Timberlake sells golf course for $15.5 M loss(merged)

[cxx]

Here:

http://sports.yahoo.com/blogs/golf-devil-ball-golf/justin-timberlake-sold-tenn--golf-course-for--15-million-loss-212640035.html

 

I don't think this is the end of golf. This kind of thing happens all the time, where someone with a dream buys a failing golf course, invests a bunch of money, and eventually has to bail out moving the property to the new dreamer. Sold for 500k. Timberlake's dream was a bit on the grandiose side.

[Togatown22]

$500k seems REALLY cheap after all of the reno he did. I wonder what the membership situation is. Looks like a nice place from the website, the rates compare favorably to a nice daily fee course in the Northeast, but I don't have any frame of reference for that part of the country. Has anyone played there and/or have more detail?

[CrabDaddy]

Wonder what the details are. I'm assuming he couldn't generate membership, but was it cost, location, competition, etc...?

$16 mil to $500K!!! Wow! Makes me feel a little better about my investment in Enron... and Allaire... and JDS Uniphase... and WorldCom... hmmm, at least he got to play a nice golf course.

[jewofgolf]

I played it. It's public and it's one of my favorutes ever. I drove down in the winter from illinois. Truly I hope it stays pristine...absolutely perfect greens and a gorgeous layout.

[mosesgolf]

$500K? Wow that course must be bleeding cash and was basically purchased for property value only.

[lumberman2462]

I can't believe that is all the real estate would be worth.

[pmo09]

Looking at the website, membership cost is $1,500 a year MAX. Wow, that's ridiculously cheap. Up here decent memberships start around $3,000 - and that's for 6 months of golf...

[irvtrain]

The article states they only looked at the price consideration on the deed. I'm assuming there was quite a bit of other consideration, a trade perhaps included in the deal? Anyway, I think Timberlake will have quite a bit of carry forward loss for the next couple of years or he may even write it all of this year. Who knows. Would love to see the contract.

[dudewheresmypar]

The guy is worth like 200 mil, he'll get over it. Still a spectacular loss of course.

[KILLEDBYASHANKEDWEDGE]

Beautiful course, the club house is worth 500K.

[PZero]

There must be more to it. The land alone would be worth much more than that.

[stasek]

Golf course -$500k...
Golf equipment... $15.5m...
Being able to own a golf course - priceless!

[SoCalTitleist]

[quote name='PZero' timestamp='1415470206' post='10416171']
There must be more to it. The land alone would be worth much more than that.
[/quote]
This ^

[DixieMafia]

[quote name='PZero' timestamp='1415470206' post='10416171']
There must be more to it. The land alone would be worth much more than that.
[/quote]


Not so sure…have you ever been there? Its in the hood.. You only hope your not the last tee time on the sheet and finish after dark.

[somaplr]

He didn't lose 15.5M

[ilikegolf26]

So he poured $15 million into this place to make it more "Eco-friendly." I think there's a lesson to be learnt here....

[rbhan12]

[quote name='ilikegolf26' timestamp='1415483863' post='10416889']
So he poured $15 million into this place to make it more "Eco-friendly." I think there's a lesson to be learnt here....
[/quote]

What's the lesson? I'm very interested in learning.

I have trouble believing that someone as successful as JT (with a small battalion of lawyers, advisors, what have you) would take a $15M loss. $500k must have just been the cash, there must have been some other assets exchanged.

[ilikegolf26]

[quote name='rbhan12' timestamp='1415489676' post='10417325']
[quote name='ilikegolf26' timestamp='1415483863' post='10416889']
So he poured $15 million into this place to make it more "Eco-friendly." I think there's a lesson to be learnt here....
[/quote]

What's the lesson? I'm very interested in learning.

I have trouble believing that someone as successful as JT (with a small battalion of lawyers, advisors, what have you) would take a $15M loss. $500k must have just been the cash, there must have been some other assets exchanged.
[/quote]


The lesson? Don't take advice from environmental wackjobs and pour $15 million into making a worthless piece of land an "eco friendly" golf course.

[DavePelz4]

Theoretically, that's a $15M tax loss, which has benefit. He also could have sold it to a group that he has a financial interest in. You can't look at the transaction on an isolated basis, the entire financial and ownership situation also needs to be considered.

