July 25, 2023

276:Board Chats Wisconsin Club

Imagine a historic club on the brink of collapse, brought back to life with a well-timed capital injection and professional management. Today on our podcast, we unravel the inspiring preservation story of the Wisconsin Club, a landmark in downtown Milwaukee. Our guests, Rick Whiting and Fred Joachim , detail the strategic partnership with Concert Golf Partners that allowed the club to swim out of financial difficulty and enhance its operations.

From challenges in club ownership to securing capital and striking a delicate balance between memberships and costs, we unpack it all. The pandemic wreaked havoc on their banquet business, but Concert Golf Partners stepped in, bringing not just capital but vital professional management. By understanding membership dynamics and preserving the club's allure, they managed to create a unique balance that enhanced the club atmosphere.

The decision to preserve the club for another 100 years required the board to make challenging decisions. Acquiring the right capital, the one-time assessment imposed on members, and finding the right buyer significantly shaped the club's future. The importance of employees in curating exceptional experiences for club members is discussed, alongside the exciting prospects such as interactive games and club expansion for a unique member experience. Join us for this riveting conversation about the Wisconsin Club's phoenix-like rise and what lies ahead.

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00:00 - Recovering and Transforming the Wisconsin Club

10:30 - Assessing a Potential Business Partnership

24:28 - Considerations in Buying a Country Club

31:52 - Employee Importance in Club Relationships

45:43 - Leadership Challenges and Club Dynamics

52:42 - Exploring Growth and Engagement in Clubs

WEBVTT

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Hello everybody and welcome to this episode of Board Chats presented by our friends Concert Golf Partners, boutique owner-operator of private golf and country clubs nationwide.

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This is a fun episode because we are talking with Rich Whitting and Fred Josham from the Wisconsin Club.

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The Wisconsin Club is a historic establishment in downtown Milwaukee that faced unique challenges in its management, and a lot of it was amplified during the COVID-19 pandemic, and the club's board of directors really struggled to run the club without the necessary skill set or knowledge, which led to some financial problems.

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And this is where Concert Golf Partners came in.

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You know, they injected a bunch of capital as a rescue plan for the club.

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They brought in professional management, they had the financial power to invest back into the property and the club and it allowed them to innovate and meet the needs of the members, strengthening the club's financial position and really improve the club's operations by using their buying power to help secure better deals for the club.

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And so the partnership between the Wisconsin Club and Concert Golf Partners not only helped navigate their financial difficulties but also allowed the Wisconsin Club to focus on providing unparalleled experiences for its members and creating a successful future for the club.

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So welcome to Board Chats presented by our friends Concert Golf Partners.

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Tell me a little bit more about the both of you, because I know there's some really cool, excited things happening.

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The golf course was the Jewish club in town.

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Back I found it, I believe, in 1927 or 1928, back when exclusionary practices were involved.

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Roll the clock forward.

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It's gorgeous golf course, it's a gorgeous campus, it's somewhat urban location.

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As the suburbs expanded and exclusionary practices ended, the children and grandchildren of the membership were joining clubs in their own community and the membership began to dwindle because many in town still thought of it as the Jewish club in town, even though they weren't.

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I mean, that wasn't their mandate, but that was its history.

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And so as their membership began to decline, their ability to pay the bills to run the club declined as well.

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So, as Fred indicated, wisconsin Club Sluke Don bought the property.

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They gained backwood space, they gained members and it was a little bit like, you know, buy a Ferrari for 50 cents on the dollar.

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They had this golf course and they didn't fully appreciate what it cost to maintain it, to ensure and opt.

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About what year?

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About 14 years?

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ago.

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So, that would be 2010.

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2010.

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Yeah, Okay, yeah, so you know, and we as a board of directors, while COVID came kind of decimated the banquet business, the food and beverage business for the mothership golf boomed and the golf was doing well.

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But we as a board, I mean we have a dentist, we have a manufacturing guy, we have an insurance guy, we've got a couple of attorneys, friends of financial services background I'm a Wall Street background we have a general manager who is hands off on the country club and is looking at bleeding cash on the mothership and you find a board trying to run a country club with no skill set to do it.

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You know, I can go to a five star restaurant and order a beautiful meal, but I can't make one, you know, and that's, and that's the role the board was thrust into, which then led to the you know being introduced to golf, looking at their professionalism and managing a property, and it's just, you know, it's all financial problems, it's all member experience problems, it's all deferred maintenance problems, all in one package.

00:04:16.704 --> 00:04:21.552
So just to you know, kind of get to the nut.

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I mean the overall entity, the Wisconsin club umbrella, which was the downtown dinner and banquet facility, as well as the country club, had a couple million dollars of doubt on the balance sheet.

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They were content, they didn't feel any urgency to pay that off and that was fine as long as the downtown food, beverage and banquet business was rocking.

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A roll of COVID killed that.

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Now, all of a sudden you have got coincidental to that.

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The golf course was built 95 years ago.

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Well, there were dams out there that held back the irrigation water that had started to fail, or a hundred years old.

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We have bridges that cross the creek that were of equivalent vintage.

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They started to, oh boy, and the number was seven figures, a million, three.

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And all of a sudden you're looking at declining financials for the entity overall and a bar tab that just came in at a million three.

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And you're going, if we do the assessment around the horn, how many do we lose?

