Thinking Through High-End Pickleball

The Quick Points

📺 AXS kicks off with ATL. The network within Anthem Sports & Entertainment, AXS TV, announced that it signed a deal with Major League Pickleball to cover all three of the season two events, starting with MLP Atlanta later this month. In addition, AXS becomes the official on-site music sponsor at the locations, which seems to fit with their general brand as a quick glance through their programming suggests they slate a decent amount of music-related documentaries and live shows. Pickleball seems to be a new venture into sports for them, as their current schedule is relatively limited with sports content outside of their parent company’s Fight Network (covering combat sports like MMA, boxing, and wrestling).

🔢 What’s your rating? One of the most common and thorny issues for pickleball clubs is deciding how player ratings should be done. It reminds us of the common trope that almost 80% of participants had evaluated themselves as being an above-average driver. Allowing members to self-rate is an easy short-term decision but you are just giving yourself and your community problems down the line. Fair and competitive play is what everyone wants most and letting humans round up or sandbag isn’t the way. The most common thing we observe is clubs deferring to a third party, and that popular third party is DUPR. No algorithm is perfect, but DUPR certainly has the leading brand, critical mass, and partnerships (individual clubs, PPA, MLP, LifeTime, etc.) of all the rating systems. CourtReserve just announced a technical integration (not everything is a partnership 😛 ) so that DUPR ratings are automatically synced. Facility admins can rely less on self-rating and easily organize teams, leagues, and open play by accurate player ratings. It’s a big win for hundreds of CourtReserve customers and tens of thousands of respective players.

🏆x100. The PPA Baird Wealth Management Open concluded this weekend, and Ben Johns earned his 100th career win. While Federico Staksrud kept him from taking another triple crown after an impressive singles match, he was still able to secure gold in men’s with his brother Collin, and gold in mixed with no other than Anna Leigh Waters.

What’s on our mind

💎 High-End Pickleball. Could go in Breaking Ground…but this one got us thinking…Rare to report something like this, but a new pickleball club is opening in East Austin (yes, Austin), called Other Racquet Social Club. The new location will offer three courts in a pretty secluded atmosphere. Each court will also have its own private cabana, and the facility will offer on-site amenities like a members’ clubhouse, lockers, showers, and a lounge with a self-service bar (interesting concept…). Also worth mentioning that “Founding Members” won’t have to pay the hourly court reservation fees. We haven’t had a chance to view the club or speak with the owners yet, so we don’t have a strong opinion on this specific facility itself yet, however, it’s a unique concept compared to what we’ve seen going up in Austin. First, there aren’t many locations being built from the ground up that are slated to open in the near term. Building from scratch affords tremendous creativity and flexibility in how you want to design the space to support the brand you’re trying to develop. However, it also comes with a massive set of headaches around zoning and permitting with the city, to more onerous construction management and budgeting. And as we penned back in early August, pickleball’s permitting problem doesn’t just limit player’s access to a highly sought-after piece of real estate, but it places tangible burdens on the operators of new facilities trying to get off the ground. So, props to them getting this rolling, and we’d love to know if there was something with respect to zoning / permitting of the land where the courts were built that allowed them to move quicker than usual.

With all that said, they’re in a unique position to be early to market with a ‘country club’-type offering. The pricing isn’t chump change, as they’re launching with a Founding Membership package of $1,000 initiation fee + $550/mo for the first 3 months (official membership pricing thereafter to be announced in November). The ability to offer private, members-only amenities and programming helps to draw a distinction in our view from the ‘public’ option, which is where we think some facilities fall short. Advanced reservations aren’t a compelling enough offering for many locations to incentivize membership, and it’s a relatively weak value prop’ It works well in highly court-constrained markets, but markets respond to producer surpluses and eat into each other’s margins by expanding supply, which drives down prices. One of your hedges against this is creating an unbelievably strong community, which is heavily influenced by high-quality programming and curating your membership. Another way to hedge this is to be first to create a new concept that has higher barriers to entry. Building an exclusive, high-end facility that has tangible benefits for members feels like a compelling opportunity to at least attempt to build something unique that can command higher prices and better retain members. Like anything, a lot will come down to execution and how high-quality these amenities are, but it’s at least starting from the position of offering something different to the market. So, while the pricing seems steep relative to some other experiences in Austin, they’re going for a premium product that can work in an affluent region if the quality of the amenities they purport to offer can be up to par. In some ways, they put themselves in this position to make a premium experience have to work, given they only have 3 courts. After talking to a few facilities in Florida, one takeaway we had is that it becomes materially harder to run efficient, large-scale programming while balancing the needs of members when you get down into the <5 court range. If you aren’t careful, you can quickly erode the experience of all parties if programmed courts are poorly run or don’t have the right activity for the size of the group, or if you’re a member paying $500+ a month and can’t even get court time during peak hours.

Lastly, we’re unsure if pickleball facilities can truly be the ‘Soho House’ of pickleball, as urban markets with many high-quality entertainment options (e.g. like an actual Soho House) present high opportunity costs for members to spend their time. In other words, would you go to something ‘like Soho House’ for the same price, if you could just go to an actual Soho House. We think that eatertainment like Chicken N Pickle’s core markets are in locations where there aren’t many competing high quality food & beverage / social / entertainment options nearby (e.g. 15-20 minutes outside San Antonio). With that said, having an exclusive club that builds the right atmosphere and community of members can definitely work and attract a loyal following which affords them pricing power in the relationship with members, and in some cases can lead to high demand from new people putting themselves on waitlists to get in - see: Kollective in Austin, TX; The Olympic Club in San Francisco, CA.

We’re excited to see how they really market and brand themselves, and if you’ve had a chance to play there, hit us up and let us know how it was.

🪠 The professional landscape is messy. Turns out MLP and PPA are reconsidering a merger. Yep. That’s all we know at the moment. A lot of speculation and rumors fill our group chats and phone calls so we will hold off on sharing a new perspective until a merger or all-out war becomes more official and isn’t based purely on speculation and hearsay.

💸 High net-worth matches. Pickleball is the ultimate social game. This is why it’s become the go-to format for networking and charitable events. It was interesting to see that the consulting group Family Office Associates hiring someone to own pickleball-specific event planning for their in-person events. Pickleball isn’t just a nice novel one-time event for companies and industry networks, it is becoming a platform for recurring programming.

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:
The Picklr is at it again, this time announcing plans to open six locations across Minneapolis-St. Paul over the next five years. They continue to be one of the more impressive facilities and facility operators scaling out across the country.

A new eatertainment concept, Pints & Paddle, opened the doors to its 41k sqft indoor complex in Maple Grove, MN. The facility hosts 10 indoor courts and 74 pour-your-own beverages + a restaurant. Players can drop in for $5 open play for 3 hours, as well as sign up for leagues and rent courts.

As we reported back in August, the new pop-up location, Pickle Pop, on the Third Street Promenade, finally opened. Looks fun and it’s in a great location.

Best of the Rest:

• Newton, IA is getting a new set of four pickleball courts in Aurora Park for an estimated $370k.