Pinehurst is a company town. Always has been. Tucked into the
sandhills of south-central North Carolina, this hamlet sprung
wholly formed from the imagination of James W. Tufts, the
ambitious son of a Boston blacksmith. By the time he was in his
early 20s, Tufts owned one of the first chains of pharmacies in
the country, and he conceived Pinehurst as a place where those
suffering from tuberculosis could recuperate in the glorious
sunshine and pine-scented air. Working from a blueprint by
Frederick Law Olmsted, the celebrated architect who had designed
New York City's Central Park, Tufts built the place in six
months in 1895. Believing that outdoor exercise was vital to
good health, he hired the Scotsman Donald Ross to build a golf
course for his guests, and in 1899 Pinehurst No. 1 was opened.
Ross officially became the head pro in 1900, and seven years
later he completed his masterwork, No. 2, the course that would
make Pinehurst famous. By 1923 the Pinehurst Resort was foremost
a golf destination, boasting four Ross courses and three
thriving inns, and it shaped the local economy to such a degree
that during the Depression, resort employees were paid in
script, redeemable only at the myriad businesses owned by the
For 75 years a Tufts gently guided Pinehurst--the resort and by
extension the village--until 1970, when James's three grandsons
sold out to real estate mogul Malcom McLean, a Philistine who
lined the courses with condos and tried to modernize the look of
Ross's work. Lacking the kind of patriarchal leadership that had
characterized its growth, the resort foundered, and in 1982 its
neglected golf courses and sagging hotels were turned over to a
consortium of eight banks. Two years later the resort was sold
to a wily entrepreneur, Robert H. Dedman Sr., and for a while it
seemed as though Pinehurst was witnessing the second coming of
Dedman, too, was an embodiment of the American Dream. He had
risen from the abject poverty of the Arkansas backwoods to a
snug position among golf's aristocracy. By 1984 his company,
ClubCorp of America, had quietly become a force in the industry.
Today ClubCorp owns and operates 234--and counting--private
clubs and resorts, and Dedman has been listed among the
wealthiest men in the world, with an estimated net worth of $1.2
billion, easily making him the richest person in golf. In
Pinehurst, Dedman saw not only a priceless business opportunity,
but also the chance to create his legacy. "The first time I
stood in front of the clubhouse and looked out on all those
ribbons of fairway, I got tears in my eyes," he says. "I had
always venerated Pinehurst for its place in the history of golf,
and when I finally saw it I knew instantly that we would take
this fallen angel and make it not as good as it was, but better
than it had ever been."
Fifteen years and $100 million later, Dedman, 73, has realized
not only his grandiose vision, but also that of the Tufts
family, which from the beginning had marketed Pinehurst as the
St. Andrews of the New World. When No. 2 hosts the U.S. Open
next week, it will be "the ultimate crowning of a long list of
achievements," Dedman says.
Under ClubCorp the resort has added two courses--Rees Jones's
No. 7 and Tom Fazio's acclaimed No. 8--and is in the process of
restoring No. 4. ClubCorp has also renovated the 220-room
Carolina Hotel, the registered national historic landmark that
is the heart of the resort, and in April reopened Pinehurst's
original inn, the Holly, which had been left for the pigeons by
the previous ownership. Since 1984 the population of Pinehurst
has more than quadrupled, to 8,200, and real estate has gotten
so valuable that from 1995 to '97 the village's property taxes
doubled. With the Open putting an exclamation point on all this
growth and prosperity, Dedman should be enjoying the kind of
canonization accorded James Tufts as well as his benevolent
grandson, Richard Tufts, who ran the resort from 1935 to '62 and
remains the most beloved figure in Pinehurst history. Dedman's,
however, is a more muddled legacy.
"Dedman is an extremely unpopular figure in these parts," says
Jack Glynn, Pinehurst's mayor pro tem. "Talk about arrogance.