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Do we fail to raise the amount of money we need to get home?

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Wow, and you know, the beauty of concert golf is they have a stack of capital behind them.

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They can come in and say, okay, there's a return on investment over time, but we have the capital to address it now.

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We didn't have that facility.

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That was sort of the straw that broke the camel's back that said, okay, no more treading water on our own.

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We have to find a more realistic solution.

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Well and I would say because Rick was part of the group.

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One of the things is a board before and I'm talking about both clubs, you, they really didn't understand the internal mechanics.

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We weren't supposed to.

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We were supposed to approve or disapprove needs.

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When we started getting into what Rick's talking about long term studies and I'm talking 10 and 20 years out of capital need, the number was, I mean, right on the outdo, because you're talking about two old, historic clubs.

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And when you started looking at that and then you started looking at, well, how does the thing flow?

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Was it dues as a pension stuff to Rick's point places where you wanted to go.

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If you're going to have a company party or a wedding or a bar mitzvah or whatever it is, you want to be in this environment.

00:07:04.497 --> 00:07:13.151
Well, for two, arguably two and a half years, because we're on the inside the city of Milwaukee, because of that, they won't even let people meet.

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So you're losing hundreds of thousands of dollars a month in revenue.

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We had a.

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We have a good core membership at both.

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Boy the history of private member owned clubs.

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They go back and you do an assessment.

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You can pick any number you want, from 10 to 15, 20,000 or more, being able to promise your numbers.

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If you do this, I won't come.

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We couldn't do that.

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There was enough deferred maintenance on both campuses and enough need that we couldn't promise people we wouldn't be back past Manhattan in another three years.

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And so they go.

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Well, this club down the street did an assessment two years ago.

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I probably have a window there.

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What's your exit going to be?

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And we didn't want to run that rose.

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And where I really have to tip my cap to Peter concert and his team is they're very successfully blocked and integrated member owned clubs into their system.

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We were a unique animal because our country club was an asset of the Wisconsin club, so they weren't just buying everything lock, stock and barrel, they were buying there would be a surviving entity.

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So how do we split up employees?

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How do we split up debt?

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How do we split up least equipment?

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How do we do reciprocity between the two memberships?

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Peter and his team really had to think outside the box, come up with innovative solutions.

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We'd kick them back and forth, would wrestle with them, but they never threw in the towel and said oh, this is too complicated, we're going to go look for the next thing.

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They're like we're committed to doing this with you, but we're really going to have to think this through so it works to everybody's benefit.

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I think at the end of the day they hit the nail on the head.

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So I come from a business background and analyzing business models, so I could do the financial under this transaction no problem.

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But I needed to know if the people at concert were just hard-nosed big business people or if there were human beings as well.

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And on the very corner of the golf course property as a home, and the guy living in that home started working for the legacy country club when he was like 15 years old.

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He's now a middle-aged 70.

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And he was the Mr Fixed.

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He knows where every nut, ball, screw, light switch in the entire property is and at one time or another he either built it or fixed it.

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He's retired and his deal on a handshake with the original founding club was he could live in that home to the rest of his life.

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And when Wisconsin Club bought the golf course, they continued that handshake.

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Bob can live in that house for the rest of his life, even though he's retired.

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And when I told the guys from concert about it, they said no problem, If Bob is important to your membership, then Bob's important to us.

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He can state, put rent free, he can live in the house for the rest of his life and and if, for whatever reason, our insurance company were to freak out or Bob's no longer capable of living on his own, we will pay for his move and we'll contribute to his run.

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So now I know I'm dealing with some real people, some genuine, genuinely good people as well as genuinely good businessmen, and the comfort level went from here to here overnight.

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And then to Rick's point, because it well, first of all, it's who concert is, especially when you meet the rest of the management team and go to other golf courses, which we did to do our own Duke Elegium.

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The one thing on top of it is they weren't trying to make a cookie cutter.

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They kept saying no, you know your clubs, you know your members were here to.

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This was a battle.

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They were there talking to the field general saying what kind of ammunition do you need?

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That's where they were at and you could just tell from a business standpoint it was the right way to go, that they weren't trying to make you like any of the other courses.

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They were hoping you would augment what was already there.

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And when you took a step back as a golfer and you started analyzing especially being in the Midwest, we don't golf here January, february, march and April you would die outside.

00:11:50.610 --> 00:12:04.418
So when you, when you look at where that goes and we started looking at their compelling ability to use the other courses well, that's where everybody was going, and now they're going what do you mean?

00:12:04.418 --> 00:12:12.335
I could go to one of the other clubs and use the facility and as a dad myself, I'm looking at where their clubs are and I'm going.

00:12:12.335 --> 00:12:16.225
Are you telling me I go to the one on Amelia Island down to Jacksonville?

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Go over here, blah, blah, blah, where the courses are.

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I could go in there and eat a breakfast, lunch, dinner, swim in the swimming pool, work out or get around the golfing, correct?

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I'm sorry, that's a big deal.

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So as we started explaining that to the members, they're going.

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Well, I just see that's a amount of bucks.

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That just did this.

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That's a heck of a value.

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And the reason I bring that up is Rick has said this and it helped me tremendously.

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I'm in the industry where one product that you sell to somebody, you have a chance of losing that person one at 50.

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If you add two, it's one at 300.

