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THE PALM BEACH. POST JANUARY 23, 1989
VILLAGE OF NORTH PALM BEACH
HISTORIAN
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By KEVIN MILLER
Palm Beach Post Staff Writer
very company watches the
bottom live. Down is bad, up
is good.
That's the easy part.
But for Golden Bear Interna-
tional, there is a more ephemeral
aspect to the balance sheet. Moni-
tored every bit as closely as profit
and loss are public opinions and
perceptions about the company's
single greatest asset — founder
Jack Nicklaus — and his reputation
f or integrity.
There are surveys and market
studies. There are live -audience fo-
cus groups, all geared toward un-
derstanding what the public thinks
about Nicklaus. So what if he's a
great golfer -- is he a good guy,
honest? And if he's honest, does
that make you any more likely to
buy a golf bag or a home from him?
"Consistently through the
years, the qualities of personal in-
tegrity, believability, honesty, have
always come through tremendous-
ly high in our research," said Rich-
ard Bellinger, chief operating offi-
cer for the North Palm Beach -
based company.
Those intangibles have built
Golden Bear International into a
multimillion -dollar business exten-
sion of the legendary golfer, who
last week was honored as The
Palm .leach Post's Business Lead-
er of the Year. The award has been
given annually since 1978 to those
whose business success and com-
mitment to community or charita-
ble causes can serve as examples to
others.
At an awards ceremony in New YorK iasl year, INIUKIdU5 waw
20 mayor golf titles
named Golfer of the Century by `Golf' magazine.
A charmed golf career — 20
major championship titles in 27
years, including a record six Mas-
ters victories — provided Nicklaus
with fame and fortune, twin fuels
with which to build his business.
From his sixth -floor office at
Golden Bear Plaza on U.S. 1, Nick-
laus runs an international enter-
prise that generates products and
services worth $350 million to $400
million a year. The ventures range
.from golf course design to real
estate development to managing
the Jack Nicklaus and Golden Bear
trademarks on clothing and sport-
ing goods.
In addition, Nicklaus is a 20
percent owner of the MacGregor
Golf Co., whose management re-
ports to Golden Bear, and his best-
selling Golf My Way video
spawned Jack Nicklaus Produc-
tions, a video company directed by
former ABC sports producer Terry
Jastrow.
Golden Bear employs 72, about
40 of whom work in North Palmi
Beach. It has international offices
in Monte Carlo, where its European
operations are based, and is looking
for office space in Hong Dong or
Japan to take advantage of golf's
enormous popularity in the Orient.
MLLAGE of NORTH PALM BEACf
HISTORIAN
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AT A GLANCE
President and CEO: Jack Nicklaus
Chief Operating Officer: Richard Bellinger
Headquarters: North Palm Beach
Core Businesses: Jack Nicklaus Golf Services designs, builds
and maintains golf courses; Jack Nicklaus Marketing Services
product endorsements and other corporate relationships; Nicklaus,'
Sierra Development Corp. develops luxury residential real estatE
around Nicklaus -designed golf courses; Jack Nicklaus Productions —
sports videos; _MacGregor Golf Co. golf clubs, equipment
Employees: 72, including about 40 at Golden Bear Plaza
Financial: Golden Bear, a Subchapter -S corporation, does no
release financial data. Nicklaus' products and services produc(
about $350 million to $400 million in annual sales, Bellinger says
but only a portion of that translates into revenue (royalties, fees
etc.) for Golden Bear.
VILLAGE OF NORTH PALM BEACH
_ i STO R IAN
PHOTOS COURTESY OF GOLDEN BEAR INTERNATIONAL
Nicklaus and his wife, Barbara, have five children (clockwise from
center): youngest son, Michael; Jack Jr.; Steve; Gary; and Nan.
P4
About 60 percent of its business is
overseas.
For Nicklaus, a Lost Tree Vil-
lage resident who turned 49 Satur-
day, the key has been concentrating
on the areas he knows best.
"The majority of my business
activities go around golf course
design," said Nicklaus, whose $1
million -plus design fees are two
and three times those of his com-
petitors. "That's because I happen
to enjoy. that — I enjoy painting
that picture and I think the future
of my business largely revolves in
that area."
It wasn't too long ago that Gold-
en Bear's future was much less
certain.
Projects turned sour
In the mid-1980s, the company
found itself unable to meet com-
mitments on two luxury residential
projects — Bear Creek in Murieta,
Calif., and St. Andrews in Hastings -
on -Hudson, N.Y.
