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Unstable Building?

Spiraling costs mean that suppliers, contractors and clients can expect to feel the pinch.

By Mary Helen Sprecher

There are bull markets. There are bear markets. Then there’s the tennis market, which is a different animal entirely. It would be easy (and logical) to assume that a tough economy has a domino effect, knocking down club memberships and participation in camps, leagues and public recreation and parks programming, and in turn leading to a decrease in tennis court contractors’ businesses, and to decreased sales of materials.

But the equation isn’t necessarily working that way. Certainly, the economy has caused a plethora of problems. Skyrocketing costs for all things oil-based (fuel, asphalt and rubber, three key components in the tennis-court construction and supply industry) and metal-based (fencing, net posts, cabling, etc.) have led to an unpredictable and perilous season for contractors and suppliers. In many cases, it has caused even longtime members of the industry to use guesswork in pricing out jobs.

“Asphalt, chain link fence and acrylic coating prices have been rising at unusual rates all year,” says Lee Murray of Competition Athletic Surfaces Inc. in Chattanooga, Tenn. “This poses a problem for us when quoting prices to potential customers. For customers who are planning work to be done in 2009 or 2010, we are forced to anticipate rising prices and quote high numbers.”

But the things that might be directly affecting other industries — loss of jobs, budget cutbacks and general uncertainty — haven’t as yet been much of a factor for those building tennis courts, thanks in part to the nature of the industry. Because many large jobs, such as those involving tennis courts belonging to municipalities, come out of capital funding, and because that funding is already in place, the court construction industry has been generally slow to respond to the economic climate.

All this, of course, could change dramatically. As financial houses have fallen on Wall Street and credit is uncertain at best, spending for tennis courts may well take a hit.

“In my 30-plus years in the business, we have always lagged behind other industries in feeling the effects of a slowdown,” says John Welborn of Charlottesville, Va.-based Lee Tennis, which makes the Har-Tru surface. “The long sales and planning cycle of new construction account for some of this, and based on history, we are just now feeling what others felt several months back.”

“The recent Wall Street and credit crises have not yet been as evident this year as we’d initially feared, as most projects were scheduled months or years in advance,” says Tom Magner, Eastern regional manager for DecoTurf. “But most contractors I speak with are very concerned about the next couple of seasons and where we are headed as an industry.”

Court Activity

In fact, if anything, at least some types of clients seem immune to the recession, according to George Todd Jr., whose company, Welch Tennis Courts in Sun City, Fla., has not seen a downturn in projects for municipalities and clubs.

“Sometimes in a down economy, people stay close to home and actually spend more at their home club which can, at least in the short term, make the club economy counter-cyclical,” says Todd.

It’s a point of agreement among club officials. Both Robert Fisher, director of tennis at Germantown Cricket Club in Philadelphia, and Fernando Velasco, general manager and director of tennis at Circle C Tennis Club in Austin, Texas, say members are coming in, rather than dropping out. The sport’s return to popularity and its continued growth has led to a need to maintain and improve existing tennis facilities.

“In our business, when you want your clientele to stick around, you make sure they have good courts. The greatest commitments we have are to the courts themselves, and to keeping the staff available and attentive,” says Fisher. “If the courts and staff aren’t up to par, then we’re not going to have the success we desire.”

“Folks are staying closer to home, that much we know,” says Virgil Christian, director of community tennis development at the USTA. “What I hear from tennis providers I have spoken with is their camp and lesson business is strong. It will be a while until we have the data on this, but my assessment is families are keeping it simple and that includes participating in activities nearby. USTA membership is at an all-time high, which tells me players are playing in leagues and probably enjoying their tennis facilities and clubs.”

For Monica Christiansen, the superintendent of recreational facilities in the Newport News, Va., Department of Parks, Recreation and Tourism, the economy has been a factor, but has not impacted the tennis courts themselves.

“In our city, as far as resurfacing goes, those projects are part of our capital improvements, and we haven’t seen any changes yet,” says Christiansen. “What we have put in place this year are changes to our operational hours and our staffing.

“We’ve scaled back — we’ve looked at what programming we have in place and how it can be changed,” she continues. “For example, we used to be open 3 to 10 p.m. at our main tennis facility for our classes and leagues. Now, we’re open 4 to 9 p.m. Where we typically would have two instructors, we now have one person staffing the building.”