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So when you really take a look at what Cots are doing, they're bringing stickiness to the club and they're bringing stickiness to to young, old.

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You know what other stuff do you want?

00:13:01.570 --> 00:13:05.947
You may not use it all, but it's what we like in our frequent flyer miles.

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I want to be able to do that.

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I want to not to be charged with these things.

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Anyway, what goes over very well in the Midwest and, yeah, everything was said and done.

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Our membership had to bolt on this trend and they, you know we went to great pains to make sure they understood the entire financial aspect of it and the investment the concert was proposing to make into the property and what you would it like.

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Our fear was that we got a 60 40 vote either way, because then it means sizable portion of your membership was going to be upset and figured 80 20 would be satisfied.

00:13:48.071 --> 00:14:03.590
We had 97 and a half percent vote for this to approve this, so that that says a lot about how comfortable Peter and his team were, or how good they were making people come.

00:14:03.590 --> 00:14:14.610
They really they went over and above it answering questions, being present, patient and to them this wasn't a cookie cutter way.

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I'm thank you, ma'am transaction.

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It's like we're going to make an investment in your future and you as members of our future, so let's work together on this.

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Yeah and do to that.

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The only guy would add is is through that process and sound odd.

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When it's a, you can't get into the details until people get, quite frankly, till they trust you.

00:14:38.342 --> 00:14:42.980
So what was going on both ways was who's really making the decisions?

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Who's in charge?

00:14:43.903 --> 00:14:46.529
You know a lot of validations, a lot of stuff, and this is goes.

00:14:47.351 --> 00:15:06.610
It's unusual, because there's a difference between running your old company with Rick and I have done and being part of a, I'll say, a social group, that it comes with different types of little caveats that you have to look at, because Everybody of these 12 other members had their own opinion, which what you need to listen and talk about it.

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Well, we had to look at where are we today and where are you trying?

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We had to, we had to be able to do the worst, the puck going, and when you kept taking a step back, look at the financials, and then you saw where the city itself was going and then you saw where we were trying to bring in different groups to try to keep this thing going.

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Concert would constantly say, and come back at us going though.

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We understand that and that's what we got into some pretty cool packaging of Reciprocal rights and things like that.

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How do you accommodate?

00:15:37.912 --> 00:15:42.320
But how do you keep feeding this thing with your eye on the competition local?

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You know, we've all been at the car dealer where he test drives something that's brand new and it's really easy to follow love and before you know it, the checkbook has flown out of your pocket.

00:15:58.380 --> 00:16:01.610
But Fred visited a number of clubs.

00:16:01.610 --> 00:16:09.610
I've been to other concert properties and what you're looking for is the member with five or 10 years experience.

00:16:09.610 --> 00:16:23.298
They remember how it was in the old days, they remember what motivated them to do the transaction and then they have current knowledge on how it feels today and every single time.

00:16:23.298 --> 00:16:25.590
You know, I mean, I didn't find them.

00:16:25.590 --> 00:16:35.022
I'm sure you could find the unhappy, grumpy member, but everybody I talked to was like, wow, everything just became a lot more professional.

00:16:35.022 --> 00:16:41.918
You know, it's just, it's still a country club feel and it's still a membership feel.

00:16:41.918 --> 00:16:47.461
It's just professionally managed, which is what where we were sorely locked in.

00:16:48.192 --> 00:16:51.321
Yeah, I would say this, Danny, because it came up quite a few times.

00:16:51.321 --> 00:16:57.083
Well, hard, or the one question was asked in Sicily is how can that?

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How do they do it?

00:16:58.125 --> 00:16:58.547
We can't.

00:16:58.547 --> 00:17:12.625
What do they do, though we can't go do, because a lot of people are pretty good at what they do, but in my industry and Rick's, we have to deal with departments that have legal risk.

00:17:12.925 --> 00:17:22.589
Quite in a sale, the product itself, your heavy users I would suggest to be controversial, but blood life forgot who their heavy users were.

00:17:22.589 --> 00:17:30.865
This they screwed up because they did not keep their heavy user in mind and that had nothing to do with some other ill cure going after.

00:17:30.865 --> 00:17:31.609
They could have handled better.

00:17:31.609 --> 00:17:47.589
They alienated the people paying the bills, and so we were very conscious of that and the new group you were trying to come in, so you were trying to, kind of, you know, package all this stuff through and, quite frankly, at the same time, we're users ourselves.

00:17:47.589 --> 00:17:49.609
What did we want to see out this?

00:17:49.609 --> 00:17:57.002
And they were incredibly accommodating and saying, ok, how do we bolt this thing within a reasonable fix?

00:17:57.789 --> 00:18:00.153
You know when your super comes to you and goes.

00:18:00.153 --> 00:18:10.679
My budget last year was $900,000, but I need a million to this year and your board has to say yes or no.

00:18:10.679 --> 00:18:18.589
And we have a dentist to manufacture a couple of lawyers me, fred, I have no idea.

00:18:18.589 --> 00:18:22.220
I mean, is that extra tractor going to make a difference?

00:18:22.220 --> 00:18:27.589
We actually need this fancy mower or second injector?

00:18:27.589 --> 00:18:31.457
I don't know, I mean but concerting.

00:18:31.457 --> 00:18:34.609
They own enough clubs that been around the industry long enough.

00:18:34.609 --> 00:18:36.034
They can go.

