Private Equity–Backed Firm Bowlero Is Ruining Bowling
jacobin.com
jacobin.com
Of course, these were not the best performing stores, and perhaps large chains are out of fashion in the contemporary era. Is private equity simply the scavenger, feeding off the walking-corpses of these businesses, encouraging new growth? I would be more OK with that if it didn't end with shadowy rich finance bros owning everything. The kind of disruption that these PE firms accomplish feels a lot more like corruption to me.
1: https://www.nbcnews.com/business/consumer/private-equity-rol... 2: https://www.theatlantic.com/magazine/archive/2018/07/toys-r-...
There was an opinion piece posted here by Matt Stoller about "economic termites" and this is the pattern I recognize: where corporate involvement makes everything more expensive, while workers' salaries go sideways. https://www.thebignewsletter.com/p/economic-termites-are-eve...
The PE's can only hostile take over public companies, the rest have to sell themselves.
I think the growth of PE's is due to the firms' owners realizing they don't want to be in business anymore, having the goal of eventually selling to someone (ala selling to FAANG in the DOT COM space), or the owners can't scale their businesses beyond what they are now.
An owner has a fiduciary duty to himself and a director is not the one who sells in the end: owners do.
As per Burwell v. Hobby Lobby Stores, Inc. - https://www.law.cornell.edu/supremecourt/text/13-354
> While it is certainly true that a central objective of for-profit corporations is to make money, modern corporate law does not require for-profit corporations to pursue profit at the expense of everything else, and many do not do so. For-profit corporations, with ownership approval, support a wide variety of charitable causes, and it is not at all uncommon for such corporations to further humanitarian and other altruistic objectives. Many examples come readily to mind. So long as its owners agree, a for-profit corporation may take costly pollution-control and energy-conservation measures that go beyond what the law requires. A for-profit corporation that operates facilities in other countries may exceed the requirements of local law regarding working conditions and benefits. If for-profit corporations may pursue such worthy objectives, there is no apparent reason why they may not further religious objectives as well.
https://www.latimes.com/archives/la-xpm-1997-dec-03-fi-59990...
And it may not compel a specific action. The law is there mainly to prevent situations whereby corporate officers tank a company on purpose say, for the benefit of another company for which they are the shareholders or receive other benefits. Say, pass on a deal from company X which has more favorable terms vs. company Y for which the CEO sits on the board. In this case the CEO could be held fiscally and potentially criminally liable for acting against the best interests of the company.
Short of a bankruptcy, I'm not sure there is any legal compulsion to sell off any part of a company.
Kind of but I also don't blame someone when PE firm shows up with briefcase full of life changing money and asks to buy. Few people can resist that temptation, especially as they get older.
*Here efficient means: remove everything that makes it fun and unique and replace with the least expensive, low quality alternative. Add invasive advertisements. Charge extra for anything that can be carved off the original service or product.
Since then, there has been no downside to becoming an effective monopoly, so why make a better product?
Theil and his followers are exploiting a weakness in the system. If they can take all the money, why should they give a flip about anyone else in the system that supports their lifestyle? After all, it may take until they are dead for it to collapse.
Not to mention that until interest rates rose a few years ago, these PE acquisitions could be funded with cheap borrowed money.
However:
> Is private equity simply the scavenger, feeding off the walking-corpses of these businesses, encouraging new growth?
I think there is a lot of truth to this. The kind of business that is susceptible to this kind of pillaging tends not to be one with a promising future. A healthy company tends to trade at a healthy premium to its net asset value (reflecting expected future growth) so it makes less sense for someone to buy up the company just to extract the assets. I suspect in many cases the alternative to a PE takeover would be consolidation or just plain old bankruptcy.
There is a separate, but arguably related, problem of PE extracting consumer surplus, ie, buying a company and putting the squeeze on customers (charging more for shittier products) in order to increase profits. But that is far from a PE-specific problem, as can be seen from the many cases of enshittification in public companies.
The other point is that we only hear about PE deals that "go bad" (either for the investors or the company) because that's the juicier story. PE firms are buying up lots of companies all the time, but "PE deal goes okay" is not a good headline. There are probably a lot of brands out there that you don't even know are owned by PE. Contrary to popular believe PE isn't just about stripping the meat from dead or dying companies, though it is a common strategy (and one that is arguably more prevalent in certain parts of the economic cycle).
Ultimately they’ll probably just end up with all the land while burning what’s currently on it, as that allows them to put the squeeze on the entire physical economy, and then we’re back to feudalism all over again.
For the lanes, they had some fancy new tablets in place of the old school 80s keyboard system.
We couldn't figure out how to change our names from "Player 1". Tapping the name did nothing. Navigating all over the various screens revealed nothing helpful. No help page. Turns out you need to tap the little default avatar for your player, barely a fingertip large. None of us imagined it was a touch target. When someone quit, it turns out you need to ask the front desk to remove them.
Eventually I noticed that there were no fun animations between plays, like the old animated videos of a bowling pin stopping his car to get out a "spare" tire. Just a scoreboard. You might say they were imitating the professional atmosphere upstairs, but then I wouldn't have bright lights flashing in my eyes during my approach to bowl.
The lane next to me reached a stuck state where no matter how many balls they sent down the lane, the system wouldn't pick the pins up or send the balls back. I had never seen this happen in my prior 20 years of yearly bowling, though I'm sure it happens occasionally.
What happened to computing? Are we the only industry whose output quality seems to go backwards every year? Is it just a beginning lull while we figure out how to provide lane bumpers for the Eternal September programmers? Or do we accept the econ-left topic of the year and blame private equity for our inability to produce UX, too?
