Running Over to Pickleball

The Quick Points

🚨 All press is good press. The internet was quite spicy on Sunday over ESPN showing the PPA Seattle tournament. 11 million views and counting…

It didn’t take much effort to find dozens of non-anonymous people quote-tweeting this dink rally with comments like…

Even Barstool jumped into the conversation defending pickleball in only a way they could do. “You can certainly make the argument for or against the entertainment value of a specific sport. Some sports are always going to be more entertaining than others. But anybody who claims that pickleball isn't a sport just because it doesn't entertain them is a goddamn moron.”

Watching this tweet of the gold medal mixed match go viral was particularly funny because we were glued to the tv on Sunday thinking 1. this was a good competitive match with a lot of varied play and 2. the production value was quite high and polished.

The keyboard warriors are at it again. A lot of people are big mad as they make fun of other people having fun. Pickleball is easy to make fun of. The name pickleball does sound stupid. It was primarily played by your mom and dad. It does look like mini-tennis or big ping-pong.

But no one cares. 15-20 million people aren’t all in on a psyop. We don’t live in a zero-interest rate environment. The name has never stopped anyone from setting up another play session with their friends. The fact you can play with your parents is a feature, not a bug. You will be playing against your children in the future. You would think mini-tennis would be easier but the former 15th best tennis player in the world couldn’t get drafted in the second tier of Major League Pickleball. The guy who won Wimbledon Junior called pro pickle quits after winning three random matches and having no future in the sport.

All it takes is time. Those quote tweeters and retweeters just need one genuine session of pickleball to get it. You may not love it. But you certainly won’t be calling for folks to be sent to the gulag.

🤝 Collection Collabs. FILA and Devereux have partnered to produce a limited-edition pickleball apparel collection. The line will include both on-court and more casual off-court clothing for pickleball players. It’s yet another example of all the big athletic brands trying their hand at pickleball, but also speaks to the strategic angle some legacy sports companies with more traditional or out-of-style apparel are taking to revitalize the brand by partnering with a more youthful brand. We’ve heard of a few brands taking this approach now, by poaching talent from trendier fashion lines, with FILA being the latest to take a crack at it through a mutual partnership. Compare this approach to Stack (owned by one of the largest facilities, The Picklr), which is one of the few on-court/off-court pickleball athletic apparel lines built from the court (ground) up, that is placing their products into the pro-shops and e-commerce pages of one of the largest facilities across the country. What’s unclear to us that we’d like to better understand is how impactful these attempts to revitalize an image are to a retailer’s core product line, as the introduction of pickleball-specific clothing on its own is unlikely to materially contribute to FILA’s sales. Or said another way, to what degree are these strategies aimed at bringing in new customers, converting pickleball customers to general FILA customers, or sparking a new framing of FILA’s brand in the athletic apparel market (or likely a combination of the above).

🇮🇳 Makin’ moves in Mumbai. The APP continues its support of international leagues, with the latest partnership being inked with India’s 2023 Monsoon Pickleball Championship. The tournament offers prize money up to $20k USD for winners and will be held at a sizeable facility boasting 17 courts (including 2 center courts and 1 VIP exhibition court showcasing famous Bollywood superstars) at the NESCO Center in Mumbai. They expect to see over 600 players compete. We hope to see the pro organizations make grassroots efforts to grow the game at the amateur level post-pro tournaments, as we believe the same fundamental drivers of the sport in the U.S. will have legs internationally. Further, these efforts will continue to help drive recognition and adoption as the sport makes a push for Olympic inclusion.

