By Mike Purkey
When John McConnell walks through the door of the golf shop at Old North State Club, he wears a knowing grin, the kind of smile that suggests he knows something you don’t.
Perhaps he does. Even as the number of country clubs declines and fewer people play golf on a regular basis, McConnell jumps in, scooping up distressed courses in the Carolinas and Tennessee, paying cash then injecting millions more to resuscitate them.
It’s a bold strategy that has captured the attention of a large section of the golf world. On this morning, McConnell doesn’t command the room like he owns the place though, in this case, he does. Of the 12 courses he has acquired since 2003, 10 had negative operating income. Now, nine are profitable. That includes Old North State on the banks of Badin Lake in the Uwharrie Mountains, where McConnell is going to measure his 8-handicap golf game against one of the state’s top courses.
He wastes no time. His 10-minute warmup is brisk but efficient and after a couple of minutes hitting a few putts, he’s ready to go. But right out of the gate, he runs into problems. His opening tee shot comes to rest in the grassy face of a fairway bunker on the par-5 hole, and it’s a delicate balancing act just to take a stance. His second shot moves the ball a considerable distance down the fairway, given where it was lying. His third shot finishes nearly hole high about 40 feet from the hole. He chips his fourth to within 3 feet.
But he misses the short putt for par and a loud “Arrgghhh” escapes. Although McConnell is not playing for anything other than a good impression, his score still matters.
McConnell, 66, is fit and can move the ball a fair distance with his driver. But admittedly, he doesn’t hit a lot of greens and has to rely on a sporty short game, which is certain to drive his regular group crazy. He says he gets in one round a week at Raleigh Country Club, where you have to be good around the greens on the complex Donald Ross design.
It was at the central Raleigh club where McConnell first dipped a toe in the waters of owning his own course. The club sought bankruptcy in 2003, facing $7 million in debt it couldn’t pay. McConnell could — he made more than $60 million when he sold his Medic Computer Systems software company for $923 million in 1997. He then became CEO of A4 Health Systems, which fetched $272 million when it was sold in 2006.
Though McConnell played often at Raleigh Country Club, he wasn’t a member until buying the course in 2003. “I thought I could do something for the community,” he says. The purchase of the club launched McConnell Golf and a stir when he put a rule in place that anyone who wanted to join had to have a 15 handicap or better. It’s never been enforced.
Today, McConnell Golf has more than 1,000 employees at clubs from Myrtle Beach to Asheville. During our round, McConnell’s cellphone rings several times and each time he apologizes. There is someone at Wells Fargo he needs to speak with, and the members of the Elks Club, who own Southern Pines Country Club, are set to vote whether to sell to McConnell or to the Bell family, owners of Pine Needles Lodge and Golf Club in Southern Pines. The members originally favored the Bells before switching to McConnell and then eventually deciding not to sell after all.
A business that began with the idea of rescuing a single course has grown far bigger. McConnell Golf has paid about $25 million for courses designed by name-brand architects such as Ross, Tom Fazio, Pete Dye and Arnold Palmer and another $30 million to improve them. The company has refined this strategy of immediately pumping money into maintenance and sprucing up clubhouses. “We’re at critical mass,” McConnell says. “I sweat now. [But] there’s always pressure on us to keep expanding.”
This day, his golf game is pressured by some bad breaks on the front nine of Old North State. At the seventh hole, a downhill par-3 of 161 yards, he pushes an 8-iron hole high in the right fringe about 40 feet away. “This is embarrassing,” he says.
It shouldn’t cause him grief, because it’s not that bad a shot. In fact, he easily two-putts for a par. But he expects excellence, whether it’s from his golf game or his private club portfolio.
As we make the turn, a group of members lets us play through at the 10th tee. One of them says, “If we had known it was the boss, we’d have let you through sooner.”
On the back nine, we move back a set of tees so, McConnell says, “It will make this course a little tougher for you.” Old North State, one of Fazio’s finest, is a true enough test from any set of tees. It is consistently voted among the state’s top 10 courses in Business North Carolina’s annual ranking.
“Buying this club put us on the map,” McConnell says.
As we reach the 18th tee, I tell him that I bet his results would improve if he were playing his buddies for a few bucks instead of entertaining a writer. He lights up. “Oh, I’d play much better,” he says with a broad grin.
Courses: Owns 10 and manages Grande Dunes Members Club in Myrtle Beach and the Raleigh Golf Association, a 27-hole daily fee complex.
Employees: About 1,000
2016 revenue: $45 million
Featured photo of John McConnell by John Gessner