By Hil Anderson
American Golf was once the largest golf course management company in the world. Now the company is a subsidiary of Drive Shack Inc., which hopes to be the king of mini golf.
Drive Shack had a public offering of additional shares last month, selling $50 million in stock. At the same time, it announced its aggressive growth strategy for its new Puttery chain, which it says will be more profitable than its Topgolf-like driving range concept.
The Puttery elevates the familiar mini-golf concept to a mature audience looking for a night on the town with friends. It’s basically Topgolf meets mini golf.
Drive Shack, hopes to open its first “Puttery” chain in the Dallas area this summer and to have 17 in operation by the end of 2022. It will cost $7 to $ll million in development costs, compared to $25 to $40 million for its driving range concept.
The Puttery will combine auto-scoring technology, with a lively cocktail bar and food to cater to groups of friends and event planners looking for new venues and golf-oriented experiences that don’t require the time, planning and physical exertion of 18 holes. Drive Shack has partnered with PGA star Rory McIlroy, to launch the concept.
But the concept has still not been proven successful.
Meanwhile, the company has four Drive Shack locations that were impacted by the pandemic. But it is doing well financially, thanks to American Golf’s 60 traditional golf courses under management.
Drive Shack has $50 million in assets and an EBITDA or $36 million. It sold several golf courses in the past few years to generate funds to develop Drive Shack and now Puttery facilities.
The idea of a golf-oriented destination for the millennial crowd or for group events appealed to McIlroy, who has entered into a non-binding memorandum of understanding on the partnership, which includes a personal investment by the four-time major winner.
“I am thrilled to partner with the Drive Shack team on their new entertainment golf experience,” McIlroy said in a Drive Shack release. “Once COVID-19 is under control, the ability to combine high-tech mini-golf with a high-quality food-and-beverage menu will make Puttery a great experience for any social gathering.”
The Puttery brand debuts this summer at The Colony/Dallas, an upscale Texas development that is home to three golf courses. The Puttery venue is an enclosed two-story building that occupies a smaller footprint than the Drive Shack driving ranges, allowing it to fit more easily into a denser neighborhood. The mini-golf course is surrounded with private seating areas, cocktail bars and DJ booths that create an exciting nightclub atmosphere. The food and beverage offerings skew toward the upscale, and an automatic scoring system relieves putters of the need to write down the strokes.
McIlroy’s exact role in the Puttery development is unspecified, but Drive Shack Chairman Wes Edens said the former World No. 1 had already provided input and would continue to do so as the rollout continues.
“Rory is one of the best golfers in the world,” Edens said. “His experience and viewpoint that he will bring to Puttery as we grow and expand will be invaluable and really help further fuel our success.”