Avoiding Trickle-Down

Some aspects of the industry, however, are feeling the pinch. Suppliers of materials are hurting, courtesy of those rising costs, and many are reluctant to pass on the problems, particularly to longtime clients.

“Every raw material we use in our formulas to manufacture acrylic tennis coatings has increased in price over the last six months,” says Bill Righter of Nova Sports, USA in Milford, Mass. “Many ingredients have increased in price on a monthly basis. We have never seen anything like this before. Shipping costs have also increased substantially. We realize that many of our customers’ current work is from jobs they priced out many months ago. It would not be fair to our customers to keep raising our prices, so we have absorbed a lot of the increases.”

“I think some of the major suppliers are trying to work with us by doing things like allowing us to order in advance and taking purchase orders in advance so that we can take advantage of current pricing,” says David R. Nielsen of Leslie Coatings in Indianapolis. “In some cases, we’ve had to order full truckloads of material early. Cash really does become an issue and fuel has been crazy, as everyone knows. We knew prices were going to get higher last fall, but on things like latex, the increases have been really, really severe. All we can do is put our heads down and go forward.”

“I think it’s going to become the norm for sport-court builders to insert ‘cost escalation’ clauses in their contracts, so they don’t end up losing money on bids won months earlier,” adds Deco’s Magner.

Builders and suppliers have become adaptive, not only to changing economic times, but to the sensitivities of their clients.

“We continue to recycle many raw materials for some of our products to provide green systems and to keep our costs in check,” says Rick Burke of NGI Sports in Chattanooga, Tenn. “As many of our surfaces are replacement demolition, and for asphalt paving we consume less energy and oil-based materials, so we are seeing an increase in business during this time.”

The Fix is In

Inevitably, there are going to be some markets, say builders, in which customers want to save money by employing stopgap fixes. It might be a residential court where a nervous homeowner is trying some belt-tightening, a club anticipating an off-season or a municipality that hasn’t budgeted for major tennis court work. In those cases, repairing cracks on a court might appeal more.

Ellen Brattlof of Armor Crack Repair System in Farmingdale, N.J., has seen explosive growth of requests for her company’s product over the past year, and she says she expects that growth to continue.

“Faced with crack repair or ripping out a court, people prefer to repair cracks,” says Brattlof. “It does save money, but there’s a breaking point, generally about 500 feet of crack per court. Not every court is eligible, but a majority of them are.”

But if there’s one thing that is certain, says Randy Futty of Lee Tennis, it’s this: Uncertain times don’t last forever. Even for tennis court builders and suppliers.

“We may be late going into the economic downturn and late coming into the economic recovery,” says Futty. “The last two to three years have been a downturn, with the end of 2006 being the time the downturn really started. So now we’re in year two. By 2010, I’m hoping it starts to loosen up, maybe by the middle of 2010. Then we should have a nice five- to seven-year recovery run.

“Really, from 1998 to 2006, we had an unprecedented bull of a market. When you have such a run-up, you’re due for a correction. This is a correction. And eventually, a nice sustained good period would be nice.”

Memo to Builders: Discourage ‘Do-It-Yourselfers’

What you don’t want: Penny-wise and pound-foolish measures like a residential court owner who uses a tube of driveway crack-filler on his home court — then finds it can ruin the surface. How to encourage professional repairs?

Convince clients of the skill necessary: “Tennis courts are such a specialized business that most people have little experience,” says David Marsden of Boston Tennis Court Construction, Hanover, Mass.

Convince them to act quickly: “Owners should understand that they are preserving, protecting, and maintaining a capital asset; much like roof repair — putting off timely court resurfacing and maintenance is very short-sighted,” says George Todd Jr. of Welch Tennis Courts.

Convince park and rec departments to use grants or special funding for repairs, rather than to go with an unskilled employee: “In some cases, work is done by other divisions of the city, and they don’t necessarily do the best job; it’s just not skilled labor,” says Tim Almaguer of Friends of Patterson Park, a municipal facility in Baltimore, Md., which is trying to build on its current tennis program. “We’ll go straight to a vetted contractor before we’ll call in someone from the city.”

See all articles by Mary Helen Sprecher

About the Author

Mary Helen Sprecher  is the managing editor of Sports Destinations Management Magazine, a niche business-to-business publication for planners of sports travel events, in addition to being an RSI Contributing Editor. She is the technical writer for the American Sports Builders Association and works as a newspaper reporter in Baltimore City.

From the November 2008 issue
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