00:18:36.034 --> 00:18:41.609
Yeah, this is the correct budget for this many acres with this kind of equipment.

00:18:41.609 --> 00:18:41.770
That's.

00:18:41.770 --> 00:18:44.268
They've got a reference point.

00:18:44.268 --> 00:18:47.609
They are their professionals as opposed to amateurs.

00:18:47.609 --> 00:18:57.585
And so to Fred's point earlier, when our members would come back and go well, how come they can make money at this and we're struggling?

00:18:57.585 --> 00:19:00.413
It's because they're good at it, we're not.

00:19:02.315 --> 00:19:09.174
Well, rick, we got Rick's all early on and we were looking at the numbers and I remember they came back.

00:19:09.174 --> 00:19:22.195
It was on the course itself and they go okay, you just bought a half a million dollar tractor and with all the elements to it without a shit, by the way, which is the whole other issue, they're buying power.

00:19:22.195 --> 00:19:30.346
They're buying power was a third to 40% bend in that as a relationship with a John Deere is the largest buyer.

00:19:30.346 --> 00:19:34.489
They're chemical stuff and what you just started taking practical application of.

00:19:34.489 --> 00:19:38.609
So you're telling me I'm living eliminating some overhead.

00:19:38.609 --> 00:19:48.067
No one likes to say that, but overhead or assessment or a burden rate of a number, okay, because I don't need what we have downtown because it's already part of the quorum.

00:19:48.067 --> 00:19:48.529
That's a number.

00:19:48.529 --> 00:19:50.548
Then you have the buying power of alcohol.

00:19:50.548 --> 00:19:52.609
You have the power of chemicals.

00:19:52.609 --> 00:19:57.111
You have the buying power across there Time it was done, even on the back of the envelope.

00:19:57.111 --> 00:20:01.732
We're looking at six or $700,000 of annual savings.

00:20:01.732 --> 00:20:03.933
That, I'm sorry, polls right at the bottom line.

00:20:06.617 --> 00:20:15.280
There is a subtle nuance to the bread mentioned earlier that we're constructed or Wisconsin Club was constructed as a nonprofit.

00:20:15.280 --> 00:20:25.020
If you do more than 15% of your revenue from non-members, you run a follow the IRS and you risk losing your nonprofit status.

00:20:25.020 --> 00:20:41.300
So we had handcuffs on in terms of how much business we could do If you needed to drive more revenue to keep things alive and you're already as deep in the share of wallets as you can be with your members.

00:20:41.300 --> 00:20:46.760
You're handcuffed into how many events you can have on Monday, how many outside.

00:20:46.760 --> 00:20:48.304
What blah blah blah.

00:20:50.196 --> 00:20:53.445
Hey, they're in this business to make money and I'm a capitalist at heart.

00:20:53.445 --> 00:20:54.700
I don't have a problem with that.

00:20:54.700 --> 00:21:05.714
So, to the extent that they can drive outside, introduce the club to non-members, have events there.

00:21:05.714 --> 00:21:09.343
It supports your membership, it brings in revenue.

00:21:09.343 --> 00:21:11.166
It keeps your staff engaged.

00:21:11.166 --> 00:21:15.345
It's all good, but it's somewhere where we couldn't go.

00:21:15.795 --> 00:21:19.455
Can you go into kind of what the debt situation was Like?

00:21:19.455 --> 00:21:21.862
Where were you guys at in the waters?

00:21:24.095 --> 00:21:32.240
We had the ability under our bylaws to borrow $6 million and we had a little somewhere between grand 4 million and that.

00:21:32.240 --> 00:21:34.740
So we had room according to our bylaws.

00:21:34.740 --> 00:21:44.589
But a bank, a lender, would look at your current income statement with what COVID had done to a beverage bank with business and they go.

00:21:44.589 --> 00:21:48.732
You're bleeding money quarterly and you want us to lend you more.

00:21:48.732 --> 00:21:51.423
I'm not so sure that's a good idea.

00:21:51.423 --> 00:21:55.845
In fact, we're starting to get a little nervous about how much you already owe us.

00:21:55.845 --> 00:22:06.847
So I felt our capacity to we need a capital and to borrow capital to me was a non-starter.

00:22:09.414 --> 00:22:14.163
I grew up in an investment world where everything is sooner or later cyclical.

00:22:14.163 --> 00:22:18.862
Golf was enjoying an extraordinary boom.

00:22:18.862 --> 00:22:20.700
I hope it continues.

00:22:20.700 --> 00:22:24.026
There will be some stickiness to the number of new golfers that it fell.

00:22:24.026 --> 00:22:27.538
But just give us a garden variety.

00:22:27.538 --> 00:22:32.082
Recession golf, country club membership that's a distress.

00:22:32.082 --> 00:22:36.364
Your expenditure it's one of the first things to get crossed off family budget.

00:22:36.364 --> 00:22:40.862
It seemed like for us to go more in debt.

00:22:40.862 --> 00:22:45.339
Things were, on the golf side of the world, as good as it could possibly get.

00:22:45.339 --> 00:22:50.203
It seemed like a very, very high risk proposition to me.

00:22:50.203 --> 00:23:00.981
So bringing in outside capital in one form or another was, to my way of thinking, the only way of getting home.

00:23:02.115 --> 00:23:06.305
Well, and I will throw this out of the ground what a book of reality was.

