste in golf design evolves, Donald Trump is winning new friends. And chief among them is Gil Hanse. “The thing about Donald Trump is that he is passionate and knowledgeable about golf,” Hanse said in an interview with Sport360. “I have been teased a lot that his aesthetics does not necessarily match the one that we portray, but at the core, like us, he wants good golf.” Hanse is working for Trump in both Florida and Dubai, so it’s safe to assume that he doesn’t want to bite the hand that feeds him. Still, two years ago nobody could have predicted that Hanse would get even one commission from Trump, let alone two. “It is an odd partnership, in that we are very opposite,” Hanse concedes. “But at the core, he loves golf, and that is something that is sometimes lost on people.” This unlikely partnership has improved Trump’s image. What’s it done to Hanse’s?

     In September, the most beloved golf course in Phoenix celebrates its 50th birthday. It’s Papago Municipal Golf Course, which was once so popular (110,000 rounds annually) that golfers camped out overnight in their cars to get a tee time, as they do at Bethpage Black. Billy Mayfair learned to play golf there. Movies and television commercials have been shot there. The good old days have long passed, but the Billy Bell-designed track still has dazzling desert vistas and continues to offer a challenge worthy of a Publinks championship. Papago will soon have a private-sector manager, and I’m willing to bet that it’ll be marketed as the crowning jewel of Phoenix golf.

     My search for stars who might popularize golf among young people continues: Last week, heart-throbs Harry Styles and Niall Horan -- they’re the stars of One Direction, the immensely popular British boy band -- were photographed playing a round at National Golf Club of Canada in suburban Toronto. I’m thinking they could be a nice fit for an advertising spot, seeing as how golf has a While We’re Young campaign and One Direction has a song called “Live While We’re Young.” Do you think Styles and Horan could convince teenage girls that golf is cool?