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April 2019

The Pillsbury Effect

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ClubCorp’s expanding, but remaining true to its roots

By Steve Eubanks

David Pillsbury can juggle. Not with his hands or his feet; not like a clown with bowling pins or like a bored teenage golfer with a new sleeve of balls.

Pillsbury is far better than that. The balls he has in the air would make a magician blink. And he keeps them there with ease, catching one and tossing another while talking to you like a long-lost friend from high school.

“Everything old is new again,” Pillsbury said recently. “The units in our business are still about dues, member retention and new member growth. And how you use your amenities to drive those three levers.” 
Pillsbury hasn’t been the CEO of ClubCorp, the largest owner and operator of private clubs in the world, for a full year yet. But you marvel when hearing him run through the litany of seemingly disparate interests that make up the company. In no time Pillsbury has you believing that there is no philosophical conflict, no space at all, between the company built by Bob Dedman Sr. on the philosophy of private membership — a company that, at one time, owned more private dining clubs that required jackets and ties than many fast-food restaurants had stores — and a brand like BigShots where patrons in Drew Brees jerseys drink beer, yell “Booya,” and hit balls into a simulator while playing games called Knockout, Pinball and Island.

“BigShots is clearly an opportunity to take advantage of the great work TopGolf has done in introducing the game to people in massive numbers,” Pillsbury said of ClubCorp’s most recent acquisition. “Our goal is to broaden our funnel through BigShots, to introduce people to the sport in an incredibly low-friction environment. We hope to then use programming to migrate those people to our clubs and make them consumers of our core product.”

That core product is still private club membership. But as Pillsbury quickly adds, “Having said that, (BigShots) happens to be a good business in and of itself. It really is the perfect combination for us, especially as we transition into more of a lifestyle-centric company with golf still at our core and as our most valued membership category. We’re broadening our entry point through BigShots and through other things like wellness and fitness and renewed emphasis on racket sports and things like pickleball.” 

BigShots is the big deal for the first part of 2019. With a footprint smaller than TopGolf and an emphasis on smaller markets, there is room for more than one brand in the golf/entertainment space. The big differentiator for ClubCorp is the fact TopGolf facilities are all corporate owned while BigShots is a franchise. “Anyone who is interested in getting into the space, who has some capital and some land, that option is now available,” Pillsbury said.

There is also something called BigShots Lounge, which is simulator golf with all the technology but in a small corner of your restaurant or store. According to Pillsbury, whose voice draws you closer as he’s describing the scene, “You buy the franchise and use it as an add-on to any sports-bar environment. So it could be a self-serve kiosk with all the BigShots gaming. The franchisee can work out a revenue share with the restaurant owner.

“We think BigShots Lounge has tremendous market opportunity. It’s a terrific enhancement to anyone trying to improve their retail experience.” 

But BigShots and BigShots Lounge are only two of the balls Pillsbury has airborne. He’s also retrofitting driving ranges at ClubCorp facilities with similar technology, although most likely without the game components.

ClubCorp Gets Physical
Then there is the emphasis on fitness. In Georgia, at one of the clubs ClubCorp purchased from Sequoia Golf, a new state-of-the-art fitness facility has been packed every morning at 6 a.m. since it opened. The two-story facility, complete with a full complement of classes by certified instructors, has put a big dent in the mom and pop gym business in the area.

That is not an accident. Pillsbury knows that when a recession hits and family budgets get tight, if the cost cutting comes down to dad’s golf membership or mom’s yoga classes, mom will win.

“We’re creating world-class fitness facilities and programming,” Pillsbury said. “The programming is where we’re evolving rapidly so that our members don’t feel they need to belong to a fitness facility anywhere else.”

ClubCorp is also looking to acquire a few freestanding gyms away from their existing clubs but in an area where one fitness center could facilitate a concentration of ClubCorp members.  

The Core Values
As passionate as he is when he talks about fitness and pickleball, Pillsbury is, at his core, a golf guy. After graduate school at Southern Cal where he got his MBA, he joined American Golf and rocketed up the ranks to become co-CEO with Joe Guerra. Ironically, Guerra was the founder of Sequoia Golf, which was purchased by ClubCorp before Pillsbury’s arrival. And in another ironic twist, Jim Hinckley, former CEO of ClubCorp, is now the CEO of American Golf. 

Pillsbury left American Golf in 2003 and went to Nike for a year before landing at the PGA Tour where he ran the TPC properties until 2008. Then he was promoted to executive vice president of championship management. He was responsible for 10 PGA Tour events including the Players Championship.

After that, he made a hard left turn.  

“I wanted to run a company,” Pillsbury said. “An old friend of mine, Bill Horne, came out of the golf business. Bill and I had met at a conference and tried to do a deal. We were never able to make that work but Bill and I became close friends. Then, he created Laser Spine Institute (a collection of minimally invasive spinal surgery centers) in 2004 because he had a neck injury that was resolved with that technology.

“Well, the PGA Tour had selected Jay Monahan to be commissioner. So (becoming commissioner) wasn’t an avenue for me. Bill contacted me. He stepped aside and asked me to be his successor as CEO of Laser Spine Institute. I thought it would be great experience.”

Pillsbury stayed at LSI until ClubCorp’s new owners came calling.

“What I found is that health care is very much like hospitality,” he said. “You’re caring for people and impacting their lives. But I’m very happy to be back in the golf business where I don’t have to worry about billing codes and the regulation and the massive complexities associated with heath care.” 

Setting the Table for the Next Course
Caring for a variety of people in his new role at ClubCorp keeps a few more balls in the air. Two of the new projects are a fee-for-service management division called ClubLife, and an under-the-radar division called The Collection that provides a range of services to high-end, member-owned clubs that need help on the sly. 

“The Collection might end up being 20 clubs that are ultra-high-end and member owned,” Pillsbury said. “If I’m a member-owned free-standing club that has the same needs for professional management as any other club, and I want to cherry-pick the resources of ClubCorp without actually becoming a part of ClubCorp, how do I do that? The Collection gives the board that opportunity.

  “It might start out as a consulting agreement where we bring a team in and look at ways they can do things differently to add some efficiencies. It might be that we bring in our purchasing benefit, which is significant. We might need to review the membership strategy.

“The truth is, we have the full range of business solutions for a high-end club that has the same challenges as the club that needs fee management. (The exclusive high-end club) still needs to be relevant. It still needs to focus on wellness and fitness and be contemporary in dining. We can help them conceptualize all of that. If (the board says) they want a fitness center but they aren’t ready to pay to have one built, we can say, ‘Okay, we’ll do that. We can build it for you.’ And we structure an agreement in a way that works for everyone.   

“On the other hand, ClubLife management solutions is designed to compete directly with Troon.

“Then you have ClubCorp, which is divided into Premium clubs and Classic clubs. And those are your business verticals on the club side. They target different audiences and leverage each of those verticals against this massive infrastructure we have created, which is unlike anything else in the industry.” 

At this point Pillsbury has a shag-bag full of balls in the air. But that doesn’t stop him from making a final point, which is, to him, the most important point of all. 

“We sell lifestyle and community,” he said, punching each word so you don’t miss it. “The club is a gathering place for people with common interests. Every passion has a community. We are a gathering place for those communities. Whether it’s wellness, fitness, food, racket sports or golf, we’re your gathering place. 

“It’s not about exclusivity. It’s about connecting. If you go to our clubs, you’ll see that connection. You’ll feel that community. That’s what it’s about.”    

 Steve Eubanks is an Atlanta-based freelance writer and New York Times bestselling author.

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