00:23:06.305 --> 00:23:12.266
We had to test the waters all in one time assessment, ongoing, pick whatever category you want.

00:23:12.266 --> 00:23:21.722
We're sitting there in the Midwest and, sorry, I think the light work would be frugal A lot of frugal people.

00:23:21.722 --> 00:23:27.126
When you put it to them they said, well, what's going to take to keep it to rich credit?

00:23:27.126 --> 00:23:39.961
He said, well, let's send everybody with a one-time assessment on the category you're at Watching the reaction of not only the board members but some of the other was like a dog figuring out they were going to the vet.

00:23:39.961 --> 00:23:41.479
It didn't go over real well.

00:23:45.038 --> 00:24:00.386
Like every other club, we're blessed with a number of very successful, very wealthy members, and so, prior to engaging with concert golf, you make the rounds there and you go.

00:24:00.386 --> 00:24:01.577
So what do you think, guys?

00:24:01.577 --> 00:24:06.787
10 of us put up $500,000 bucks a piece, $5 million.

00:24:06.787 --> 00:24:10.298
We buy the country club bath, we run it member-owned.

00:24:10.298 --> 00:24:20.162
Every single one of them and I talked to more than 10 people it's like the only reason I am where I am is I'm good at what I do.

00:24:20.162 --> 00:24:33.684
I have no assurances I'd be good at running a country club and that $500,000 might turn into a million and I'm not just a way of million dollars on a business I don't know and understand and to store.

00:24:33.684 --> 00:24:36.160
There just wasn't the appetite to do it.

00:24:38.295 --> 00:24:41.263
And then at that point it just takes the fun away from the club.

00:24:41.263 --> 00:24:53.925
So now, no, siri, because then, like now, if you keep going to the club but then you get that hit of like, oh yeah, but now it starts going to business again, you don't get that hit of like dopamine as you go to the club anymore.

00:24:53.925 --> 00:25:10.659
Now it's more of like a eh, where a lot of people, especially younger people, my age, I don't want to have to join a board and a committee to talk about the burgers and the thing I don't want to know it's like resort style, everything's going to be taken care of.

00:25:10.659 --> 00:25:14.192
Like, because to me, like joining a club is you're joining the tribe.

00:25:14.192 --> 00:25:14.734
You know what I mean.

00:25:14.734 --> 00:25:17.104
Like the each club has its own vibe.

00:25:17.214 --> 00:25:27.547
So I think some of the fear coming in also is you know people think change, I'm going to buy us out or you know whatever is going to happen we're going to it's going to completely change Like no, everything's going to be the same.

00:25:27.547 --> 00:25:29.881
Like the front, all it's going to be the same.

00:25:29.881 --> 00:25:36.305
The stuff that you don't really don't care about, like we're going to make sure the burgers are like the best meats.

00:25:36.305 --> 00:25:48.358
We're going to make sure, you know we have the longterm vision and we're going to work on getting a water park or more for the kids, because we know it's a little bit more family style now and it's that sort of route and it's like, oh, we'll we have, you know.

00:25:48.358 --> 00:25:54.982
Uh, uncle Al is in Arizona and they also have you know, or uh, they're near Amelia Island.

00:25:54.982 --> 00:25:57.643
Now it is nice having that relationship.

00:25:58.517 --> 00:26:01.704
Well, I knew, you know, I mean Fred, and I had the same experience.

00:26:01.704 --> 00:26:06.286
You know you're, you're sitting on the range trying to warm up because, hey, we're playing a $2 an ass.

00:26:06.286 --> 00:26:07.779
So I got six bucks right now.

00:26:07.779 --> 00:26:21.180
This well, I've been duck hook in my seven iron and I got to figure that out in the next 15 minutes and and you got members tapping you on the shoulder, going hey, the shoeshine guy really doesn't know what he's doing.

00:26:21.180 --> 00:26:23.340
The towels in the locker rooms.

00:26:23.340 --> 00:26:26.255
You got to fix why.

00:26:26.255 --> 00:26:27.721
Well, you're on the board.

00:26:27.721 --> 00:26:30.556
Well, I'm sorry, have you?

00:26:30.556 --> 00:26:34.580
You know, now I can just go, I can't sit.

00:26:34.580 --> 00:26:38.401
Go talk to the general manager, he'll listen to you and you'll fix it.

00:26:38.401 --> 00:26:39.951
I don't have to.

00:26:39.951 --> 00:26:44.856
I don't have to get involved in that level of granular nonsense.

00:26:45.778 --> 00:26:47.401
And probably not even that.

00:26:47.401 --> 00:26:48.242
You know.

00:26:48.242 --> 00:27:11.699
Hey, excuse me, can I can one second, but I know I'm assuming there would be the other people who you can almost feel like the room changes if you walk by, or like they change their conversation or they feel like they are on edge, so like it's like that, opposite to where it's, you have the upfront people, then you have the people who might stand off or watch what they say or invite you to things or take things a different way.

00:27:11.699 --> 00:27:13.771
It totally changes the whole dynamic.

00:27:14.855 --> 00:27:37.185
The other thing we found out real quick is because this is it's a social thing and most of these people I mean you were talking about two clubs over 100 years old and their second, third generation families Guess what I don't know what the proper term is called clicks, call it whatever you want Well, now, with email and social media, they weren't hesitating talking to each other.

