"You look at Bobby Jones and that brand is worth more now than when he was alive"

Thanks to reader John for this Robert Frank-Wall Street Journal story on Jack Nicklaus, uh, expanding the brand for $145 million and just a tiny part of his sou...stake in the empire...

The golf icon is selling a substantial minority stake in his company to New York real-estate mogul Howard Milstein to expand the Nicklaus empire around the world, extending its reach in golf course-designs, clothing, equipment and real-estate.

Under terms of the deal, expected to be announced today, Mr. Milstein will pay $145 million for the stake in the newly formed Nicklaus Cos. LLC -- which includes Mr. Nicklaus's business ventures, such as course design, licensing of his name, and golf clubs. Mr. Nicklaus will remain CEO and chairman, and the Nicklaus family will retain control.

Loved this... 

In the design group, which accounts for at least half of the company's profits, the company plans to step up the growth overseas, where demand for golf courses is skyrocketing. While there are 31,000 courses in the world, 19,000 of them are in the U.S, with most of the new demand coming from abroad, according to Mr. Milstein and Mr. Nicklaus.

Mr. Nicklaus has courses under way or planned in India, Korea, China, Russia, Ukraine, the Czech Republic, Greece, Croatia and Turkey. Mr. Nicklaus, who logged more than 600 hours on his Gulfstream jet last year, this summer will travel to Kazakhstan to plan a course.

"We're getting the lion's share of the work for golf courses getting built," he said.

Hey, at least he didn't say something like "we're getting the bear's share." Though he would have scored major brand enhancement points.

While most of Mr. Nicklaus's designs lack the high aesthetic reputation of courses created by likes of Tom Fazio, Tom Doak and the team of Ben Crenshaw and Bill Coore, they are well-regarded and Mr. Nicklaus is deeply involved in about half of those his company produces. Those are known as Jack Nicklaus Signature courses and carry a premium design fee, typically between $2.5 and $5 million. Work on the other Nicklaus golf courses is carried out by veteran designers at Jack Nicklaus Design.

When do you think the first grandchild will debut his own signature design?

The Nicklaus name on any course significantly increases its worth to developers, because it allows them to sell the accompanying real estate or resort properties at a higher price. Under the traditional business model, Mr. Nicklaus got only the design fee and in some cases also a small cut of the developments' profits.

Working with the Mr. Milstein, however, the company expects to finance and develop more of its own real-estate. "We can help the Nicklaus companies capture more of those opportunities," Mr. Milstein says.

Didn't try this one before already, with not such great results?

Twice Mr. Nicklaus has suffered serious setbacks. In the mid-1980s, his company, Golden Bear Golf Inc., overextended itself into areas such as oil and insurance, forcing Mr. Nicklaus to negotiate personal loans with banks to bail out the business. Then, in 1998, after Golden Bear went public, two executives were fired after the division they headed misrepresented more than $20 million in losses. The company had to restate its prior-year earnings, its market value sank and it went private again.

That answers that.

All four of Mr. Nicklaus's sons and his son-in-law work for his company. Mr. Nicklaus says his goal is to scale back his involvement in the courses, and build a company and brand that will outlast him.

"You look at Bobby Jones and that brand is worth more now than when he was alive," Mr. Nicklaus says.

You know I was going through my favorite Bobby Jones quotes the other day and stumbled on this one:

On the golf course, a man be the dogged victim of inexorable fate, be struck down by an appalling stroke of tragedy, become the hero of unbelievable melodrama, or the clown in a sidesplitting comedy--any of these with in a few hours, and all without having to bury a corpse or repair a tangled personality, but always at the risk of burnishing equity in his brand.