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Making the green

ClubLink's aggressive expansion is shaking up
the grand old game. But its founder makes no apologies

She couldn't have been more than about 20, though it was difficult to gauge, given that she was covered in orange body paint marked with black tiger stripes. Pointy felt ears sprouted from her head and long, whiskery pipe cleaners were glued to her face. She was, except for the paint, naked and she was caged. As a publicity stunt, it seemed unimpeachably clever, though with the sound of the television screen off we were unable to ascertain the product or cause. It hardly seemed to matter. These things are about getting attention, after all, about being noticed and remembered.

Given his extensive marketing background with family-owned and -operated businesses, it was only reasonable that such an image should not so much catch as kidnap the eye of Bruce Simmonds, the founder and president of ClubLink Corp. In just seven years, ClubLink has bought or built 31 golf courses in Ontario and Quebec, most of them around Toronto and in the pricey cottage country surrounding Lake Muskoka. It is now the largest owner, operator and developer of golf courses and resorts in the country, and it is pushing further into the Ottawa and Montreal areas. That rapid growth, and the aggressive commercialization and price increases that have come with it, has created quite a stir in the marketplace.

ClubLink has taken golf not to new heights or depths but, rather, to a different latitude, to a place where the game is not a cherished pastime, but a value-added component to doing business. Bruce Simmonds makes no excuses for this, as he said repeatedly during our interview in The Bistro in the King Valley Golf Club in King City, north of Toronto. The casual-yet-elegant room is certainly no snooty members' lounge at an old country club. It's supposed to be a little more laid-back. Still, it's hardly the kind of place where you'd expect the ambiance to include a naked woman in a cage impersonating a tigress.

"Unbelievable," said the burly, bearded Simmonds, 47, grinning, shaking his head and interrupting our interview each time the tigress popped onto the TV screen. "What's that all about?"

The question went unanswered, despite the ironic application of the question one might make towards ClubLink itself: What's that all about? From Bay Street financial analysts to golf commentators to golfers themselves, there is no shortage of conflicting opinions about ClubLink. Many people like the modern face the company has brought to the game. But there are also persistent complaints that traditions are being destroyed.

Yet you can just as easily ask, Why the fuss? In many ways, ClubLink is a small fish. Even in the Toronto area, it owns just a fraction of the private and public courses. Why indeed? "That's a good question," mused Simmonds, munching on his sandwich. He shrugged. "Jealousy. Canadian passivity. The entrenched attitudes in the golf business. I'm not sure. It could be any one of those. All we've done is taken golf and applied sound business principles to the game. That might be the problem."

How about, Is most definitely? Golf is unique among sports in that most of those who are passionate about the game actually play it. When was the last time you saw a hockey fan or a football fan strap on a helmet? Historically minded golfers tend to feel a proprietary link toward a game with centuries of lore and tradition behind it. In the ClubLink ethos, history and tradition are still there, but they have been grafted onto the outer edges, and matter only insofar as they contribute to the bottom line.

Is there anything wrong with this? Ethically and practically, no, not really. It may be inevitable. It may even be necessary. But it doesn't make it any easier, emotionally, for traditionalists to swallow.

In 1987, Simmonds, along with two of his brothers, all of them connected with the running of the family electronics firm, A.C. Simmonds & Sons Ltd., bought a parcel of land off the Cherry Downs Golf and Country Club near Pickering, east of Toronto. Simmonds wanted to build a home for himself next to the course to which they belonged. He was a recreational golfer back then, and even today, as the ruler of a golf course empire, he still treats golf as a diversion that mixes nicely with business.

The land was paid for, in part, with profits the family had made by turning around the failing battery company Dynacharge Canada Inc., which they acquired in 1982 for $125,000 and sold to Duracell in 1985 for $10 million. By the late '80s, Simmonds noticed that Cherry Downs was not maximizing its profit potential. The family bought the course for an undisclosed sum, and Simmonds ultimately turned his talents to running it. He'd been a member at a golf course for 15 years and, he says with a laugh, "what I knew about running one was just enough to make me dangerous."

