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Golf businesses passed down through generations face layers of challenges
By Steve Eubanks
He didn’t ask for it. In fact, he wanted nothing more than for things to be the way they were. But that’s not the hand Chris Cupit was dealt. In 2003, his father, David, passed away after spending 20 years in a wheelchair as a quadriplegic — the result of a tragic hunting accident.
Not long after the funeral, the general manager of the family business, Rivermont Golf Club, moved to Florida. Chris’ sister made it clear that she had no interest being in the golf industry. And the North Atlanta golf market was as saturated as any in the country.
“That was when we had to make some decisions,” Cupit said. “Did we want to sell and get out? Or did we want to do something radical, something dramatic that would separate us from the pack?”
Chris had grown up working in the bag room at Rivermont. He played college golf and worked for a while at ClubCorp, so he understood the business. But he also understood that Rivermont had a secondary set of challenges.
“There’s not a great success rate for family businesses beyond the second generation,” he said. “Family businesses are a tough dynamic in the best of circumstances. Getting the second generation to cooperate and buy in during the transition period is tough. That’s the case in any business, but it’s especially true in golf.”
Cupit’s analysis couldn’t be more correct. The U.S. Commerce Department estimates that 30 percent of family businesses do not survive the second generation. They are either sold or cease to exist. That number almost doubles by the third generation. Many owners pass away without the proper estate planning, which makes transferring business assets tricky, especially when you’re dealing with large pieces of property like golf courses. Taxes are always an issue in such cases, as well as governance and inheritance. Without a path of succession, heirs often look to cash out, which forces a liquidation of the business assets.
Even wildly successful business owners, like the Cathy family of Chick-fil-A, worry about governance and succession, as well as maintaining the values and integrity of the founder. The Cathys, for example, study other families, like the McIlhennys, who have owned and operated Tabasco in Louisiana since the 1860s.
While each family business is unique, they all face similar challenges. Karsten Solheim’s sons assumed control of Ping upon the founder’s passing, but as the family tree expands, so does the number of Solheims the company supports. Philosophy and growth strategies that remain true to Karsten’s engineering background and devout faith are also concerns.
Nobody knows those challenges better than Katherine Jemsek, president of Jemsek Golf and the granddaughter of Joe Jemsek, who bought Cog Hill in 1951 and became one of the most successful golf operators in the country. Katherine was the least likely third-generation Jemsek to assume the reigns of the business. Her sister, Marla, was a terrific amateur player who won multiple Florida Women’s Amateur titles and played in the Curtis Cup with Cristie Kerr among others.
“I played golf in high school, but stopped after the state finals my senior year,” Jemsek said. “(Through college) I only played on Father’s Day because it was the cheapest gift I could give Dad and the only one he really wanted.”
Jemsek’s brother, Joe, is a golf course architect and Marla spent some time as the women’s golf coach at Rollins College in Winter Park, Florida. But it was Katherine Jemsek who showed an aptitude for the business.
“I don’t think my parents ever expected me to be in the golf industry,” she said. “When I first came in, some people thought I only got the job because I was Frank’s daughter. I think it takes extra time being a family member. First you have to gain (employee and customer) confidence that you’ve earned the job not because of your last name.
“But I’m also the only one (in the family) who sees (the game) from a casual golfer’s perspective,” she said. “For me, golf is about going out and having fun. I also understand why people leave the game. I understand why it’s not fun. I understand that it’s time-consuming, whereas people who are golf fanatics might not get that.”
Jemsek also understands the perils of being a third-generation operator.
“I think my father and grandfather have set high expectations for our organization and for our philosophy,” she said. “It can be a challenge to keep expanding upon that. It can be a little scary at times.”
Cupit understands that scary side of keeping a family legacy and business alive. “We were pretty battle-hardened by the time my dad passed away,” he said. “But we knew we had to change. We looked at the Atlanta market and felt that if we had gone through a traditional renovation we would have had an initial (membership) pop in 2007 but during the recession of 2008, we would have died on the vine. So, my mom and I made the decision to create something unique. It was before a lot of people had heard of the minimalist movement with native grasses, old-world bunkering and greens that have severe undulations. We wanted to be a course that didn’t look like anything else in Atlanta. And that’s now what we have.”
The move required the kind of trust that is hard to find outside of family. “My mother put a lot of faith in me and in our superintendent and the architect we hired,” Cupit said.
Then he paused for a long moment. “We were blessed,” he finally said. “At times it didn’t seem like it. But we were truly blessed.”
Steve Eubanks is an Atlanta-based freelance writer and New York Times bestselling author.