Though Bellinger said commit-
ments eventually were met in those
two projects, the situation ap-
peared to threaten the very thing
on which Nicklaus had built his
business — personal integrity.
According to J. Robert Sierra,
Nicklaus' current partner in real
estate construction, Nicklaus made
himself vulnerable in those situa-
tions by being a minority partner
with little control - something
Sierra characterized as investing
"to be polite."
When things soured, Sierra said,
investors turned to Nicklaus for
answers, ever though he hadn't
created the situation in the first
place.
"We've gotten a lot better at
saying no," Sierra said.
In September 1985, Nicklaus
took bold steps to get his company
back on track. He parted — ami-
ably, Bellinger says — with long-
time business partner Charles Per-
ry, who had led Golden Bear into a
number of business relationships
that had growth potential but little
to do with the areas in which Nick-
laus was most comfortable.
Nicklaus says he and Perry
simply "went in different direc-
tions."
"He wanted to expand, and I
didn't," Nicklaus said. "I just want-
ed to get back into the basics and I
just wanted to get back into doing
things that I knew more about —
and if I was to expand something,
expand the things that I really had
control of.,,
Nicklaus formed an executive
committee to counsel him on tech-
nical areas of the business. The
committee was made up of Bel-
linger, then the chief financial offi-
cer; George Chane, a friend and
retired manufacturing executive
Nicklaus had hired to help manage
the MacGregor Golf Co.; Tom Pe-
tersen, a longtime associate with a
background in banking; and David
Sherman, an attorney for Nicklaus.
"Jack knew he did not have the
expertise himself — the business
acumen from a technical stand-
point - to run it on his own, so he
needed to surround himself with
people wh® knew his business and
who he had confidence in," Bel-
linger said.
With Sherman's guidance, the
company eventually worked itself
out of dozens of business arrange-
ments — everything from oil and
gas investments .to real estate spec-
ulation — that had little to do with
the company's' new and narrower
focus.
"We had over 70 companies
here that just had to be eliminated,
liquidated, terminated, bought into,
bought out of — whatever we had
to do to get this on a more stream-
lined, organized manner," Bel-
linger said.
For Nicklaus, the moves have
paid off. "The difference between
our balance sheet now -and three
years ago is night and day," he said.
Still develops real estate
Golden Bear still develops real
estate; but with much tighter con-
trol over the projects it undertak(
Nicklaus/Sierra Development C(1,,
managed by Sierra from his Tampa
headquarters, develops secured
communities around . a Nicklaus -
designed golf course and sticks
the sale of home sites. The horn
built by other companies, usua
sell for upward of $500,000.
The developments include sc
out Wynstone near Chicago e
VILLAGE OF NORTH PAtJUt BEAM
HISTORIAN
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The Nicklauses savor Jack's victory in the 1962 U.B. ' open.
CAREER HIGHLIGHTS
Jack !Nicklaus facts and figures, 1962 through 1988
Career Finishes: official tour victories: 71; 2nd place or ties: 58;
3rd place or ties: 36
Career Tour Average: 70.78 strokes per round
Career official Tour Earnings: $5,005,826. Was top money
winner eight times: 1976, 19759 1973? 1972, 1971, 1967, 19659
1964.
Major championship Titles: 20 - Masters 6; PGA Champion-
ship 5, United States open 4; British open 3; U.S. Amateur 2
International and other Victories: British Open 3; Australian
pen 6; World Series of Golf. 5; Ryder Cup, 5 wins and one tie
Holes in one: 12
The s oxahatchee Club's golf course was designed by Nicklaus,
one of his five in Palm Beach County. P5
Country Club of the South in Atlan-
ta, which broke ground, in 1985 and
has sold half of its 670 home sites. A
development - in the Weston com-
munity near Fort Lauderdale
should open sometime next year.
. Sierra said he and Nicklaus now
do" conservative sales projections
that - look at longer -than -normal
time frames and build in contingen-
cy dollars for problems that may
arise.
"We bring in investors who un-
derstand that and 'are willing to
ride out the storms," Sierra said.
Nicklaus says he is content to
leave "nuts and bolts" technical
management of real estate and
other activities to his management
team but Bellinger said there is no
mistaking who's the boss at Golden
Bear International.
calls all the shots," said
Bellinger, who talks to Nicklaus
every day, even when Nicklaus is
touring. "We make recommenda-
tions and sometimes he accepts
them and sometimes he doesn't, but
ultimately he makes every impor-
tant decision in this business."
