The Week That Was, september 15, 2013

     ClubCorp Holdings has released details about its initial public offering, the headline being that the effort could bring it $300 million or more. ClubCorp will offer 10.9 million shares, according to an SEC filing, and its owner, KSL Capital Partners, will offer 7.1 million shares. At $17, the midway point between the issue’s expected $16 to $18 price per share, a sellout would raise $306 million. When all is said and done, KSL Capital will retain its majority stake ClubCorp, which the Dallas Morning News says owns and/or operates 152 golf, country, and other clubs in North America and also owns the real estate at 81 of its golf and country clubs. ClubCorp plans to use the money it raises to retire roughly $160 million in debt, according to a report by Law 360. In its 2012 fiscal year, the company posted a net loss of $27 million on revenues of $755 million. Had it not been required to cover $89 million in interest expenses, it would have shown a profit.

     Golf and housing -- is their relationship still on the rocks, or is there hope of a reconciliation? Henry DeLozier, who once developed golf communities for Pulte Homes, believes that the reinvigorated U.S. housing industry will have a significant influence on future golf development. “Developers and home builders, as they have for decades, will continue to view golf courses and country clubs as primary amenities for many of their projects,” he writes in an essay published by Golf Course Industry. Begging to differ, the Fiscal Times contends that the fortunes of golf-related real estate are on a “downswing” due to overbuilding, the high cost of maintenance, and other factors, including a growing preference for amenities such as lakes, hiking trails, organic gardens, and yoga centers. Its conclusion: “Experts believe that golf as a primary home amenity is in a decline that may be permanent.” Based on these conflicting views, can anyone predict where this marriage of convenience is headed?

     IMG Worldwide, the sports management and marketing colossus, is for sale and could fetch $2 billion. Forstmann Little, which reportedly paid $750 million for IMG in 2004, expects to begin reviewing offers later this month, and it’ll likely get several of them, for Carlyle Group, Bain Capital, KKR, William Morris Endeavor Entertainment, and Creative Artists Agency are said to be weighing bids. “We’re a market leader in almost every business we’re in,” George Pyne, the president of IMG Sports, noted earlier this year. Since a $2 billion price tag excludes many prospective buyers, Forstmann Little could choose to sell the company division by division, an approach that could conceivably net even more. Alternately, IMG’s new owner could spin off a few high-profile divisions once the transaction is completed. If IMG’s golf division become available, it would entice many suitors, as it has its fingers in many pies. It manages the careers of a parade of professional golfers, among them Ernie Els, Luke Donald, Colin Montgomerie, Annika Sorenstam, and Michelle Wie. In one way or another, it’s involved with 37 international professional events, including 15 on the PGA and LPGA tours and the Australian Masters, the Ricoh Women’s British Open, and the Abu Dhabi HSBC Golf Championship. In addition, IMG Golf owns and manages golf properties, and its design wing has produced dozens of tracks in countries too numerous to list. Whoever ends up owning it will have a nice slice of the golf business.

     Two months after it ran out of money and closed, Golf Club at Summerbrooke has reopened with a new operator. Keith Pope, the principal of Pope Golf Management, has assumed control of the 20-year-old club in Tallahassee, Florida. Pope plans to address greens-related issues immediately and to completely overhaul Summerbrooke’s 18-hole, Dean Refram-designed course over the next three years. “He is like an angel,” Summerbrook’s owner, Reagan Hobbs, told the Tallahassee Democrat. “His forte is turning around courses. He is what we needed.” Hobbs bought Summerbrooke in 2003 and says that it hasn’t had even one profitable year. He was forced to close the club in July due to what the Democrat calls “persistent operating debt.” Pope, which operates six other golf properties in Florida, replaced Hampton Golf Management.