Simmonds turned around Cherry Downs by doing a very simple thing: He stopped treating it as a golf operation. "Golf is a capital-intensive business," says Simmonds. But even people who ran courses traditionally looked at golf as fun. "People have to start realizing that somewhere along the line, there has to be a return investment to either a businessman taking the risk or to the club ownership," he says.

The new approach began with basic things such as consolidating and streamlining food and beverage practices, including the eradication of the outdated and inefficient restaurant "chit" practice in which members would fill out orders in pencil and then be billed later. Simmonds replaced it with a computerized billing system.

After he got Cherry Downs back on its feet, Simmonds began wondering about making golf courses a more welcoming place for members to transact business. Justin Connidis, a high-powered securities lawyer who once worked for the Ontario Securities Commission, was with him from the start. Now ClubLink's senior vice-president of corporate development, Connidis says "the old private clubs were old boys' clubs with homogeneous memberships. These clubs were not receptive to members bringing in guests and business clients." Members would be allowed at most a handful of guests per month, with strict limits on the number of times any one guest could be invited to play in any year.

"Most of these private clubs had environments uninviting to a new golfer," he says. "Up-and-coming businesspeople were not comfortable with entertaining at these clubs."

Two key concepts that Simmonds mapped out before taking ClubLink public in 1993 were "reciprocal play" and "clustering." Reciprocal play meant simply that any ClubLink member could play any other course in the ClubLink family. Clustering meant that it would become company strategy to create DEW lines of golf courses around major metropolitan areas. That would attract golfers of all stripes, and reciprocal play would allow ClubLink to use its various private courses for corporate events on low-play days.

"We knew," says Simmonds, "that the highest availability for corporate play was on Monday and Tuesdays, because that's when most members go back to work after the weekend. So what we did was make all the corporate play on all our private golf courses on Mondays and Tuesdays. So the club, say King Valley, was making, what, five grand, on any given Monday. Now, with a corporate event, [it] was making sixty. And when there's a corporate event at King Valley, a member can go play one of the other courses in ClubLink at no charge."

Time was also on Simmonds's side. Toronto's stock market and real estate booms of the 1980s had both fizzled. Several high-end, so-called equity courses and adjacent housing developments had gone off the rails. Prospective members had begged off on initial investments of $50,000 or more. Subdivisions begun with borrowed money were flagging. The market had oversupplied itself in high-end product.

King Valley, with PGA Tour star Curtis Strange as its celebrity spokesman and ranked as one of Canada's top 10 courses by SCORE magazine, was barely completed before it ran into trouble. That was Simmonds's big break. ClubLink went public in 1993 and acquired King Valley from the Frey family of Switzerland for $11 million, about 35 cents on the dollar compared with the original cost. Simmonds also picked up Emerald Hills, for which Japanese investors had ponied up $18 million, for $12 million.

Simmonds readily acknowledges that he feasted off the misfortune of others, but points out that he and his investors were the only ones willing to take the chance. "There's no way we could have done it," says Simmonds, "if we'd had to pay top dollar for all these properties. We got them in fire sales. That's how we got started."

Today, ClubLink has an asset base with a book value of $487 million. That now includes Canada's best-known golf course, Glen Abbey, the Jack Nicklaus-designed track in Oakville, Ont., that has hosted and will occasionally continue to host Canadian Opens. ClubLink announced it was buying the course and some surrounding property in the fall of 1998 for $40 million. The company still has more courses in the hopper in Ontario, most notably in the Muskoka region. It also controls 11 courses in the United States.

