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By Steve Eubanks
With an infusion of capital and a major acquisition, Eagle Golf has reinvented itself as Arcis Golf
Life is full of second acts, times when you’re up, then down, and then up again. Anyone who has been in business through one or more recessions can attest to that fact. Most of them can also tell you that, sometimes, you have to get smaller before you can grow.
Perhaps no one in golf understands that more than Joe Munsch, who went from managing 88 properties with Eagle Golf down to 29 during the Great Recession, mostly by shedding leases that no longer made sense in the game’s new realities. But Munsch came roaring back at the beginning of 2015 when his company teamed up with Arcis Equity Partners.
“Arcis didn’t have a management platform,” Munsch explains. “That was why it made sense for Arcis Equity to invest in Eagle Golf. The plan all along was for Eagle Golf to go through a name change once Arcis came on with financing. So Arcis Equity owns the courses and financed Eagle Golf, which is now operating as Arcis Golf.”
After announcing the deal with Munsch and Eagle Golf, Arcis purchased a healthy chunk of golf properties from CNL Lifestyle Properties, a REIT known primarily for its ski resorts. That acquisition thrust Munsch back into the multi-course management game in a very big way.
“We took over 35 courses in 45 days, 25 of them on January 1,” Munsch notes. “I’m not going to tell you that wasn’t without its challenges.”
A 30-year veteran of the industry who spent most of his career with the industry’s largest players, ClubCorp and American Golf, Munsch knew that effective growth requires infrastructure as well as qualified boots on the ground. So, for the first half of 2015, he added people at the corporate level while also bringing in competent management at the individual clubs.
“We added a whole new sales team,” he says. “We brought on a new F&B person, and we had to do quite an upgrade in terms of managers in the field [for the properties] that we took over. We couldn’t have handled that before [the Arcis merger].”
The company also couldn’t have made the improvements necessary to jumpstart the operations. Specifically, Arcis Equity has committed substantial capital, some for deferred maintenance, but some for clubhouse expansions and other capital improvements.
“I think ClubCorp, when they do those kinds of big projects, calls them ‘reinventions,’” Munsch says. “I won’t use those words, but we have six major projects in the works right now in addition to spending a lot on deferred maintenance and all the little things that let golfers know that things are different and better.”
Though he offers a nod to ClubCorp, Munsch is in a much different environment than his old employer. Only 23 clubs in the Arcis portfolio are private. Fully 60 percent are daily-fee, with another dozen municipal courses under management.
“It’s a different model in that our daily-fee courses might focus less on food and beverage than some of the private clubs, and our facilities might have a different look and feel depending on the market and the type of operation,” he says. “But, there’s definitely a different attitude at all the facilities.”
Part of that attitude is a more relaxed, family-friendly atmosphere, one that includes music on the driving ranges, monthly practice and lesson plans for beginners, and “ladies and kids play free” programs.
“As an industry, we’re still oversupplied in golf courses—we can’t hide from that fact,” Munsch says. “We’ve stabilized at 25 million golfers, and it’s up to us to work with those numbers. In order to do that, the family has to be involved, and we have to make it fun.”
To illustrate his point, Munsch points to Topgolf, the high-tech entertainment complexes that have turned the traditional driving range concept on its head. “Topgolf has proven that if you make the game fun, people want to pick up a golf club and hit a ball,” he proclaims. “That’s the first step. Those of us in the golf industry have to make sure we provide those [types of] opportunities.”
With that enhanced focused and the backing of equity funding, Munsch is bullish on his company and the industry as a whole. “We’ve got some great things going on in golf,” he says. “I feel better about the game now than I have in a long, long time.”
Steve Eubanks is an Atlanta-based freelance writer and frequent Golf Business contributor.