When Michael Jordan does anything, it’s big. So when Jordan, whose devotion to golf is well-known, announced he wanted to get into the golf business, it was big news.
In November of 1993, only a month after his “retirement” from basketball, Jordan held a news conference to unveil a new venture, the Michael Jordan Golf Company. The centerpiece would be “high-quality” practice ranges to be developed throughout the Chicago area and the country, perhaps as many as 50.
Jordan said he wanted to bring golf “to less fortunate people who’ve never really had an opportunity to understand or play the game.”
Jordan Golf eventually unveiled a first-class facility in Aurora in 1996, and then opened three retail outlets, selling MJ golf-related merchandise.
It should have been another Jordan success story, but that hasn’t been the case.
Nearly five years since the initial announcement, “Air” golf has hit several slices. A rare inside look at a Jordan enterprise shows not everything he touches turns instantly to gold.
Locally, Jordan Golf still consists of the one facility in Aurora, and while it is busy, it has yet to pay off $3 million in construction costs. Jordan Golf is building another range in Charlotte, N.C., but as of now, there are no firm plans to build more, in Chicago or anywhere else.
The Charlotte facility is being built not by the original founders of Jordan Golf, but instead by AMF Bowling Inc. The original group had the vision, but insiders say it took on lavish and unnecessary expenditures, creating cash-flow problems for the company. Bills were being paid late, and some vendors stopped sending goods.
Jordan’s handlers ultimately took control, selling the company out from under the original group to AMF. The Richmond-based company, which went public last fall, wanted to sign Jordan to promote its bowling centers. AMF officials readily admit they agreed to take on Jordan Golf and its problems as part of the price for getting Jordan as an endorser for its bowling centers.
Yet there are questions about AMF’s commitment to Jordan Golf, and whether it will sacrifice quality for the bottom line. Shortly after taking over, AMF abruptly closed two of the three Jordan Golf retail outlets, shutting down the Water Tower store four days after Christmas and effectively leaving that store’s employees–Michael Jordan’s employees–out of work over the holidays.
“The mission has changed,” said Ann Burton, a former Jordan Golf vice president. “Our mission was to build the highest quality golf facilities worthy of the name Michael Jordan. To a fault, we wanted everything perfect. AMF manages a lot by the bottom line. It’s going to be different.”
AMF concedes that it will run things differently.
“I can tell you that (Michael Jordan Golf) is going to be run a heck of a lot better,” said Larry Spears, who is overseeing the golf enterprise for AMF. Without AMF’s intervention, Spears said, “This company would not have remained viable. It would have been a tough and an embarrassing situation.”
Jordan desperately wants this project to be a winner. He walks through the doors of the Aurora facility only about twice a year, but that shouldn’t be mistaken for a lack of interest. If he has a pet project, it is Michael Jordan Golf.
Jordan, who has been known to play 54 holes in a day, backed up his commitment by investing some money, a rarity for Jordan, whose business endeavors usually are financed by others. According to sources, Jordan made two payments of $500,000 each.
“He attended every board meeting,” said Chuck Reaves, the company’s founder, who sold Jordan on the idea. “He loves golf, and he loves kids, and he was very intrigued about bringing more people to the game.”
Why Jordan and golf? The answer is simple. His track record suggests he can sell anything. Why not golf?
“We felt he could broaden the market for golf, much like Tiger Woods did,” Reaves said.
In 1996, the Jordan Golf Center in Aurora was unveiled. It wasn’t like a “Tin Cup” driving range, with a sparse piece of grass and a little shack with a guy in an old T-shirt handing out balls. Jordan Golf built a facility worthy of a country club.
It features an ornate white clubhouse with a nice grill. There is a Jordan-themed miniature-golf course for kids. For the golfers, it is a practice haven, one of the best anywhere. There are grass tees with excellent target greens and a top-notch short-game area.
“We didn’t want to do just a driving range,” Reaves said. “We want a Disney-like environment for the entire family.”
Company insiders say Reaves made several mistakes. The first was setting up a corporate structure that was extremely top-heavy.
Reaves wanted Jordan Golf to be big, another version of Family Golf, the golf conglomerate that is buying driving ranges throughout the country. With that in mind, he took on vice presidents and an inside staff of around seven people, which created a significant payroll for a company that still was basically one practice range.
“They were top-heavy,” Spears said. “They had big plans, but they put the cart before the horse.”
Reaves said it came down to a question of how fast the company wanted to grow.
“Most businesses start out slow,” Reaves said. “We didn’t feel we had that luxury. We wanted to take advantage of Michael’s name. We wanted to grow the business fast. When you grow fast, you bring on quality people, and that incurs expenses.”
Spending wasn’t limited to personnel. Jordan Golf didn’t go for generic.
Reaves has been criticized for spending too much on the Aurora facility. The clubhouse looks nice, but one insider said: “It doesn’t bring you money in the golf business unless you’re doing wedding business.”
When the company decided to enter the retail market, it signed leases with expensive venues like Water Tower and Woodfield, and some of its merchandise purchases bordered on “ridiculous,” said one of the managers, Alicia Lang.
“This isn’t anything I hadn’t experienced,” Lang said. “I had seen what happens to a company that loves to spend.”
Reaves said, in retrospect, he would have done some things differently at future facilities.