But the strains of that aggressive expansion are showing. ClubLink's revenues soared by 36% to $100 million in 1999, quadruple what they were in 1996. However, profit declined to $7.4 million from $10.6 million in 1998. For the first quarter ended April 2, 2000, the company reported a loss of $1.1 million, compared with a small profit of $71,000 in the same quarter of 1999. ClubLink's stock price has also sagged. From a peak of over $16 in early 1998, its shares have declined more or less steadily to below $6 in early July.

Much of that is due to non-recurring acquisitions-related charges. "It's true that they have underperformed, based on their stock stats," says Mike Hough, an analyst with TD Securities Inc. "But they did have a number of one-time hits in 1999. Also, [the stock price of] a lot of small-cap companies in Canada fell short of expectations this year, not to mention that real estate and golf-related stocks have not been in high favour just recently."

To help improve earnings, Connidis says that ClubLink recently completed a large internal reorganization, which included trimming overhead and reassigning staff. Hough says the stock price should improve. "They've built a solid foundation, and there is significant growth potential as the courses mature and membership grows and as assets start to produce."

But any time any company's stock languishes, there is takeover talk. In ClubLink's case, a behemoth is already past the gate: giant ClubCorp, Inc. of Dallas, which has a 27% stake in ClubLink. Privately held ClubCorp was founded in 1957, and it owns and operates more than 220 courses, clubs and resorts across the United States, including such renowned professional tournament sites as the Pinehurst, Indian Wells and Firestone country clubs. ClubLink is patterned after ClubCorp in many respects, and its members already enjoy certain reciprocal privileges at ClubCorp courses.

ClubCorp has consistently refused to comment about a possible takeover. But Simmonds does little to dispel the rumours. "If it happens, it happens," is all he will say. "If they buy us out, I'll still be here working the next day."

Whoever ends up in control, the big-box approach toward the golf experience won't change. Yet even traditionalists who are appalled by that approach cannot deny that some of the old practices that ClubLink has swept aside were silly at best, and ugly at worst.

Simmonds says he is proud of getting rid of "much of traditional goofiness of the game." He then launches into a series of mini-rants about old-fashioned golf club rules. "We've axed dress codes," he says. "If someone wants to wear a pair of short pants and basic socks on a hot day...what do I care! You've got these idiotic rules at some private clubs about sock length. I mean, come on!"

Then there were the old-style restrictions on tee-off times for women and children that pushed them into off-hours. "We serve adults, and the children at the clubs are the children of adults. They can handle themselves," Simmonds says. "A family can own a principal and spousal membership, and they can book times whenever they like, man, woman, whatever."

Joe Murphy, general manager at St. George's Golf and Country Club in Toronto, one of Canada's oldest courses, is somewhat bemused by Simmonds's criticisms. "I don't think ClubLink allows jeans or tank tops, so I'm not sure there are any differences between St. George's and a ClubLink course," he says. As for the different memberships and privileges for men and women, Murphy says many couples like them--they often save money.

Murphy also disputes Simmonds's assertion that traditional clubs aren't business-friendly. Murphy says his club and others are just trying to maintain some sensible limits. At St. George's, many members find cellphones distracting, so the club allows them on the course for outgoing calls only. "Private-member clubs do not live in the Dark Ages," Murphy says. "Our members are modern-day people who simply enjoy a bit of tradition, but more so the high standards and related discipline that comes with maintaining it."

In some ways, ClubLink and the traditional clubs are targeting different markets. Murphy acknowledges that the ability to play many ClubLink courses under one membership is very attractive to golf enthusiasts. But he says that at traditional clubs, "there is a sense of ownership and camaraderie--more so than at a ClubLink course."

Lest anyone think that the hoi polloi are roaming around ClubLink's top-end courses, there are also the steep fees to consider. At King Valley, the initiation fee for a single principal membership is $60,000, and the annual dues are $4,200. To add a spouse, it's another $30,000 for the initiation, and an additional $2,725 a year in dues. At The Lake Joseph Club in Muskoka, the initiation fees are the same, but the annual dues are $3,175 for a principal membership and another $2,250 for a spouse.