[displayname]

[quote name='PZero' timestamp='1415470206' post='10416171']
There must be more to it. The land alone would be worth much more than that.
[/quote]

I think there is allot more to this story. I recall reading about the purchase when he first got the course years ago. Unless I'm mixing something up, I believe it was a course he played on as a kid, and it was struggling. He didn't want that to happen, so he decided to save it. Also, changing ownership doesn't have to mean no longer receiving proceeds and revenues. I also haven't heard anything about JT potentially having a standing relationship with the buyer. JT is pretty big on charity, big oh helping friends, and big on golf. I wouldn't be surprised if he was fully aware, willing, and planned on having that much out of pocket for a project that was close to his heart. I could be totally wrong, but like others have said, JT's "team" would have likely stopped the bleeding years ago if things were moving $15.5M in the wrong direction.

[Drudersh]

[quote name='DavePelz4' timestamp='1415493361' post='10417563']
Theoretically, that's a $15M tax loss, which has benefit. He also could have sold it to a group that he has a financial interest in. You can't look at the transaction on an isolated basis, the entire financial and ownership situation also needs to be considered.
[/quote]

This. Not complicated.

[lumberman2462]

Maybe he got a tax credit for all of the Eco-Friendly #£+% that he did?

Something does seem off though.

[cdnrockies]

[quote name='Drudersh' timestamp='1415495083' post='10417689']
[quote name='DavePelz4' timestamp='1415493361' post='10417563']
Theoretically, that's a $15M tax loss, which has benefit. He also could have sold it to a group that he has a financial interest in. You can't look at the transaction on an isolated basis, the entire financial and ownership situation also needs to be considered.
[/quote]

This. Not complicated.
[/quote]

Agreed. There is zero chance he took a $15.5M loss. Far more to the deal than what is on the surface.

[PZero]

[quote name='DixieMafia' timestamp='1415477962' post='10416543']
[quote name='PZero' timestamp='1415470206' post='10416171']
There must be more to it. The land alone would be worth much more than that.
[/quote]


Not so sure…have you ever been there? Its in the hood.. You only hope your not the last tee time on the sheet and finish after dark.
[/quote]

I saw that it was in Memphis, so....

[Parker0065]

He may not have lost 15 Mil,,,,but he obviosly didn't make 15 Mil off the deal either so I'm sure he's looking it as a failure regardless!


It's a tough business that you have to put your heart and soul into and with JT I'm sure he likes and enjoy's golf a lot but was never going to abandon his career to run a golf course so I'm not surprised at all that this little "golf project" of his bit the dust and has come to an end!

[cxx]

Oh I don't know. I've seem much stranger things than someone putting a cause ahead of fiscal responsibility. Look at IBM's selling of their chip plants. They had to pay the buyer a truckload of money to take them, guarantee many years of orders and guarantee continued research in the area.

So Justin plowed 16M into eco friendly improvements. I doubt that it ever made financial sense.

A loss is a loss even though though it helps the tax situation. I would be curious to know more of the details. Might be a related party transaction, although most of those don't show up as 500K. They are usually recorded as the minimum amount allowed to avoid transfer taxes.

If anyone finds the deeds online, post a link, I'd like to see them.

[DavePelz4]

The deed...[url="http://register.shelby.tn.us/pdetail.php?year=2014&instnum=14111978&db=0"]http://register.shelby.tn.us/pdetail.php?year=2014&instnum=14111978&db=0[/url]

[ssfranny]

he needed a tax writeoff plain ans simple

[martinbns]

I suspect it's a real loss.

I was playing golf at a very nice course that may or may not be in Financial trouble with the Senior Partner from a large National Accounting firm that doesn't represent the club.

He has been involved in advising owners and prospective buyers a few times, his take, $7mm to build with $2mm equity, inside of 10 years bankrupt, second owner buys it out of receivership for $3mm with 1mm equity, 5-7 years bankrupt again third owner finally buys it for a low enough price that the business will cashflow when he buys it for $1mm with 50% equity.

A golf course without related real estate development is almost always a complete cash sucker. Can't be sold for anywhere near the value of the vacant land, maybe 10 cents on the dollar.

I love golf, but it's one of the worst business' in north america.

[cxx]

Hard to see the underside but looks more like an opportunistic purchase by the owners of an industrial company. The purchasers, Three Star Leasing and aircon and the Edmaistons are all closely related. Hard to see how they might be related to Timberlake, but you never know.