Pickleball and Its Impact on Lifetime Fitness

Overview of Pickleball Balls

• Franklin Balls: Known for consistency, but slower than desired.
• Faster Balls: Tend to be inconsistent with issues such as:
  • Inconsistent holes and patterns
  • Varying sizes
  • Lack of durability
• Goal: Create a ball that balances speed and consistency.

Growth of Pickleball

• Significant interest in pickleball from diverse age groups (young kids to older adults).
• Pickleball's potential to become an Olympic sport and a recognized high school/college sport.
• Accounts for 5-6% of total traffic to Lifetime clubs, translating to nearly 1 million visits a year.

Membership and Pricing

• Average Monthly Dues: $198, a 13% increase from the previous year.
• New sign-ups: Approximately 20,000 to 30,000 per month at $240/month.
• Pricing strategy aims to maintain customer experience; some clubs are on waitlists due to high demand.

Demographics and Sports Landscape

• Lifetime is a major provider of tennis, squash, and pickleball facilities.
• Notable conversion of traditional tennis players to pickleball enthusiasts.
• Celebrity endorsements and the rise of competitive leagues, e.g., players like Ben Johns.

Future Expansion Plans

• Company is generating substantial free cash flow and plans to continue expanding clubs.
• Real estate opportunities arising from competitors filing for bankruptcy and declining commercial real estate prices.
• Over 100 deals in the pipeline for the next 5-6 years.
• Construction costs are expected to decline in the following year.

Product Design Focus

• Ball Design Flaws: Issues with existing pickleball balls include:
  • Fewer and larger holes leading to inconsistency
  • Sharp edges on balls
• Engineered Solution: New design eliminates flaws for improved accuracy and performance.

Conclusion

• The discussion highlights the growing popularity of pickleball and its importance to Lifetime's business model.
• There is optimism about the sport's future, both in competitive settings and within the broader sports community.