The Sale of the Century : How the deal was done: After a decade of Japanese ownership, Pebble Beach is back in American hands-this time for good

Golf Digest, June, 2000 by Mark Seal

The $820 million had been raised: 132 limited investors, including the four partners, contributed $400 million, leaving $75 million of subordinated debt, with the balance of $345 million to be picked up by the GE Pension Fund with Bank of America as the lead bank. What do investors get for their cash? Certainly not anything resembling a membership nor preferential tee times nor even discounted hotel room rates. They can call a special investor's concierge, Lee Ann Seber, an 11-year Pebble Beach employee, who's already heard from 60 percent of the investors. "For the most part, it's golf and rooms," she says. "It could be spa packages. I've done restaurant reservations and found manicurists for somebody's wedding. . . . I work with them on tee times. We never guarantee anything, but we try to work it out."

For their $2 million minimum, investors share the pride of knowing that Pebble Beach will stay in American hands. And there is also the most American of reasons, the hope that someday the investment will turn a profit. "Nobody's in it to throw money away," says Eastwood. "But they're not in it for a quick deal, for some IPO that's gonna go jumping off the charts. A lot of people who've owned it before would sell it on a turn. We're not looking to fix it up and sell it. We're looking to fix it up and be here."

This is the challenge, says Eastwood: "To fix it without killing it with improvements. There are always things that could be done. It's nice, but we'd like it to be the nicest it could be."

Ueberroth, of course, is the ultimate Mr. Fix-It. Just as he transformed both the Olympics and Major League Baseball from mere games into flag-waving, ad-incessant Network Special Spectaculars-some contend to the point of overcommercialization-he is certainly capable of taking Pebble Beach to the masses. "In the game of golf, Pebble Beach is probably the No. 1 brand in the world," says Ueberroth. "Can you extend that brand? The answer is, yes."

The new owners will undoubtedly venture into the sticky thicket of development, specifically the Del Monte Forest Plan, which has been awaiting approval since 1992, with opposition coming from the environmental community, regulatory bodies and Pebble Beach residents. The plan would add 318 new housing sites throughout the Forest (necessitating the removal of 30,000 Monterey pines), a fifth golf course that's already been routed by Tom Fazio and a proposed new equestrian center. The owners are also seeking to exploit the less-controversial non-land aspects of Pebble Beach. "The first thing is to preserve and polish it and make sure we understand it," says Ueberroth. "The area is underserved in golf, and one more public course in the Forest would be terrific."

"We're looking at sponsorship, looking at licensing, looking at e-commerce, looking at retail, other resort opportunities," says Bill Perocchi. "Those are all things that we're looking at, that we feel we could leverage the business."

The sale was finalized in a week of 7 a.m.-to-midnight sessions in the Lodge's Fairway One villa, as Ueberroth, Ferris, Perocchi and Co. sat on one side of the table, Jiromaru and his associates on the other, their Japanese bosses monitoring by phone and fax. When the details were satisfied, a contract, several inches thick, was prepared and signed. The actual closing occurred in an L.A. law office on July 30 last year, and the $820 million flowed in from all those disparate sources and sprayed out with equal ferocity to help quell the red ink in Japan.