His company is seen as a bunch of bullies who are used to
getting their way, through economic coercion and legalistic
harassment. The overwhelming feeling here is that they take
advantage of every opportunity to exploit the residents, and
Dedman is recognized as the fellow who has called the shots on
all of it." Glynn is referring to a series of heavy-handed p.r.
blunders and bloody lawsuits that have stained Dedman's and
ClubCorp's reputations in the Pinehurst area, perhaps irrevocably.
Since 1991 ClubCorp has been fending off a class-action suit
from the members of Pinehurst Country Club, who allege that
ClubCorp has denied them sufficient access to tee times and
improperly raised their dues. (Pinehurst's 5,500 members pay an
intiation fee of $15,000, plus $2,040 in annual dues to play
Nos. 1 through 6, which are open to resort guests as well.) Late
last year ClubCorp settled a lawsuit brought by its partner in
the ownership of neighboring Pinewild Country Club, which
alleged fraud and mismanagement, among a laundry list of
charges. The suit, initiated in April 1996, reached such a
bitter tenor that a private detective employed by Pinewild was
quoted in The State, a Columbia, S.C., newspaper, saying that
Dedman and his company were "a bunch of backstabbing,
corkscrewing, double-dealing, lying, cheating, stealing sons of
bitches." (ClubCorp eventually sued the detective, Bill Graham,
and Tohato Inc., the Japanese company that co-owned Pinewild,
for libel. The suit was folded into a seven-figure settlement
paid by Tohato to ClubCorp.) The Pinewild affair spawned a
double whammy of high-profile articles unflattering, to say the
least, for ClubCorp--a Wall Street Journal piece in May 1998
and, less than a month later, a 3,500-word opus that made the
front page of The New York Times business section. The stories
dug up plenty of details from other lawsuits that have pitted
ClubCorp against its members throughout the country.
All of this might have been dismissed as merely hard-nosed
business practices had ClubCorp not started picking on the
little people of Pinehurst. In November 1995 a 69-year-old
village resident, Edmund Dietrich, wrote a letter to the editor
of the local paper, The Pilot of nearby Southern Pines, in which
he said that tips given to resort employees were being withheld.
The company slapped Dietrich with a lawsuit for libel. (The suit
was dropped.) More damning still, in March of this year it came
to light that ClubCorp had threatened local businesses with
trademark infringement for using the word Pinehurst in their
company names. ClubCorp took the position that Pinehurst
referred only to the resort's golf courses and facilities, and
not in any way to the town itself, which was incorporated in
1980 as the Village of Pinehurst. ClubCorp's lawyer on the case,
Stephen Trattner of Washington, D.C., went so far as to tell The
Pilot, "I don't believe there is a Pinehurst, N.C. You may call
it that, and the mail may get there that way, [but] you don't
live in Pinehurst. You live in the Village of Pinehurst." Over
100 concerned calls to the local post office followed, as did a
series of critical editorials, a flood of venomous letters to
the editor and a crystallization of public opinion.
Being pressed on these issues annoys Dedman, who ordinarily
radiates warmth and gentility. "Discussion of these matters is
highly pernicious," he says. "It's like discussing the chastity
of your wife. There is no way to win. You must look at the
larger picture. These are temporary pimples on Elizabeth
Taylor's face, obscuring the beauty. What we have done in
Pinehurst is a beautiful thing."
To be sure, Pinehurst's courses, No. 2 in particular, have never
been better, and the hotels have reached unprecedented levels of
spiffiness. But there is more to Pinehurst than the happy face
put on by the resort.