Tim Hislop, the Golden Bear
vice president who manages Jack
Nicklaus Marketing Services, said
Nicklaus is emphatic about the
type of companies he will be associ-
ated with.
He wouldn't represent a prod-
uct he wouldn't use or couldn't see
himself using in some way," Hislop
i
sad. "The quality is key — we've
got to represent quality companies
and quality products."
JANUARY 23, 1989
PHOTO COURTESY OF GOLDEN BEAR INTERNATIONAL
Although his prize money from tour events has dwindled, the
Golden Bear still feels the competitive desire that made him a
champion athlete, associates say.
BUSINESS LE QFV
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MUJOE OF NORTH PALM BEACH
HISTORIAN
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Long-term endorsements
In addition to product relation-
ships, such as clothing made by
HartMarx, Nicklaus does corpo-
rate endorsements for Lincoln-
Mercury, Unisys, Uniden, RJR-Na-
bisco,
JR-Na-
bisco, Manville -Owens and Great
Golf Resorts of the World.
An important factor in choosing
the deals is the time span of the
agreement.
"Jack doesn't do one-shot
deals," Hislop said, adding that the
average relationship last 10 years.
"We're interested in long-term re-
lationships."
Nicklaus' managers are also
clear as to what belongs to Nick-
laus and what belongs to Golden
Bear: "Our mentality here is that
it's all Jack's — it all goes .into his
pocket, regardless of what division
is producing the revenue," Bel-
linger said.
Golden Bear is a Subchapter -S
corporation, which provides tax
benefits for small private compa-
nies that are generally closely held
within families.
Golden Bear doesn't disclose its
financial data and Bellinger and
Nicklaus deny reports that have
pegged revenues at .$98 million.
"But it's obviously in the tens of
millions," Bellinger said.
_"I have no complaints," Nick -
laws said. "I certainly do very well,
but our business is certainly no-
where near the magnitude people
say it is."
Only a portion of the $400 mil-
lion or so in annual sales of Nick-
laus -related products and services
actually translates into Golden
Bear revenue, Bellinger said; that
usually comes in the form of fees
and royalties paid by the compa-
nies that use the Nicklaus or Gold-
en Bear name.
Bellinger says the biggest dol-
lar producer is neither marketing
nor real estate, but rather the de-
sign of golf courses. There are 58
Nicklaus -designed courses open, 16
under construction and 3.4 under
contract. They are found in 18
countries and 26 states and are
opening at the rate of 10 a year.
Nicklaus has done five courses
in Palm Beach County, and recent-
ly signed to redesign the Champion-
ship course at PGA National.
Though Nicklaus has more than
$ 5 million in official career tour
earnings and was the PGA's top
annual money winner eight times,
that money has never been a major
factor for Golden Bear Internation-
al. Nicklaus' reduced playing
schedule and a back injury last
year have made the winnings negli-
ble - just $28,845 from nine tour
events in 1988.
"Hell, I haven't made a living
from golf in 15 years," Nicklaus
said.
The big money might not be
there anymore, but Nicklaus' com-
petitive desire still burns strong,
associates say.
"He wants to play but he wants
to play well — that's the thing,"
said Larry O'Brien, Nicklaus' long-
time spokesman and friend. "He
doesn't want to be in the position
where the back injury makes him a
76 or a 77 — he wants to be in
contention."
Bellinger said that Nicklaus
"understands that if he were to
retire from golf tomorrow, he
could double the size of the business
the day after."
"But Jack is also a competitor
— a man who is the greatest golfer
in the world," Bellinger said.
"Those competitive fires, you just
don't turn them out."
Golfer of the Century
Last year Golf magazine
named Nicklaus "Golfer of the
Century," based on polls of golf
writers and professionals.
Perhaps his most spectacular
achievement came in 1986, when
he won the prestigious Masters
championship for a record sixth
time.
That win also aided Nicklaus'
business activities.
Nicklaus won the tournament
using an unusual,- large putter he
helped design for MacGregor.
Until . -that time, MacGregor
didn't have much of a reputation as
a putter company' selling only
about 5,000 in 1985.
After Nicklaus won the Mas-
ters, Bellinger said, annual sales
zoomed to 145,000 units of. Nick-
laus' large -response putter,' and
20,000 to 30,000 for the rest of
MacGregor's putter line.