     In an attempt to create a destination-worthy venue, the new owner of a golf club in Boothbay, Maine has turned to one of Tom Doak’s former associates. Paul Coulombe has allotted $4 million for a makeover of Boothbay Harbor Country Club, a property he purchased earlier this year, after it failed to sell at an auction. The club features an 18-hole track whose original nine opened in 1921. “I want this course to become a destination course in Maine,” Coulombe told the Boothbay Register. “I hope my investment will spur others to invest in our region.” The work, which begins next month, will be overseen by Bruce Hepner, an architect with minimalist sympathies who operates out of an office near Doak’s in Traverse City, Michigan. Hepner says that his goal is to make the course “strategic, interesting, and playable.”

     KemperSports has added one of the top golf properties in Illinois to its fast-growing portfolio of private clubs. The company has been hired to operate Bull Valley Golf Club, a 25-year-old property in exurban Chicago that narrowly avoided foreclosure last year. “There are not a lot of courses in Chicago that can match the character of what Bull Valley has,” Doug Hellman, a senior vice president at KemperSports, told the Northwest Herald. “We’ll make it well worth the effort to go the extra distance to get to Bull Valley.” Specifically, KemperSports has been directed to improve Bull Valley’s food and beverage offerings and to make the club “a premier destination for weddings and parties,” the newspaper says. “We’re focusing on events,” said Gary Rabine, who paid less than $2 million for the club in 2012, “and [Kemper is] going to take that to another level.” Bull Valley is the 15th private club in the Kemper Collection, a group that includes Prairie Club in Valentine, Nebraska; Hamilton Farm Golf Club in Gladstone, New Jersey; and Governors Club in Brentwood, Tennessee.

     Rees Jones, whose career achievements include major awards from the American Society of Golf Course Architects and the Golf Course Superintendents Association of America, is about to be recognized for his service to golf by the Golf Course Builders Association of America. The GCBAA plans to award the Montclair, New Jersey-based designer with its Don A. Rossi Award at next year’s Golf Industry Show. “Rees has a unique opinion when it comes to building golf courses and believes courses don’t have to be long to be challenging or hard to be fun,” said Justin Apel, the GCBAA’s executive director. “He was ahead of his time, as this way of thinking has essentially become the mantra of the golf industry.” Jones, a golf course architect since 1965 and a son of Robert Trent Jones, has designed numerous courses in the United States and others in Canada, Mexico, England, China, Namibia, Spain, and Puerto Rico, but he made his reputation -- and earned a nickname, “the Open Doctor” -- for the redesigns and remodelings he did at tracks that host the U.S. Open, the PGA Championship, the Ryder Cup, and other high-profile professional events. The ASGCA gave him the Donald Ross Award in 2013, and the GCSAA gave him the Old Tom Morris Award in 2004.

     In coming years, we’re going to be deluged with messages reminding us that Scotland is “the Home of Golf” and inviting us to drop by for a visit. The promotions will be part of a national initiative, Driving Forward Together, whose goal is to make Scotland the world’s top golf destination by 2020. The campaign will be considered a success if it can increase the £220 million ($349 million) that golf currently contributes to the Scottish economy by 20 percent, to roughly £300 million ($476 million). “The collaborative approach between various organizations in pulling this strategy together is exactly what Scotland’s golf tourism sector requires,” said Tourism Minister Fergus Ewing, “and demonstrates that we are all working towards one single aim: to make Scotland the must-visit destination for every golfer.” The campaign will be bolstered by three high-profile events -- the 2014 Ryder Cup and the Open Championships of 2015 and 2016 -- that will be played in Scotland.

     If a Canadian group’s calculations about net worth are accurate, Arnold Palmer and Tiger Woods are, among golfers, in a class of their own. Palmer is worth $675 million, according to The Richest, while Woods is worth $600 million. Greg Norman is a distant third ($300 million), followed closely by Jack Nicklaus ($280 million) and distantly by Phil Mickelson ($180 million). The rest of the top 10 looks like this: Fred Couples ($105 million), Ernie Els ($75 million), Vijay Singh ($65 million), Nick Faldo ($51 million), and Jim Furyk ($50 million). One surprise: Steve Williams, the caddy for Adam Scott (and, formerly, Woods), is said to be worth $20 million.