Rison, Ark., is a depressing town of 1,318 in the south-central
part of the state known as the River Bottoms, and it was there,
during the Depression, that Dedman was introduced to the harsh
ways of the world. His youth had all the flourishes of a Dickens
novel: The family of six lived in a tiny two-room house with no
electricity or running water and a circular tub 22 inches wide
in which to bathe. His father's two favorite pastimes were
drinking and uprooting the family to chase after a string of
ill-fated get-rich-quick schemes. Says Dedman, "He was the
living embodiment of that line from Browning, 'A man's reach
should exceed his grasp, or what's a heaven for?'" At an early
age Dedman grasped that education and a stout work ethic were
his ticket to a better life. When he was 14 he and his younger
brother, Phil, went to Dallas to live with an aunt so they could
attend one of the city's better high schools, North Dallas, and
it was there that he became enthralled with the great poets who
shaped his world view and still make frequent cameos in his
On June 1, 1944, after graduating as North Dallas's
valedictorian, Dedman reported for duty in the Navy. D-Day came
five days later, and he was able to forgo fighter-pilot school
and pursue his studies through a college program for active duty
personnel. He was a maniacal overachiever, taking 60 units in
his first three trimesters and earning an engineering degree in
only one year, all the while playing sailor by day. Over the
next three years Dedman kept piling up academic credentials,
getting a degree in economics as well as a law degree. When he
got out of the Navy the first thing he did was pursue a master's
of law in oil, gas and taxation at SMU, while selling insurance
during the week and real estate on the weekends. By the time
Dedman was in his mid-20s he was a partner in a prominent Dallas
law firm, through which he came to the attention of oil baron
H.L. Hunt, at the time considered the richest man in the world.
Dedman soon became Hunt's righthand man, but it was the
proximity to Hunt's fortune that left Dedman feeling as if he
were falling behind in an oft-stated goal. Rather fancifully,
Dedman had decided during his teens that his life's purpose was
to make $50 million by the time he was 50 and then give away a
million dollars a year thereafter. "Unfortunately I was finding
out that there are only two ways to get really rich as a
lawyer," says Dedman. "Marry a rich girl or work your tail off
for 50 years and then marry a rich girl." It was during a
vacation to Palm Springs with his bride, Nancy--who was many
wonderful things, rich not being one of them--that Dedman struck
upon the idea that would rocket him to the kind of wealth even
he didn't have the chutzpah to dream of.
Dedman caught wind of the real estate craze surrounding the
newly built Thunderbird Country Club, on which fairway lots were
being snapped up at exorbitant prices. However, in conversations
with a few of the investors, he was surprised to hear them
complain about how little money they expected to earn, because
back then it was a truism that whatever you made on the course
you lost in the clubhouse. That's when it hit Dedman like a ton
of gold bricks: Why not build three courses around one
clubhouse? That way a club could triple the income without
increasing the operating costs. The larger membership base would
allow the club to charge less per member, thus expanding the
pool of viable candidates into the burgeoning upper-middle class
families eager to cash in on the good life that came with the
postwar economic surge. The idea was as simple as it was
inspired. When Dedman got back to Dallas, he put his plan into
motion, securing a chunk of land on the desolate outskirts
northwest of the city and then unleashing a full-court press on
what he termed the upper 10% of the community, instead of just
the upper 1% that most country clubs of the day catered to.
Within three months he had taken deposits on 2,000 memberships
for the Brookhaven Country Club, which established its charter
in November 1957, when Dedman was 31. All the upfront money
allowed Dedman to build an expansive clubhouse and 54 holes
without having to take on a loan. A new philosophy in course
management, and a new company, were born.
ClubCorp's early growth was fueled by a couple of factors. For
starters, Dedman still fancied himself a lawyer, and as he was
initially unwilling to give up his practice, he was forced to
put the golf operations in the hands of good people, a
surprising number of whom are still with the company. (Beginning
in 1965 ClubCorp also branched out into the lower-profile but
highly lucrative world of city clubs, which are like country
clubs without the golf courses.) Second, the first stirrings of
the golf boom had left many country clubs ripe for the plucking.
Run as nonprofit entities by volunteer member committees, these
clubs were awash in red ink. After Brookhaven, ClubCorp didn't
need to build its own clubs. The company simply gobbled up
existing ones that were in financial distress. Then, as now,
selling to ClubCorp made sense for many memberships. The company
had more money for capital improvements, and the individual
members didn't have to worry about getting socked with
assessment fees. National contracts and bulk purchasing lowered
the costs of food and merchandise. Thanks to Dedman's homespun
rules--"Every guest is treated like a member, and every member
is treated like a king"--enthusiastic service was the highest
priority. By the 1970s, ClubCorp also offered reciprocal
privileges at its properties.