00:27:37.185 --> 00:27:47.166
So one of the other thing was you needed to get in front of who was originally pinning this stuff, fuel them out and try to reverse engineer, divide, conquer.

00:27:47.166 --> 00:28:00.662
So part of the attack plan was let's make sure we find these, these entities, fuel them out, leak the right data tool, let them get exposed to the other courses and have gone through this stuff and make the boogeyman go away.

00:28:00.662 --> 00:28:01.484
That was critical.

00:28:03.019 --> 00:28:16.767
You know, fred did an awesome job, the rest of the board did an awesome job and I was really monstrously impressed through the whole education thing prior to the bow.

00:28:16.767 --> 00:28:41.140
We've got smart, we've got engaged members who weren't fully aware of just how tenuous some of the financials have become and I was getting 25 emails, 15 texts a day as we started to put this out and I know Fred was too Some of them were angry how dare you suggest selling?

00:28:41.140 --> 00:28:53.321
Our country called and you get on the phone with these people and you start talking to them and you say, well, you know, here's where we are, here's what the options are, here's what the outcome of those options would be.

00:28:53.321 --> 00:28:55.178
What do you?

00:28:55.178 --> 00:28:56.141
What's a better idea?

00:28:56.141 --> 00:29:01.443
I'm listening and well, 97 and a half percent voted to do it.

00:29:02.095 --> 00:29:18.397
But when you really engaged people one on one and it was no longer the club that you showed up, you paid your bill when it came on time, but you had actually had to invest some of your own thought into and some of your own judgment.

00:29:18.397 --> 00:29:27.471
People were really, really engaged and interested and wanted to do the right thing.

00:29:27.471 --> 00:29:31.445
However you define that, alright now we'll throw this out.

00:29:33.660 --> 00:29:40.873
The numbers is what most of us have been exposed to buying, selling, mergers, acquisition, new product rollouts, whatever you want to call it.

00:29:40.873 --> 00:29:42.623
We're used to, ideally, basis.

00:29:42.623 --> 00:29:43.645
Many people aren't.

00:29:43.645 --> 00:29:45.931
They're told what to do, they do it, and so on.

00:29:45.931 --> 00:29:54.484
A lot of boards operate that way and I would tell you this opportunity, which it did pop up two or three years ago, we didn't have the right makeup on the board.

00:29:54.484 --> 00:29:57.191
There was no doubt about it.

00:29:58.861 --> 00:30:00.989
Things happen quickly, can't happen quickly.

00:30:01.440 --> 00:30:03.144
Well, let's look about an event that's coming up.

00:30:03.144 --> 00:30:08.339
Just because it's interesting is that the downtown club.

00:30:08.339 --> 00:30:14.173
Now our whole mantra was let's say both clubs, let's make sure they both go for another 100 years.

00:30:14.173 --> 00:30:17.367
So that was a simple thought and we forced everybody to go.

00:30:17.367 --> 00:30:18.151
What's it going to take?

00:30:18.151 --> 00:30:24.857
Both these entities continue to buy and sell from each other, act as feeder groups to board but then attack.

00:30:24.857 --> 00:30:27.807
Quite frankly, it was like playing a big game of risk.

00:30:27.807 --> 00:30:32.420
How do you go out there and attack the other opportunities these people have to go to?

00:30:32.420 --> 00:30:41.689
But, for instance, this next year on 24, we got the RNC covered in Because of the physical location of our downtown club.

00:30:42.171 --> 00:30:51.420
We're inside, not only the inner belt, security wise, we have a fleet of limos, trucks and buses that can move 1000 people an hour.

00:30:51.420 --> 00:30:58.275
That value is driving potential to drive hundreds of thousands of dollars an hour.

00:30:58.275 --> 00:31:00.420
That will get a club through the next two to three years.

00:31:00.420 --> 00:31:01.988
Well, guess what?

00:31:01.988 --> 00:31:04.420
These people will come in for every state and country.

00:31:04.420 --> 00:31:07.508
They're coming during the time they might want to go golfing.

00:31:07.508 --> 00:31:08.891
So now we're going to win them.

00:31:08.891 --> 00:31:11.247
I don't tell a club it's great.

00:31:11.247 --> 00:31:13.095
How do you drive the traffic over to?

00:31:13.095 --> 00:31:14.400
You know, six miles away or a country club?

00:31:14.400 --> 00:31:16.686
Now start packaging that stuff.

00:31:18.442 --> 00:31:35.814
It'll be pretty funny the first time a member doesn't read their email and thinks they can just show up for dinner and it's inside a security zone and somebody with a very large personnel unit behind them says you will not enter here.

00:31:37.901 --> 00:31:39.945
Do you know who my father was Right?

00:31:39.945 --> 00:31:42.519
Do you, member number two, that?

00:31:42.539 --> 00:31:43.182
is exactly right.

00:31:46.720 --> 00:31:52.411
I mean, the whole genesis of this thing was interesting because it was probably three years ago.

00:31:52.411 --> 00:32:00.768
I get a call out of the blue and we've heard nice things about your club Would be interested in buying a club in Wisconsin.

00:32:00.768 --> 00:32:04.061
What do you guys think Hard?

00:32:04.061 --> 00:32:05.768
No, peter, we're doing fine.