Anyways, I do recommend the bowling hall of fame. The HOF player pictures look exactly like you want them to. Late in my last game a guy strolled by and explained how to bowl a strike by lining up on the right side instead of the left like I was doing. I handed him the ball and he threw a slow, easy strike, which scored me a spare because I suck. I thought he was an employee but I was later filled in that he was a hall of famer leaving the upstairs tournament late.
Enshittification is coming for everything.
I don't have anything against mobile, but unfortunately the trend has been that "if it works on mobile, its good everywhere else". Hence the move towards "discoverable" interfaces, which makes sense when you don't have much screen real estate. But when you do, I don't think there's anything wrong and labelled buttons, not just icons. And Bring Back the Bezel!
To be fair, entering the player names on these systems has long been an exercise in frustration. Here's a pic I took in 2012, where the first of six steps was "Press the qubica key" and it went downhill from there: https://evan.tumblr.com/post/30872104470/
Dental Offices, Urgent Care Clinics, Nursing Homes, Animal Hospitals, Utilities...
Personally, I believe that the Mars group aggressive acquisition of veterinary clinics is partly to blame for the spike in suicide for Veterinarians. [0]
But I also don't see this behaviour of the market to ever stop on its own.
It's too profitable.
Pet owners and rising costs of doing business are the reason for the spike in suicides. The human customers are awful to deal with, you spend a lot of your time killing animals that you loved enough to devote your career to and the economics of the business mean that if you aren't already an established vet business you will never make good money.
Suicide is a huge problem in the field. My wife’s class of slightly over 100 has had two suicides.
We're 50 miles away, and still take the cats to him (unless it's particularly urgent).
VCA (or whoeever) has been nipping on his heels. He may take the offer and move out closer to us and open a new shop. I know he's considering it. After he bought his practice from the original vet, that vet went out and opened another practice also years ago.
"The age-adjusted suicide rate in 2022 was 14.21 per 100,000 individuals."
So 1.4 suicides per 100 is 100x the national average.
My wife caught a stray cat in the other house who we've been trying to gentle for most of a month. We've got a spare room we can use for this purpose for a while and we seem to be making progress at about the rate we'd expect but we don't know if we can get him to live in our house with the other cats or if he can share the barn with another cat or if we will release him or he will escape or ...
He's a Tom and we have to neuter him regardless and the issue got more urgency because he sprayed on a cable mess.
Calling up private practice vets I found that they want to see a cat for two visits (first to get bloodwork for anesthesia) and that each visit will cost about $400. I can't afford $800 for an animal whose fate is unknown and since he's not used to being handled I don't want to pack him into a box twice. (One time I can glove up and surprise him, the next time won't be so easy)
Turns out the Uni I work at has a clinic every month or so where I can get the neuter done free as a staff member but it involves waiting for an announcement on a Facebook page and signing up on a form which typically fills up in an hour. If it all works out I can get him done in about two weeks, a few days later than the private clinic could do the work.
I used to take my cats to get regular checkups 20 years ago but I've long fallen out of the habit because it's gotten too expensive : our other three cats are due on their rabies shots and we're taking them to a clinic open periodically at a store that offers low cost services.
https://en.wikipedia.org/wiki/Burger_King_(Mattoon,_Illinois...
We're at a 40-lane independent house now. It's fantastic, a real gem. And they fill almost all of those lanes with leagues, often 2 or even 3 a day. The loss of independent houses and the growth of trash like Bowlero is bad for the sport.
Normal Anti-Trust would be prevent this but since we have thrown that out the window under consumer harm, Bowlero can claim "See, our lower prices are good for consumer!", be ignored until they crush you then raise the prices after you are crushed.
Bowlero stock has been dramatically boosted by investment personality Jim Cramer, who has gushed over the company — “You can’t go wrong with Bowlero!”
Their mention of Bowlmor Lanes was casual and dismissive. In the early 90s when Shannon bought the place it was a completely dilapidated mess you wouldn't want to go into and he turned it into the most profitable/successful bowling center in the entire US. I lived through the transition and it was significant.
In my experience private equity is a symptom, not the cause, they're the vultures picking the corpse...
Bowling Alleys | The Economics of Everyday Things
If private equity boosted bowling immensely, would Jacobin write about it?
Having said that, they have a point about Bowlero stock. Leveraged to the hilt (98%!!!), and revenue and profits stuck at unsustainable levels [0].
My roommate is on the spectrum and works at a Bowlero center. The article definitely rings true, at least in our experience in the Boston area.
So PE can't take all the blame or the continuing blame.. The bankruptcy of AMF and Brunswick was a large catalyst.
- The PE guys prove bowlings alleys aren't dead, and inject a ton of money and interest and arrest the decline, leading to a growth in the sport
- The PE guys don't arrest the decline, but end up injecting a ton of money renovating these locations, they eventually sell them at a loss to enthusiasts who now can keep these places running for a lot longer.
Either way, it's a win.
Pretty tired of the trope _PE == bad_. I wish HN could develop a more nuanced discussion of these ideas. Sometimes it's a wonderful thing to get someone else to prove viability.
evolve or die is the harsh reality of capitalism
This whole "PE ruins [x]" assumes that x was doing well before PE invested, which in most cases, is a complete fairtytale. Bowling has been dying rapidly over the past 2 decades. Every "local" bowling alley is dark, dingy, non-updated/maintained, etc etc.
If customers actually wanted true, simple bowling and not "upscale entertainment", there would be businesses to fill the void. Unfortunately for people who really like bowling, the demand just doesn't exist.
This presumes oxygen in the ecosystem - in this case affordable commercial rents, well trafficked retail locations etc. In their absence local maxima can create all kinds of exploitative socially detrimental businesses (e.g.: casinos, betting shops, dollar stores, lots held empty to maintain property values etc.
It's also circular - a culture sustain a given hobby if that hobby is reliant on venues that no longer exist, aren't safe or customer friendly etc.