There are a few business cases I will not bore you with that show how a badly managed change to a company kills the business and it could be that this will hold true with the way the sale of ClubCorp of America to KSL is being managed.
As all know, ClubCorp was sold to KSL Capital Partners a few months ago and the close on the deal is to be finished in the next few days. What is know of the deal is very little other than there is a lot of money at stake and there are a lot of members of a lot of the private country clubs owned by ClubCorp that are upset that they have not been told ANYTHING.
…OH, yes, there was a message saying ‘no changes being made at this time’ and comments made by the management to the members leader board that ‘it is business as usual’ , but being a business person who has seen many of the deals go down, it is by far not going to be business as usual.
As the eleven hour rolls down to the close of the deal you can rest assure a plan has been in place for some time. With the estimated $1.2B involved in the sale there is more than likely at least twice that much in access which includes a large number of private country clubs that need major updates to their facilities.
With a need for immediate capital investment to be made hitting a new owner in the face the decision was probably already made sometime ago to put a Band-Aid on the books and flip the deal as soon as possible. Or break up the properties into packages that include profitable clubs with non-profitable clubs in a take it or leave it package…this way the profitable clubs lure the buyers into taking the package that includes clubs that need millions of dollars of upgrades.
Either way the writing on the clubhouse wall is clear what the plan is going to be; pull out what is profitable and ditch the rest… KSL is not in business to manage private clubs; they are in the business of making money for their investors. So what else would be the plan?
There has been some move in this direction already with KSL quickly moving all of the CCA Resorts out of CCA and placing them into the KSL Resort Management group which insures that KSL will keep the cream of the crop. So where does that put the older clubs…the clubs that are celebrating their 50th year?
Who knows the plan? Not the members. And why not?
So will it be the same after the sale? Probably not. Since KSL feels it is not important to tell the memberships of the club what the plan is and how each member fits into the plan then you can take it that they don’t care much about the members or trust they would understand. Trust…yes that is what will not be the same after the sale. Will they hope those members who voice opinion go away? Probably. So why should the membership trust that the investment they made each month to keeping the club a float is going to go to improving the clubs so they can be used as a Country Club? Well you can trust that members will remember how they were treated during this deal and it just will not be the same as before the sale…
Look for more to develop in the next few days.