“You learn from the first what you need and what you don’t need,” he said.
The practice range operated in the red, and things would have been extremely bleak if not for the retail operation. Like Nike, the company began to realize that people would buy almost anything with Jordan’s name on it. So they manufactured a line of Jordan golf clothes and accessories and opened retail stores in Water Tower, Woodfield and the United Airlines terminal at O’Hare.
The stores were successful, but the company still had money problems. Last year Reaves tried to raise more money from investors.
The original group believed the Jordan name would be a huge plus in raising capital. Ultimately it learned that investors will pay to see Michael play, but they won’t necessarily play with him.
“Michael Jordan opened a tremendous number of doors,” Reaves said. “But when the day is done, business people make decisions on the merits of the business.”
With money becoming an issue, another cash request was made to Jordan. At that point, Jordan’s advisers, led by agent/attorney David Falk, got involved. Falk and his associate, Curtis Polk, did not respond to interview requests for this story.
According to sources, Jordan lost confidence in the management and direction of Jordan Golf. The company was struggling, and something needed to be done.
Falk’s group contacted AMF to gauge its interest in running a golf center. The company had previously owned the Hogan equipment company and golf courses in South Carolina.
If the name had been Dickey Simpkins Golf, AMF wouldn’t have been interested. But companies don’t turn down a chance to be associated with Jordan. It became a classic case of “one hand washes the other.”
Suddenly, Jordan took an interest in bowling and AMF in golf. On Oct. 21, AMF took over, with Jordan becoming a stockholder in AMF.
“Yes, golf got the negotiations started,” said Merrell Wreden, AMF’s vice president for marketing. “Who wouldn’t want to be associated with Michael Jordan? We look at the golf as a positive for us. Can we make it profitable? Yes, I think we can.”
AMF’s first move was to jettison the original hierarchy, including Reaves. Jordan Golf suddenly got leaner at the top.
If Reaves has any hard feelings, he isn’t saying. He remains loyal to Jordan.
“I can’t speak for how Michael felt, but he’s got some bright people working for him,” Reaves said. “We didn’t always agree, and some decisions were made. They wanted to take the company to AMF, where the infrastructure already is in place. Where you can take it to a new level and make it work. It’s hard to argue with that logic.”
AMF first took a hard look at the retail operation. Spears said Jordan indicated that he was not interested in selling golf clothes.
“His mission was to help the kids play golf,” Spears said. “You can’t do that at the retail stores.”
AMF moved fast. Shortly before Christmas, the company informed employees at the Water Tower location that it would be closing the store’s doors on Dec. 29. The message: Work the busiest time of the year, and then you’re out of a job.
“It was shocking that they closed it down as fast they did,” Lang said. “But at the same time, the employees shouldn’t have been shocked. I had told them, `You’re dealing with a large corporation. You won’t get a lot of notice.’ “
The Woodfield store was shut down in January. Spears says employees were offered jobs at AMF’s bowling centers. Lang said she wasn’t interested–bowling is different from golf.
Jordan has allowed the O’Hare location to remain open. The store does a huge business, “numbers too big to ignore,” Lang said. Spears said the store will have more of an AMF presence to go along with Jordan’s name.
At the golf center, Spears said AMF remains committed to running programs aimed at young players. But at least one group won’t be returning to Jordan Golf this summer, and not by choice.
Marianjoy Rehabilitation in Wheaton has a program that teaches golf to physically challenged individuals. For the last two years it held clinics at Jordan Golf, and program coordinator Donna Strum praised Ann Burton’s involvement.
But when Strum tried to call Jordan Golf this year to make a date, she got no reply. Finally, she gave up.
“I left quite a few messages, and nobody called me back,” Strum said. “I had to take our activities elsewhere. It’s extremely disappointing.”
Spears and head pro John Johnson said they were unaware of the Marianjoy situation. Johnson was quick to note that Jordan Golf conducts clinics every Monday and Thursday for junior golfers in Aurora, all paid for by the Michael Jordan Youth Golf Foundation.
“This is what Michael wants, and we’re committed to it,” Johnson said.
Spears becomes defensive over allegations that AMF is concerned only about profits at Jordan Golf and would sacrifice quality for the bottom line. Said one former Jordan Golf employee: “Watch, they will cut a lot of corners.”
Spears says that is not the case. In fact, he said, the company has spent $125,000 in improvements at the practice facility since taking over.
Outwardly, it appears AMF hasn’t made any compromises.
“Things haven’t changed much at all,” said Johnson, a former pro at Augusta National. “AMF wants us to run a first-class facility.”
AMF is spending $2.8 million for the new facility in Charlotte, due to open this fall. AMF’s Wreden says there are no specific plans to build another. “We’ll continue to look at opportunities,” he said.
Spears said he is scouting locations in the South with the hopes of building another facility in 1999. He said he sent the plans to Jordan.
Spears and AMF met with Jordan in January. Spears said Jordan didn’t say much, preferring to listen. He believes Jordan likes the new direction of his company.
“Listen, you’re dealing with the biggest icon in sports,” Spears said. “If you take care of people, give them a good facility, you shouldn’t screw up.”
The original group felt the same way five years ago, but it didn’t work out for them, even with Jordan’s name. Now the ball is in AMF’s court, and it’s a golf ball.