What’s on our mind

👟 Runnin’ on over. We came across some interesting coverage of running retailers leaning into pickleball in the past few years. This is interesting to us, because it doesn’t simply highlight a big-name brand with an existing supply chain allocating a small fraction of that to capture a slice of a growing sport (e.g. Nike, FILA, K-Swiss, Wilson, Walmart etc.). These are hyper-localized owner-operated retail outfits that are making big decisions when deciding which new sports line to get into. In many cases, some of these operators may have only recently started playing pickleball recreationally and aren’t deep in the space, so therefore, they’re taking a material financial risk for their business to hold new inventory and build a sales motion to sell an entirely new product to a potentially different demographic than what they’ve known over the years (i.e. Running). It seems easy to overlook these risks they’re taking in retrospect given the sucess some retailers have had capturing the explosive growth of the sport. However, had those business decisions gone south for them, then it would be seen as an ‘obvious’ blunder chasing the ‘new fad’ that they didn’t have any business being in (no pun intended).

To highlight some of these operators and their perspectives:

Retailer in Fort Walton Beach, FL

• Previously an exclusive provider of running shoes.

• Pandemic caused them to test out pickleball shoes after the owner recreationally fell in love with the sport.

• Few brick & mortar outfits existed for pickleball, so offering an in-store experience for customers to try on shoes, see the aesthetics firsthand, and speak with a store rep about the tradeoffs of different products resonated with consumers.

• Store eventually built a pickleball court attached to the store; Increased both runner and pickleball customer foot-traffic.

• Unexpectedly became a unique way to engage the existing running community as many would stay and play rather than go on group runs.

• Social nature brought more runners together to become friends and spend more time in the store; The more hours in the store led to higher conversion rates, as well as customers buying both running and pickleball shoes, increasing their average order sizes & volumes.

Running shoe franchise in Rochester and Buffalo, NY:

• Owner of a running store identified a huge overlap between his running customers also playing pickleball.

• Started cross-selling both pickleball and running shoes.

Methuen, Massachusetts based running store:

• Owner believes that a store must train its staff to be knowledgeable about pickleball and how to sell the performance apparel + represent it well.

• Thinks that running shoe stores are uniquely suited to this, because their sales reps have deep experience selling the intricacies of running shoes to highly motivated users (high-performance runners).

• Sees material business risk for running stores to make the switch as they need to hold a lot of inventory; Creates the imperative to know how to sell it.

• Pickleball has grown to be the company’s #2 category, only behind running (which was the store’s original focus).

The Running Event Tradeshow:

• Running stores started leaning into pickleball in early 2023.

• 54% of their attendees noted that they currently carry or plan to carry pickleball products.

• K-Swiss is now sponsoring a pickleball court to showcase their latest pickleball shoes.

• K-Swiss’s VP of global marketing, Dave Larson, feels that running stores are one of the dominant channels to bring pickleball shoes to the front of consumers’ attention, due to the demographic crossover and relative knowledge of running store staff members to explain the value prop to consumers (similar to the Methuen based store’s comments).

The comments from the last two groups struck an interesting note with us, as there’s some conceptual overlap to recent discussions and writings we’ve done with respect to court facilities. It often feels that the prevailing investment pitch is that the massive undersupply of courts creates “build it and they will come” conditions, making most facilities appear to be attractive opportunities. In the early innings when players are starved for any courts to alleviate their 2hr wait times there may be truth to this, but retaining those players as a market gets saturated with additional private & public courts will largely come down to proper programming and community. This will be some facilities’ competitive edge that hedges their risk of simply becoming “courts in a box” that would otherwise experience a traditional commodity cycle of undersupply —> high prices & profits —> oversupply —> race to the bottom in prices & profits. So it’s incumbent on facility owners to provide that differentiation that can only be done if you know how to sell your facility’s offering. Similarly, these retail operators taking on the working capital pressures of expanding their inventory to tackle an unknown market will need to do more than throw some shoes in a box (literally) and put them on a shelf. Like the operators above noted and similar to the facility owners, retail outfits will need to focus on their own type of programming, since knowing how to sell these items is equally important as simply having these items.