ClubLink has also come under fire for hiking fees at its public pay-as-you-play courses. Last year, it raised the price of a round at Glen Abbey

by $70, to $225. This year the price is $230. At Gormley Green, a more typical public course located just north of Toronto, the fee on a Thursday or Friday is $50, but even that is $16 more than when ClubLink purchased the course in March, 1998.

Author, broadcaster and columnist Lorne Rubenstein, who is one of Canada's most respected authorities on golf, complains that, for ClubLink, "the game is a four-letter word spelled 'buck.'"

That charge draws a hot response from Simmonds. "What bullshit! Shouldn't we be allowed to make money at the game? Yeah, we've had an impact on the upward pricing in the market. But we're adding value."

Rubenstein says the added value is questionable. In a Globe and Mail column last summer, he recounted a round with two Gormley Green regulars who wondered whether they were getting their money's worth. There were several annoyances--the driving-range practice balls were too soft, many of the sand traps were filled with water and none were playable, etc. One of the regulars also lamented that ClubLink had "taken the charm and aura out of the place."

Tim O'Connor, ClubLink's director of communications, insists that sometimes changes take time to appreciate--things such as grass-seeding programs, improving drainage, removing clover, and cutting greens properly. "Not all these things happen overnight," he says.

But fee hikes did happen almost overnight. Nevertheless, you can also ask whether a public-course golfer who pays just $40 or $50 for a round is even going to care whether the greens are double-cut, or whether there are flowers lining the cart paths by the clubhouse, or whether someone picks up his or her bag in the parking lot.

Simmonds isn't worried. "Just about every survey ever done says that price is about fifth on the list of things people care about when they play golf. The course is number one, second is the conditions, third is the location. Price only matters to a degree," he says, citing both internal surveys and ones conducted by such groups as the National Golf Foundation in the United States. "Besides," he says, "ultimately, this is a free-enterprise thing. No one's forcing anyone to play at any of our courses. If they don't like it, they can play elsewhere."

Simmonds also chuckles about the griping. "Next to politics, we're the topic of more cocktail party conversations than anything else," he says.

Of course, to devotees, golf is much more than a game. It's a passionate way of life, a metaphor for the manner in which one conducts oneself. It's not just five hours out on some parkland hacking around and making a few cellphone calls while your partner tries to putt.

Simmonds acknowledges that, but beyond a certain point, he has trouble understanding it. "I have respect for tradition, but I don't consider the game holy," he says. "I think it's a great game, but it's just a game. I stood on the first tee at Augusta National and, sure, I thought it was a pretty great golf course, but the last thing I wanted to do was get down on my knees and genuflect."

"I respect people who are passionate about golf," he adds. "But I'm not. I'm semi-passionate about it."

Taking everything into account, Simmonds believes he is conducting an entirely acceptable stewardship of the game. He feels he ought to be congratulated for stating that it is no longer the exclusive preserve of white-haired gents behind locked gates. "There's no secret handshake at ClubLink," he says. "The only handshake is money. If you can afford to be a member, you can be a member, white, black, yellow, green, whatever. There's no committee deciding who gets in and who doesn't. If you can afford it and there's room, you're in. If it's full, it's a strict waiting list. Plain and simple."

And in its quest for profit, even devotees acknowledge that ClubLink may be doing a good job of physically improving courses and running them efficiently. But it is doing that to protect its investments, not because its principals cherish the game.

Simmonds makes no apologies for any of it. To him, golf is an opportunity, not a sacred trust. In a society in which the tunes of the Beatles and Bob Dylan have been reduced to corporate jingles, who's to say that he isn't going to be on the winning side of the struggle? People vote with their wallets. You do what you need to do to enhance your bottom line, even if it means singing The Times They Are A-Changin' in front of a bank logo, or putting a naked woman in tiger stripes in a cage to market your product. Hey, it's just business.