00:32:05.768 --> 00:32:20.420
I appreciate your interest and good businessmen that they are maybe once a quarter, once every four or five months, either Peter or somebody else from Codds or what called Just checking in to see how things are going.

00:32:20.420 --> 00:32:23.420
I mean, we're all muddling through the pandemic, blah, blah, blah.

00:32:23.420 --> 00:32:25.847
You know you guys still all right.

00:32:25.847 --> 00:32:27.772
How's your golf business?

00:32:27.772 --> 00:32:28.420
How's this house?

00:32:28.420 --> 00:32:30.420
We have a nice conversation.

00:32:30.420 --> 00:32:33.528
I could compare notes against how their properties were working.

00:32:33.528 --> 00:32:41.593
And the day came that you know, peter called and it's like hey, peter, I think we need to talk.

00:32:41.593 --> 00:32:43.904
We've gotten to that.

00:32:43.904 --> 00:32:48.359
We've gotten to that strong the camel's back that I don't know if we can do this on our own anymore.

00:32:48.359 --> 00:32:51.209
We need, we need outside capital.

00:32:51.209 --> 00:32:57.011
And they were extremely professional once that conversation took place.

00:32:57.901 --> 00:33:05.865
Well, and look at concert and their team, and Peter will be the first to sit, not him, with the team, and he obviously picked the team.

00:33:05.865 --> 00:33:12.420
So he's the you know, the Jedi but and the great, great, wonderful kids and the rest of it on there.

00:33:12.420 --> 00:33:16.230
But I will tell you that it was just the way they went about it.

00:33:16.230 --> 00:33:34.420
But prior to that, I think Peter would be the first to tell you that it wasn't just concert happened because of his exposure to Arnold Palmer worldwide, and you're talking about a brand, image, person's name, how you went about it to get totally under one of the best of the best.

00:33:34.420 --> 00:33:36.380
Then start your own.

00:33:36.380 --> 00:33:40.420
It was those types of elements that you're, you're, you're pulling along.

00:33:40.420 --> 00:33:47.107
So we're open to the next two, three, five clubs they bring in and add to the group and it just thing just gets stronger and stronger.

00:33:49.328 --> 00:33:50.358
But Fred makes a great point.

00:33:50.358 --> 00:33:57.288
Whether it was Jordan, peter or Lincoln or Jake I mean Peter's assembled a really strong team.

00:33:57.288 --> 00:34:04.451
Very, you know, I'd be scratching my head going I don't know how we get over this next hurdle to make this work.

00:34:04.451 --> 00:34:06.248
And they would.

00:34:06.248 --> 00:34:07.420
They would be very upfront.

00:34:07.420 --> 00:34:10.188
We don't know either, but we're going to figure it out.

00:34:10.188 --> 00:34:12.626
And they boy, they did.

00:34:12.626 --> 00:34:13.889
They really did the work.

00:34:14.460 --> 00:34:18.931
Well and up on a progress, daddy, because to not say it wouldn't be wouldn't be fair.

00:34:18.931 --> 00:34:22.380
We weren't exactly nice on all the stuff that was going on.

00:34:22.380 --> 00:34:26.420
I mean, I'm sorry, but hard for more and more jobs was to push hard.

00:34:26.420 --> 00:34:31.126
So more rinky hitting a lot of them, as they said.

00:34:31.126 --> 00:34:37.777
I was going to the front of the spear but he had the weight behind it pushing it and but then had to happen.

00:34:37.777 --> 00:34:43.380
And the reason I say that is that if you don't go to that level, you don't know.

00:34:43.380 --> 00:34:52.367
And those same people were asking questions, you can't look them in the eye and have a pretty good conversation, because if you don't get to that level, you're not really talking.

00:34:55.041 --> 00:35:00.893
You know, when we presented this to the membership, the most common questions were why?

00:35:00.893 --> 00:35:04.380
Well, the financials fell that out.

00:35:04.380 --> 00:35:10.467
Why now, again, it's back to the financials, it's back to where we are in the cycle.

00:35:10.467 --> 00:35:16.570
And the third question is why these guys, you know, is this the best deal?

00:35:18.422 --> 00:35:33.963
And three years ago, my self and the other senior partners sold our business and we did not take the best offer, dollar wise, but we took the offer.

00:35:33.963 --> 00:35:36.831
That was the best buyer for our business.

00:35:36.831 --> 00:35:38.523
They took care of our people.

00:35:38.523 --> 00:35:42.307
They gave five year employment contracts to our junior partners.

00:35:42.307 --> 00:35:55.333
We were the right product to fill a hole in their portfolio and they were going to give our people autonomy to just do what they do well and not micromanage them.

00:35:55.333 --> 00:35:59.411
So it was the right buyer, even though it wasn't the highest dollar amount.

00:35:59.411 --> 00:36:05.333
And so when members would look at us and go, how do we know we can't get a higher price?

00:36:05.333 --> 00:36:09.146
I could, with full honesty, look at them and go.

00:36:09.146 --> 00:36:14.666
I don't know, maybe there is somebody with a bigger number out there, but this is the right buyer for the club.

00:36:16.141 --> 00:36:22.420
Well, I will hand this because he teed it up is the club is only as good as the people pulling the lever.

00:36:22.420 --> 00:36:24.186
So it's the employees that are there.

