SBJ/April 4 - 10, 2005/SBJ In Depth
Robert Dedman Jr. challenges his courses to change the way they market the sport
Published April 4, 2005
One company is the bellwether of the golf facilities industry, and its moves are watched by course operators everywhere. When ClubCorp sells some of its daily-fee courses and announces it’s in the market for more country clubs — as it has recently — other operators wonder if they should do the same.
Robert Dedman Jr.
|Title: Chairman, ClubCorp Inc.|
|Career highlights: Dedman joined his family’s company in 1980 as director of corporate planning and became CFO in 1987, after a three-year stint at Salomon Bros. as an associate; became president and COO in 1989, CEO in 1998 and chairman in 2002; stepped down as CEO last year.|
|Born: Dallas, June 26, 1957|
|Education: Bachelor of arts, economics, University of Texas, Austin, 1979; MBA, Southern Methodist University, 1980; J.D., Southern Methodist, 1984|
|Family: Wife, Rachael; daughters Catherine, 4, Nancy, 2|
ClubCorp has approximately $1.5 billion in assets and revenue of roughly $1 billion. The privately held company does not disclose its exact bottom line. Worldwide, ClubCorp owns or operates nearly 200 golf courses — including Pinehurst and the Firestone Country Club — country clubs, business and social clubs, and resorts. It’s the largest such company in the world.
Dedman is on almost every golf “most influential” list. Golf Inc. magazine, which focuses on the facilities side of the game, recently ranked him third, after Jack Nicklaus and Tiger Woods. Last summer SportsBusiness Journal ranked him No. 19 in a field that encompassed all sectors of golf in North America and Europe; he was the only facilities person on the list.
The elder Dedman inspired awe and love from his employees. Friends and observers don’t yet speak of the younger Dedman with the same reverence, but he has plenty of friends and many respectful observers.
“His father was as charming and fun away from the office as he was diligent and intelligent and driven at work. Junior has some of the same quality,” said M.G. Orender, president of Hampton Golf, a course owner/operator, and honorary president of the PGA of America.
“He’s a guy’s guy — you can play golf with him, and afterwards cut up and make jokes. But even then, you know that when he walks into the office the next day, it’s all business. He’s able to separate the two very well.”
Dedman’s tenure has had some newsworthy ups and downs, consistent with the golf industry overall. These include a $300 million investment from private New York equity firm the Cypress Group in 1999, some reported revenue declines, and the resignation of his CFO and the director of Pinehurst, ClubCorp’s marquee property, last spring.
And while rounds played at its courses were down slightly last year, outings — including dining and other attractions — were up 10 percent, and the company has said it expects a 5 percent increase in rounds played this year. It did an aggressive $60 million worth of renovation last year and has similar plans this year. Throughout the industry there is a feeling that the company is poised again for strong results.
Dedman himself plays 20 to 25 rounds a year, mostly with business connections, and he’s a 12-handicapper. “I’m sporadic, but I’m getting better,” he said. “I think I’m trying to practice a little more and take it more earnestly.” He has two children under the age of 5. “I’ve already got them out swinging a club,” he said.
The elder Dedman shaped ClubCorp into a singular company, and his son isn’t wavering from this. Whereas the majority of privately owned clubs actually lose money — like most sports teams, their overall value, measured in member equity, often rises — ClubCorp clubs are fixated on the bottom line.
Managers and club pros are paid less than their counterparts at private clubs, according to John Sibbald, president of John Sibbald Associates, a St. Louis recruiter for the club industry. But they make up the difference in incentives and bonuses.
Sibbald said the difference in philosophy makes it rare that his company places a ClubCorp alum in a private-club position, but this doesn’t diminish his respect for the company’s operations. He likens it to Procter & Gamble as an “academy” company whose practices are industry-standard.
“Their training, development programs, magnificent systems of all forms, food and beverage, overall financial controls, the development of staff, how to conduct and market themselves — they’re superior marketers, because the name of the game is keeping the club as full as you can keep it.”
This is a task. A recent KPMG study found that the membership base at private clubs dropped 10 percent in the past five years, hurting clubs both in regular revenue and in initiation fees and equity fees. The average private club, it reported, has seen a net loss to the bottom line of $270,000 annually compared to 2000, or $670 per member annually.
One of Dedman’s responses has been to require that many of his courses start marketing toward women and families, a contrast with the industry’s “men’s club” philosophy of decades past.
“The women’s and family markets are very underserved,” he said. “A lot of negatives have been thrown at the industry, but the advent of [awareness of] women and golf is a great positive, and this industry has to adapt to demographic changes. More than half of all new executives are women.”
Dedman is on the board of Play Golf America, the joint venture among many of the top U.S. golf authorities, and he said his reason for stepping down from the CEO post last year was to free up time to use his influence more broadly.
“I wouldn’t say I’ve mellowed, but it’s more about influence than authority now — ‘Where does the industry need to go?’ — and frankly I enjoy that. The industry can talk all it wants, but until it happens at the grassroots level, all the moaning in the world won’t get the pendulum going in the right direction.”
And so the guy’s guy — to quote Orender — talks of how even old-line golf clubs must change their approach. “One of the challenges is attitudinal barriers. It’s a male-dominated industry,” he said. “That being said, it’s in everyone’s enlightened self-interest to broaden their vision. This isn’t to the behavior stage in the industry overall, but our pros understand the importance of this to their livelihood.”