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Spin, Spin, Spin and I'm Not Talking About Cycling

We live in an era of “say it enough times, and it becomes the truth.” Washington politico-marketers have honed this art into a polished near-science in the last dozen years. Our industry may be beginning to follow that trend.

The dictionary doesn't define the word “spin.” The closest word that I can think of to describe it is “specious,” which was used for generations to describe something that is semi-factual and one-sided but not accurate.

I can't stand spin. And it is extremely challenging for anyone not to be specious because, after all, we all have our own points of view, our own set of rules, our own truths. But I also think there are times when someone should speak out if speciousness starts to take over, so I guess it's up to me.

The following are a few “spins” that are making me dizzy.

A recent Gallup poll, as reported by one of our stalwart industry magazines, “‘paints a surprisingly positive portrait of Americans’ fitness profile.” The poll's results indicate that 72 percent of all adults engage in vigorous or moderate exercise at least once or twice a week. This was claimed by the publication as great news for our industry. But I looked a little deeper.

This “study” was based on phone interviews with 3,027 adults, which is 0.00001009 percent of our population. Hmmmmmm. Vigorous was described as “lasting at least 20 minutes and causing large increases in breathing or heart rate.” Moderate encompassed “walking and gardening.” And, was it once a week or twice a week? It seems as though this might make a difference.

Seven out of 10 American adults do either nearly sedentary activity or some kind of exercise that gets their heart rate up for somewhere in the neighborhood of about 40 minutes a week, which is 0.00396 percent of the time. Terrific. Is this a breakthrough or a blockbuster story?

Bally Total Fitness also regularly practices spin. The company's executives reported clear evidence of a turnaround in their deeply troubled company. I listened in on their entire June 28 earnings conference call then read an industry magazine's feature interview with their present chief executive officer. Below are some quotes from the article or the conference call, with my findings.

I think we've done a good job.” They came close to losing the company in a proxy fight. They have better than 2.5 times debt to market cap. They have admittedly aging facilities in many of their markets. They collect about $13 per month per average membership across the board. Do you call that a good job?

Mergers and Acquisitions Report [notes that] Bally has a market cap of $320 million. [They have] suggested that — assuming a multiple of seven to eight times EBITDA — Bally might be expected to sell for $252 million to $289 million.” This is a company that has more than $600 million in debt, is questionable as to how it will pay off that debt from still-limited cash flows, and is apparently being played like a roller coaster by short-term equity traders in the stock market. They are trying to sell off unprofitable regions with no potential buyers, and on the books of record, there is absolutely no stockholder equity. Please tell me how anything but a “fire sale” will result for this outfit?

As several investment company analysts have publicly stated on the Internet, Bally continues to practice spin with its numbers and its numbers reporting. It is similar to a lackluster-service club saying, “Well, we're better than our competitors.” In other words, is awful better than abysmal and thus by spinning it, it becomes good?

Finally, at a recent conference/trade show, a noted industry expert was heard to say: “I think this industry is headed in exactly the right direction.” Is that so? Right now, there are more than 30,000 clubs and no increase in net memberships for the past 18 months, decreasing market-share-of-members-per-club for the last five years or more and clear evidence of down-pricing and commoditization in most major markets.

Spin, spin, spin. It gives me a headache.

Michael Scott Scudder, a contributing author for Fitness Business Pro, owns and operates MSS FitBiz Connection, an online-based club consulting and training service. Scudder can be reached at 505-690-5974 or

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