There are really good balls and Franklin
makes a great ball. It's consistent.
It's just a little slower. So the higher end player wants a faster
ball and the faster balls have flaws with their consistency.
So the holes are inconsistent, the pattern is inconsistent, the size is not
right. So they play very inconsistent.
It frustrates you when you expect the ball to bounce a certain way and bounce
is different. They also lack durability.
So what we did is we tried to create a ball that gives you the speed that
everybody wants, but also has the consistency that the players would seek.
All right. We have a couple of the balls here right
now. You say you brought some.
So this is the actual ball, Eric, if you want to get the close up shot on this.
How important is pickleball to the growth of lifetime?
We have a club by me in Westchester and everybody I know who's joined goes there
because of the pickleball courts and and the round robins that you organize.
Yeah. You know, when I used to play tennis and
once I got dropped into playing Pickle about three years ago, it was
immediately obvious that this is the sport that is going to be played by all
people. And we see it today.
We have young kids are playing very old, people are playing, and everybody in
between. I believe it will become an Olympic
sport. I believe it become, you know, high
school, college sport. It should It's the fastest growing.
It's very accessible by all. But do you have can you quantify how
important it is to your growth? Yeah, you know, we've had about five or
6% of our total traffic. You know, we have about 112 right now
growing nearly a million visits a year. About five or 6% of those visits right
now are purely just because of pickleball.
So it's been significant as part of our comeback and rewiring the business.
It's been amazing. That's pretty wild.
And I mean, it is a much more accessible sport.
To your point, I mean, the only time I've played pickleball, it's been with
my parents. I don't think I would play tennis with
them necessarily. But I do want to talk about the the
monthly dues of your clubs because like you mentioned, of course, you have a
growing audience of membership. I was looking through your earnings
call. So your average monthly dues, $198,
that's up approximately 13% from the second quarter of last year.
Where are you on pricing right now? Do you think that you're going to break
200 or. What's the plan there?
Actually, the people who are signing up about 20 to 30000 people a month that
sign up every month, they're signing up about 232 for $240 a month.
And we have no salespeople, no promotions, because this is just purely
desirability of the product and the customers coming in.
We price the clubs to manage the experience of the customer.
So when the clubs are started getting a little bit pinch, like if you go and
we'll be right now, we don't have room to get more people in Westchester.
So Westchester, as many as about 50 other clubs are on a waitlist right now.
And so it's really a function of adjusting the price to maximize the
experience for our customer. You know, it's interesting when you
think about racquet sports, you have Andre Agassi today.
I am one of those people that plays tennis and not that I'm a snob or not,
not big a snob. There are a lot of racket sports out
there. So what demographic are you really going
for out here? Are there people who are converting from
tennis? You know, Padel is also getting a lot of
steam in New York is really interesting. LT has been the largest provider of
tennis by a magnitude of two or three times.
And we're still building more tennis facilities and nobody else really is.
And it's not just tennis is also we're the largest provider of squash and the
largest provider of pickleball, but magnums are probably about ten.
So the company is growing at about a million square feet a year and that's
just indoor and there's outdoor square fees on top of that.
Therefore, there we're we're addressing all those sports.
But yesterday I was in the club playing pickleball and this gentleman who has
been with a member with me for more than 30 years with his family, his kids were
there with their little bambino, but the whole family was playing pickleball.
And this all of these people used to be tennis players.
That's the draw. That's the draw.
My parents played tennis, but they're getting a little old.
Yeah. Now.
And when we go to, you know, the club, we'll play pickleball instead because we
can all play it together. I also like to play competitively,
though, with, you know, people more my age.
You have not just Agassi, but Ben Johns. I own his racket, right?
There are celebrity pickleball players now and obviously leagues that are
growing. You say you think this could become an
Olympic Olympic sport. Are you surprised by the growth?
Absolutely not. Like I said, as soon as I played, it was
obvious because the range of the sport and I personally love to play the
singles game, it's literally as exciting as a singles pickleball singles.
It sets a. It's as exciting as playing a singles
tennis match. And you will see in in the next 510
years. The singles Pickleball Pickleball
matches will be as exciting as the single tennis matches in the world.
All right. There you go.
Something to look forward to there, and it'll be interesting to see if it is
added to the Olympics if breakdancing may
flag football. So there you have it.
I do want to talk about what this means for expansion plans for lifetime.
Of course, you achieve being cash flow positive.
Part of the reason why you're there is because you decelerated the pace of club
expansions. When you think about, though, this
quickly growing segment, do you plan to reaccelerate, accelerate opening new
club locations? We are right now the company is now
generating substantial free cash flow after maintenance CapEx and interest
payments. We are very, very close to attaining a
double credit and that will also lower our interest increased cash flow for the
company from here going forward on an ongoing basis is more than sufficient to
pay to pay for all the additional growth that we have and we will continue to
grow the company in a double digit top line.
Bottom line. I don't see any reason that why we can't
do that. What's the cost of acquisition here?
When you were talking about your expansion plans, all I was thinking was,
my God, that's a lot of real estate. And are you finding discounts now that
you're seeing some competitors even file for bankruptcy?
You're right, Exactly. You're seeing competitors file for
bankruptcy and you're also seeing commercial real estate prices really
starting to plunge. Do you see an opportunity?
Yeah, there's absolute opportunity in real estate at all times.
Real estate sort of moves in different buckets.
You know, some some part of the real estate is hot, just like a stock market.
And some parts are called Lifetime with the lifetime living business model.
And then our transformation of the malls, we bring in more traffic and high
quality people than almost any anchor, and we can transform the fundamental
results of a residential building. So all of those things are providing
additional opportunities for growth. We have multiple growth opportunities.
So it's really we have the pipeline for the next five, six years.
It's at least 100 deals in the pipeline right now.
So we really are not seeing any and construction costs are starting to take
me down. I think next year would be better than
this year. So, yes, all things are working in the
right direction. You talk to us just quickly, we have 30
seconds about why this is a better pickleball.
You are an engineer. You studied engineering University of
Colorado, right? Yeah.
Why is this better than, you know, a Franklin or whatever other ball that we
play with today? So the pickleball is generally have few
you know, all the rest of them have fewer fewer number of holes and then the
holes are much bigger and those bigger holes will create insufficient accuracy
for the ball to bounce off the ground. I don't want to get you said you have 30
seconds, so that's about it. And then they have sharp edges.
There are basically some obvious flaws in the design of those clubs.
We just eliminate all the flaws.