00:36:24.186 --> 00:36:37.420
And the one thing it took us a couple seconds to figure out was if I'm an employee, I don't care if I'm running the outdoor bar, I don't care if I'm parking cars, I don't care if I'm whatever.

00:36:37.420 --> 00:36:46.306
A lot of this business is well when you're sitting where we are in the Midwest and, by the way, seasonal is this to me there's a lot of golf courses down in Florida.

00:36:46.306 --> 00:36:51.757
I can guarantee you those people in full Florida do not really want to be there in July and August.

00:36:51.757 --> 00:36:54.047
No offense to Florida, come see us.

00:36:54.047 --> 00:36:57.989
We got some really good golf courses that are championship level.

00:36:57.989 --> 00:37:05.728
Start with us and they'll go hit the color courses where the PGA and the US opens and the Ryder cups evolve and everybody goes.

00:37:05.728 --> 00:37:07.172
Let's escape this heat.

00:37:07.561 --> 00:37:09.791
When you started to see the matchup you want to look at.

00:37:09.791 --> 00:37:13.420
That's great for the buyer of your service, but the employees get to work the same way.

00:37:13.420 --> 00:37:18.420
You're going from arguably four or five hundred employees to a group of three thousand.

00:37:18.420 --> 00:37:21.420
Well, can I go down to one of the other clubs January favorite.

00:37:21.420 --> 00:37:23.126
Can I take over a region?

00:37:23.126 --> 00:37:25.400
They're now part of a group where they have longevity.

00:37:25.400 --> 00:37:28.420
Now you reverse that on a recruiting standpoint.

00:37:28.420 --> 00:37:32.259
Can I go get these kids get out of school and show a path forward?

00:37:32.259 --> 00:37:36.318
It's a pretty big deal, amen.

00:37:38.001 --> 00:37:53.650
It boils back to, I think what you said in the very beginning is, you know it, when we go to the gentleman's house who's on property, you know that could have been like a big deal, these other things could have been big deals, but it's, you know, not being a.

00:37:53.650 --> 00:37:56.420
Was it a penny Pennywise, a penny foolish, and a pound?

00:37:56.420 --> 00:38:05.632
Yeah, I always hate saying it, but it's like there's bigger fish to fry, like there's so much else to worry about, like why it goes back to then.

00:38:05.632 --> 00:38:08.340
You know why a lot of boards aren't great.

00:38:08.340 --> 00:38:16.134
It's, yeah, but the burger was better when we got the sesame seeds from, you know, burger King.

00:38:16.134 --> 00:38:18.670
Trust me, we heard that yeah.

00:38:19.862 --> 00:38:28.311
And they do sell like one, you know the difference, the point about the employees, a member's relationship with their club.

00:38:28.311 --> 00:38:30.155
You have a relationship with the ballet.

00:38:30.155 --> 00:38:35.431
You have the relationship block room attendant and the bartender and the waitstaff.

00:38:35.431 --> 00:38:39.389
You might see the general manager once a week or whatever.

00:38:39.389 --> 00:38:41.380
Your relationship is not with management.

00:38:41.380 --> 00:38:48.869
It's with the people that you interact with on a regular basis and the first thing that concert says is we want them.

00:38:48.869 --> 00:38:52.400
We don't have an H and a HR department in Wisconsin.

00:38:52.400 --> 00:38:54.760
We want your people Now.

00:38:54.760 --> 00:38:59.869
We want to coach them up, Familiarize them with our systems and our way of doing things.

00:38:59.869 --> 00:39:07.748
But yeah, we want this to be as seamless for your membership as possible and it's played out that way.

00:39:10.251 --> 00:39:21.204
It was kind of interesting and it was the conundrum of being a non professional and food and beverage and hospitality on a board For a club Is your ass.

00:39:21.204 --> 00:39:28.347
To make a decision and that's a binary decision yes, we're going to do this or no, we're not going to do that, and you're really throwing it dark.

00:39:28.347 --> 00:39:30.686
You don't know what the final outcome is going to be.

00:39:30.686 --> 00:39:39.023
Peter has told me on a couple of occasions programs that now they own 30 clubs.

00:39:39.023 --> 00:39:44.130
They roll out an idea of five clubs and it's an experiment.

00:39:44.130 --> 00:39:47.043
Do the members like it or do the members hate it?

00:39:47.043 --> 00:39:48.150
Does the staff like it?

00:39:48.150 --> 00:39:49.847
Does the staff hate it?

00:39:49.847 --> 00:39:51.695
Has it worked or hasn't it worked?

00:39:51.695 --> 00:39:58.150
If it comes back with five-star reviews across the board, then you roll it out to the rest of the clubs.

00:39:58.150 --> 00:40:11.043
But you have an opportunity to incubate ideas as opposed to just throwing that dark cross in your fingers and going it better worked or something it's going to yell at you.

00:40:13.335 --> 00:40:32.722
Well, and I you know, this is me just being like the outsider too is in a position like that If I'm part of this club group and then all of a sudden you're one of like the four test clubs that gets to try something, you can now go to the members or the members now be like oh wait, not every club's doing this, we get to be the, we get to be the test.

00:40:32.722 --> 00:40:38.380
Now that makes it like a little bit more of a cool, exclusive thing, Like to me, like that's where my head goes for some of the.

00:40:38.380 --> 00:40:41.150
You know how to make the front-facing stuff sound good.

00:40:41.492 --> 00:40:42.967