With this seductive sales pitch it wasn't long before Dedman was
tooling around Dallas with vanity license plates that read 30
PCT, which was the rate at which ClubCorp was growing annually.
Dedman's not exactly sure when his net worth climbed north of
$50 million, but says, "One day I realized, Hell, I'm rich, and
I went out and made what to this day is probably the most
extravagant purchase of my life: I bought a bunch of cashmere
socks. Growing up in Arkansas we didn't have shoes, let alone
socks, so I will tell you that cashmere sure felt nice."
ClubCorp hit the big time in 1975. It bought 13 clubs (to run
its total to 49), including the Inverrary Country Club in Fort
Lauderdale, which was not only the most prestigious acquisition
to date but also boasted the cachet of being the venue for a PGA
Tour event. "That told the world that we had arrived," Dedman
says. In the years since, ClubCorp has begun to horde courses
that are part of the pro golf firmament, including Firestone,
site of the World tour's NEC Invitational; Mission Hills, home
to the Dinah Shore; and Indian Wells, which is part of the Bob
Hope Classic rota. The acquisition of Pinehurst also signaled a
major shift in strategy. Previously ClubCorp had steered clear
of the complexities of resorts, but Dedman persuaded his
lieutenants that resorts were simply country clubs with beds. In
the wake of purchasing Pinehurst, ClubCorp has acquired large,
upscale resorts such as The Homestead in Hot Springs, Va.,
Barton Creek in Austin and Daufuskie Island, off Hilton Head, S.C.
ClubCorp has seen even more varied expansion under Dedman's son,
Bob. After a stint on Wall Street, Bob was elected president of
ClubCorp in 1989 and in '98 became chief executive officer. (His
sister, Patty, is on the board of directors, but has forsaken an
active role in favor of her psychiatric practice and three
children.) Bob has none of the charisma of his father but has
already earned the reputation as a more effective CEO. "No
question about it," says Dedman Sr. "Bob is more organized, more
detail-oriented than I ever was."
Over the last year, in a flurry of aggressive deal-making, Bob
has reshaped the future of the company, forging alliances with
other management companies while stepping up ClubCorp's presence
in the foreign market and in to-be-builts, original projects in
the spirit of Brookhaven. In July 1998 ClubCorp entered into a
joint venture with Golden Bear International that could result
in as many as 36 new Jack Nicklaus Signature courses, which
ClubCorp would co-own and operate. This February the company
teamed up with American Golf Corporation, which is the ClubCorp
of daily fee golf, to buy 45 properties from Cobblestone Golf
for $393 million, the largest acquisition of courses in the
history of the industry. In other deals, ClubCorp has kicked in
$32.5 million to become the largest shareholder in Canada's
ClubLink Corp., which has 23 courses north of the border, and
ClubCorp is building a chain of courses overseas in concert with
the European tour.
In addition ClubCorp is poised to become a major player in Asia,
where the economic upheaval has left a number of prime courses
available at a "deep discount," as Bob puts it, trying not to
sound too gleeful. In his modest office atop the company
headquarters, the kind of monolithic tinted-glass building
typical of Dallas, Bob keeps a moody black-and-white photo of a
flock of sheep on his wall, his reminder to continue his
father's tradition of leadership. "We will never stop
acquiring," Bob says. "In this business you acquire or perish."
In Robert Dedman's recently published autobiography, King of
Clubs, a book that sags under the weight of his aphorisms and
homespun stories, he writes, "We believe in that old Scottish
saying that angels can fly because they take themselves
lightly." It is no surprise, then, that when asked to explain
what he calls the "disputation" that has recently engulfed
Pinehurst, Dedman dips into his vast library of jokes. "Do you
know what happens to lawyers when they take Viagra?" he asks.