The Masters win also attracted
interest in Golden Bear activities,
Bellinger said, .and that. created
other business opportunities.
Nicklaus makes it clear that his
-business, as well as his golf career,
exist to lay the groundwork for his
family's future. He and his wife, the
former Barbara Bash, have four
sons anci one daughter.
To that end, both he and his
managers frequently use phrases
such as "minimize risk" and d6limit
our exposure." ,As part of the 1985
restructuring, for instance, the
company began lowering its debt
and took a tough attitude toward
acquiring any more.
"Jack's made it no secret that
.. , he would like to see this busi-
ness go on for many, many years
beyond his lifetime for his family's
benefit, and we're working dili-
gently to foster it in that direction,"
Bellinger said.
Sons Jack Jr., Steve and Gary
are becoming involved in various
aspects of the business, and Jack
Jr. now has his own golf course
design contracts in England, Spain
and Ohio. Daughter Nan is an inte-
rior designer in Atlanta, and the
youngest son, Michael, is a ninth -
grader at the Benjamin School 'in
Palm Beach Gardens.
Nicklaus points to golf course
design as one area that has a strong
future for his family.
"It's an area we can develop for
my kids as they come along — so to
use their own expression, they don't
have to step in Dad's footsteps,"
Nicklaus said. "Frankly, I get a big
kick out of doing something that's
going to be here long beyond my
golf game and my lifetime. I do get
a kick out of that; it's a legacy that I
leave."
Nicklaus' concern for his family
also shows in the type of activities
he is involved with outside the
business. Nicklaus and his wife are
supporters of the Benjamin School,
which all five Nicklaus children
have attended. Barbara Nicklaus is
on the private school's board of
directors and Jack is president of
the Benjamin School Foundation.
Rod Kehl, the school's head-
master, said, "There's no doubt in
my mind that Jack and Barbara
have been our biggest supporters."
In addition to contributions to-
ward things such as the school's
gymnasium and playing .fields, the
couple is very generous with their
time, Kehl said.
"Jack does a very successful
golf tournament for us in the fall,"
Kehl said. "We do close to $50,000-
in
50,000-in that tournament and it's always
sold out immediately."
In addition, Barbara Nicklaus
opens their home each year for a
kickoff fund-raiser that Kehl said is
the school's best -attended event of
the year.
Nicklaus said their support. is
just a way to show their gratitude --
as parents.
"Our kids have all gone there,
and I'm thankful for the education
they got, and I like to help them
with other kids," Nicklaus said.
"They provide a lot of scholarships
for kids in there, and they provide
the opportunity for people. of not
necessarily my financial means to
go in there and give their kids a
good education."
VILLAGE OF NORTH PALAA BEACH
HISTOP"
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JAN, p
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Charities -benefit
In addition to school activities,
Nicklaus is national chairman of
the Junior Golf Foundation and has
established an endowment fund
and scholarship programs to aid
young golfers. He also conducts
golf tournaments to aid causes such
as a childrens' hospital in his native
Columbus, Ohio.
Nicklaus is honorary chairman
of the Palm Beach County Chapter
of the March of Dimes.
He has served as a spokesman
or contributor for the American
Cancer Society, the Leukemia Soci-
ety of America, the Multiple Scle-
rosis Society, the National Associa-
tion for Disabled Athletes, No
Greater Love (for children of killed
or missing servicemen), the Special
Olympics, the Boy Scouts of Ameri-
ca, the U.S. Olympic ski team and
the Easter Seal Society. He also has
worked with a number of conserva-
tion and environmental protection
agencies.
"I don't have any real crusades
or causes — the things that interest
us. are the things that have passed
through our lives, that we feel are
important," Nicklaus said.
One thing he's trying to do,
Nicklaus said, is demonstrate that
Florida and Palm Beach County
are good places to live and do
business.
Bellinger admits that the na-
ture of Golden Bear's activities
would make it more logical to be
near the major markets of New
York, Chicago or Los Angeles, but
says Nicklaus' commitment to
South Florida is strong.
"I just think South Florida
through the years has been an area
that has breoded mediocrity,"
Nicklaus said. "Because of our way
of living and the retired people
down here, it's not been a place for
a young guy to come to earn a
living.
"I've tried to get involved
where I feel more and more people
cancome down here to earn a
living g ... not coming to Florida
just to live the life that's here," he
said, "but to work and try to build
something."
Acc4 s8,'6
VILLAGE OF NORTH PALM BEAM
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