😎 Playing performance. Ace Pickleball is a soon-to-be nationwide franchisor of pickleball clubs. They have at least 30 stated commitments from franchisees in several larger markets. Their first location has just opened to the public in the northern suburbs of Atlanta. It was interesting to see the operating team do a good job responding to early and clear feedback about some challenging playing elements. This does indicate to us that the management teams may not be as pickle-native as we would expect but as with all new ventures in unique physical spaces there will always be room for rapid iteration. Hats off to anyone building the muscle to ask for feedback and acting on it.

Breaking Ground

The Reset tracks publicly available court construction data to better understand the locations, costs, and development priorities going into projects across the nation. Our tracker can be found here.

Featured Developments:
Getting creative. The Third Street Promenade in Santa Monica is one of the hottest destinations for tourists and locals alike to visit for its restaurants, shopping, and proximity to other LA hotspots. The only thing it needs is a pickleball facility, and that’s what former pro soccer player Stephanie McCaffrey and fashion designer Erin Robertson are planning to bring to a 10,000 sqft former Adidas store. The location will provide a bar and social area, which helps fit with the scene and demographic in the immediate surrounding Promenade. Like many other parts of the country, Santa Monica has very limited court availability relative to its high-density population and pickleball crowd. They plan to move quickly and have the courts up and running by the end of this month, with plans to run the facility for 6 months or more, as well as expand to other vacant stores around LA county like Calabasas, Palos Verdes, Holywood, Glendale, and Manhattan Beach. In order to better time the hype with the launch, the two founders first secured the facility’s alcohol permit before moving ahead with the construction. The average cost for court time will be ~$20 per hr per player, with memberships of $95/mo which provides discounts on court rentals, programming, and other events.

Poppin popups. The growing trend of pop-up pickleball courts continues, capitalizing on undersupplied locations to meet demand. These pop-up courts also allow the landlords to utilize unused space, without having to commit to a full buildout or long-term lease. Big City Pickle’s temporary location in Chicago is opening in Fulton Market for at least 12 months, with the hope to have a longer-term offering. The facility is opening with 9 courts but plans to open 40 by spring. The location will eventually offer food & liquor, and is currently a pay-to-play system hourly + open play.

We love seeing local officials recognize the benefits of pickleball to their community and take an active role in bringing courts to their neighborhoods. The latest support comes from the Michigan Economic Development Corporation (MEDC), a public-private partnership agency designed to bring jobs to the state and beneficial projects to residents. If they reach their fundraising targets of ~$100k, they’re planning to build 8 public courts at the John and Melissa Besse Sports Park in Gladstone, MI.

Caldwell Communities near Houston is building a $20M waterpark which will also attract guests with its tennis courts and new pickleball courts. One interesting point of note is that the project is being developed by Caldwell Communities, which as we’ve covered in the past, is the developer including pickleball courts into another community development nearby in Porter. The pickleball pitch is clearly resonating with them and the bet they’re making to attract foot traffic into their waterpark and residential homes.

Best of the Rest:

• George Mason University opened 8 courts for members of their Rec center and GMU students. We’d love to see this as the early stepping stone to get the sport recognized at the collegiate level. As scholarship opportunities emerge, we believe the market for pickleball infrastructure such as coaching, youth sponsorships, and clinics will see a step function in growth.

• Chelan County in WA is undergoing a restoration and conversion process of six parks, converting the existing tennis courts into a total of 7 pickleball courts. The project will also resurface the tennis courts and provide other fixtures for the park, and is expected to cost ~$346k.

• Memorial Park in Boone, IA replaced existing tennis courts with six new permanent public pickleball courts after a multi-year push and fundraising by community residents.

• Speaking of Michigan, the city of Adrian, MI unveiled its 6 newly constructed courts at Heritage Park this past Saturday. The project cost ~$185k, coming in over the original budget of ~$118k.

• Lions Park in Cheyenne, WY opened 8 new pickleball courts after the city’s rec & events director said “[their] offices received the most requests for additional pickleball courts than any other request”. The courts cost $552k.

• The Pickleball Hub in St. Albert, Canada is expanding to a second facility in Edmonton, Canada after seeing extremely high demand for its 5 indoor courts.