"They grow taller. That's a hell of a statement coming from a
In Dedman's view, "Most of what is out there is being pushed by
a small number of lawyers interested only in their own
aggrandizement." At Pinehurst Country Club, Dedman says, "the
overwhelming majority of the members are very embarrassed about
the lawsuit. That is typically the case."
In fact, though, more than 3,000 of Pinehurst's members (55%)
have contributed to a Membership Defense Committee, raising more
than $400,000 to cover the legal fees arising from their suit
against ClubCorp. The crux of this debate centers on a 1980
consent decree that guarantees the members half of all tee times
and puts a ceiling on dues increases, tying any increases to the
cost-of-living index. ClubCorp contends that the consent decree
applies only to those who were members when the decree was
handed down, which would cover fewer than 1,000 people, since
Pinehurst memberships are typically tied to homesites and often
transferred. Last month a North Carolina Superior Court agreed
with the members' contention that transferred memberships should
also be covered under the decree. ClubCorp filed its appeal at
8:30 the next morning.
"They don't go gently into the night," says David Bland, an
attorney who has spent 10 years representing the Raintree
Country Club of Charlotte in various judicial motions against
ClubCorp. Raintree succeeded in forcing ClubCorp to give up its
lease on the club and, as part of a settlement, pay a penalty
for what amounted to trespassing, because ClubCorp had used some
of the club's land to build a cellular phone tower without the
blessing of the homeowners association. "Once they move onto
your property, it takes an act of God or an act of Congress to
get 'em out," Bland says.
Last year's Times article claimed that in the preceding two
years 10% of ClubCorp's clubs had been involved in some sort of
litigation with the parent company. Terry Taylor, ClubCorp's
chief legal officer, calls that number inflated and says that
about three clubs are now embroiled in any legal action. "The
vast, vast majority of our members are thrilled with the service
they are receiving," he says.
This may be true, but ClubCorp's aggressive stance in dealing
with the dissidents seems to highlight whatever disputes may
exist. Robert Dedman is unapologetic. "Just because we have a
great reputation, people think that if they make a few grandiose
statements we'll cave in and pay their blackmail," he says. "We
can't afford to do that. We have had people go to obnoxious
lengths to try to get a settlement. We have zero tolerance for
that behavior. Our philosophy, to quote one of our former
Presidents, is millions for defense but not one cent for tribute."
Dedman is obviously referring to the Pinewild case. When asked
specifically about it he says, "What it came down to was that
the guy pushing all that was a nut." That would be private
detective William N. Graham, the self-styled Fat Man who has
made a career out of his eccentricity, appearing on Late Night
with David Letterman and 20/20, to say nothing of his starring
role in the nightmares of various ClubCorp executives.
ClubCorp first bought an interest in Pinewild in 1987, but four
years later was bought out by Tohato, and in the exchange
ClubCorp got an annual fee to manage the club. According to the
Journal, Tohato's reason for filing the lawsuit was because
ClubCorp was using Pinewild for spillover play from Pinehurst
without compensating the club, and that ClubCorp was mismanaging
Pinewild in hopes of running it into the ground so that the club
could be bought on the cheap. When Tohato hired Graham, things
turned personal. He kept a photo of Dedman on his desk, telling
the Journal, "I just want this guy nailed to the wall." In
August 1997 Graham sent a fax-blast across the nation on Tohato
letterhead detailing an alleged 33 "civil and criminal
violations" that ClubCorp was supposedly engaged in, charges
that were at the heart of ClubCorp's libel suit.
Soon reporters for The Times and the Journal started snooping
around. "I have no respect for Graham as a human being," says
Taylor, "but I will say he was effective at pushing his agenda."
He admits to great personal satisfaction in sticking it to
Graham and says, in what sounds like a boast, "I hear he's
relocated to South America."
In fact, Graham is alive and well and working out of Seneca,
S.C. Bound by the settlement's confidentiality agreement, he
would not comment for this story except to say, "I've just been
through the s---storm of the century, and I'm lucky to have made
it out alive."
