Apollo Spends $1.1 Billion to Make Golf Great Again

It turns out that golf, like punk music, is not dead.

Leon Black’s private equity powerhouse Apollo Global Management is betting on the favorite sport of President Donald Trump actually hacking its way out of the bunker it’s been in for the last decade. It’s buying Dallas-based ClubCorp Holdings, one of the country’s biggest operator of golf and country clubs, for $ 1.1 billion.

The deal underlines a quiet revival in a sport that has more than its fair share of negative headlines in recent years. According to the National Golf Federation, the number of first-time players rose to 2.5 million last year, a new record high and a 60% improvement on 2011. The previous record high was back in 2000, when the Tiger Woods effect was at its strongest.

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The improvement is also reflected in ClubCorp.’s performance. It has managed to raise revenue by one-third over the last four years, turning a $ 41 million loss in 2013 into a modest profit of $ 3.6 million last year. It’s had to spend a lot of money to do that, however. Over the last decade, it’s spent $ 690 million (most of it borrowed) to turn its clubs to broaden their appeal and make customers more loyal—for instance, by adding things like splash pads and water slides to their pool areas to make them more family-friendly. The result is that overall revenues are rising (by 3.1% last year), even while golf-related ones are falling (by 0.7%).

Alongside such “reinventions,” it’s also acted as a consolidator: it’s bought up up 56 golf and country clubs for a total of over $ 400 million since 2010. As a result, it’s now almost twice as large as the second-biggest golf club operator in the U.S., with over 200 clubs and 430,000 overwhelmingly affluent members.

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But ClubCorp’s fortunes contrast sharply with golf clubs across much of the rest of the country. A net balance of over 800 closed between 2010 and 2015, some meeting fates that would cause shudders in the White House. Chicago-based clean energy provider Invenegy bought the Tallgrass club on Long Island, NY, last year and is now turning it into a huge solar farm with 125,000 solar panels across its 127 acres (Invenergy claims that the farm will generate ten times more tax revenue for the state than the golf club ever did.)

The National Golf Foundation, meanwhile, says “a further rebalancing of supply and demand is expected to continue.”