The clouds above Pinewild, meanwhile, have finally lifted.
Tohato has brought in another management company, and life has
returned to normal around the club. "It's like in The Wizard of
Oz, when the Wicked Witch is finally killed," says Glynn, who
recently played a round at Pinewild. "All the Munchkins are out
There has been little joy for either side on the trademark
infringement case. Indicative of the nastiness is a letter sent
from Trattner & Associates to Donna Nolan, the owner of
Pinehurst Interiors, a design company based in Southern Pines.
"Your company's financial exposure...is significant...." reads
the letter, a copy of which was obtained by SI. "Resorts could
obtain treble damages or treble any profits that your company
has earned from the sale of goods and services bearing the
infringing marks." Pinehurst Interiors is now Village Design
Group, though Nolan has not been silenced. When the Pinehurst
Business Guild, after discussions with ClubCorp executives,
changed its name to the Village of Pinehurst Business Guild,
Nolan said, "I'd like to kick them in the petunias."
Recently the five-member village council held an informational
meeting, and the business owners in attendance made it clear
that they expect the village to go to the mat for them on this
one. That may not be necessary, as the plot has thickened in
recent days. A golf shop in Southern Pines, Match Play of
Pinehurst, claims to have received a federal trademark on its
name back in the 1970s, which would torpedo ClubCorp's claims to
exclusivity. This is a debate sure to be carried out throughout
the week of the Open. "It's so sad it's funny," says Glynn.
"They've spent 15 years trying to get the U.S. Open to
Pinehurst, and now that it's here they've turned the whole town
into a Gilbert and Sullivan production."
Despite all the bad press raining down on him, it's hard to feel
sorry for Dedman. Though he still haunts the office to consult
on major decisions, he has eased nicely into retired life,
playing golf or tennis nearly every day. (He learned the former
game from Byron Nelson and Ralph Guldahl, both of whom retired
to positions at ClubCorp courses. Dedman, who shot his age when
he was 65 and is a former Dallas city champion, also got some
instruction from Ben Hogan, for whom he occasionally served as a
consultant.) Dedman still has friends in high places--he lives
two doors down from Ross Perot in the Preston Hollow section of
Dallas and counts nearly every prominent Texan as a golfing
buddy, including former President Bush, who while in office had
the Dedmans up to Camp David for a visit. He is revered as a
philanthropist and says he has given more than $100 million to
charity. Dedman even has a major medical center and the liberal
arts college at SMU named after him.
How odd, then, that around Pinehurst--a sleepy little burg that
once upon a time was called Tufftown--his name is so often taken
COLOR PHOTO: PHOTOGRAPH BY BILL FRAKES Robert rules Pinehurst is one of 234 clubs owned by ClubCorp, which Dedman founded more than 40 years ago.
COLOR PHOTO: CRAIG JONES/ALLSPORT Aging beauty ClubCorp poured $20 million into the creaky Carolina Hotel.
COLOR PHOTO: GREG FOSTER The Fat Man Graham planted plenty of stories but got buried in the end.
COLOR PHOTO: DARREN CARROLL All business Bob lacks charisma, but he's a superior CEO.
COLOR PHOTO: GREG FOSTER Roundhouse Pinehurst's small businessmen expect Mayor Glynn and the village council to fight ClubCorp.
COLOR PHOTO: JIM GUND Last hurrah Dedman, who shot his age at 65, calls bringing the Open to Pinehurst a crowning achievement.
"Once [ClubCorp] moves onto your property, it takes an act of
God or an act of Congress to get 'em out," says Bland.
"I've just been through the s---storm of the century," says
Graham, "and I'm lucky to have made it out alive."
"We will never stop acquiring," says Bob Dedman, who took over
in '98. "In this business you acquire or you perish."
"Dedman is an extremely unpopular figure," says Glynn. "His
company is seen as a bunch of bullies."
"These are temporary pimples on Elizabeth Taylor's face,
obscuring the beauty," Dedman says of raps at ClubCorp.