Club News

Club Industry Features Clubs of the 1980s

Pamela Kufahl, editor Dec 1, 2008 7:00am
Industry News

By the time the 1980s — the decade of Ronald Reagan, "Dallas" and JR Ewing, Richard Simmons, big shoulder pads and even bigger hair — arrived, the fitness industry had emerged from basements and garages where it had been home to bodybuilders to become an industry of tennis, racquetball and fitness facilities appealing to a broader market with broader offerings. In 1981, 70 million Americans — about half the adult population — did some form of exercise compared to 24 percent who did so in 1960. Thirteen million of those people belonged to at least one of the 5,000 health clubs in the country at that time. Many of those exercisers were part of the Baby Boomer generation (the tail end of which turned 26 years old in 1980), and they were in pursuit of becoming a "10" as the 1979 movie implied Bo Derek was.

In this decade, member of the National Tennis Association and the National Court Clubs Association formed the International Racquet and Sportsclub Association (later renamed to International Health, Racquet and Sportsclub Association). The fact that the word "health" was not originally included in the name of the association demonstrates that at the beginning of the decade, most clubs were tennis and racquetball clubs. However as the decade progressed, more of those club operators began moving away from being strictly racquet clubs to including fitness. Aerobics classes became more popular after the 1985 movie "Perfect" with Jamie Lee Curtis as a fitness instructor helped push group exercise as a programming option.

Most club owners in the 1980s were independent club operators. The biggest name in the industry was Health and Tennis Corporation of America, later to be known as Bally Total Fitness, which grew as it gobbled up one club after another. However, other players made names for themselves, too, in this decade. Cardio-Fitness Centers, Cedardale Athletic Club, Club Sports International, East Bank, Family Fitness Centers, Gold's Gym International, New York Health & Racquet Club, Red Lerille's Club, Sawmill River Club, Sports Training Institute, Tennis Corp. of America, Vertical Club, Western Athletic Club and 24 Hour Nautilus were some of the most talked about club operations in the 1980s. Some of their stories from that decade follow.

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24 Hour Nautilus (24 Hour Fitness), San Ramon, CA
Mark Mastrov can thank a knee injury for the beginning of his health club career and 24 Hour Fitness. In the early 1980s, the college graduate was rehabilitating from a knee injury at a club in San Leandro, CA, where a friend of his was a member. He met the owner of the club, who convinced him to come to work as a part-time trainer in return for a free membership. After that owner sold the club, the new owner convinced Mastrov to buy an equity stake in the club (thanks to a $15,000 loan from Mastrov’s grandmother). Mastrov then became manager of the club, and in 1983, he bought out the owner.

When Mastrov took over operations of the club, he found people waiting for him when he opened the doors at 6 a.m. and had a hard time getting people to leave when he closed at 11 p.m. One night, Mastrov flipped the keys to the janitor and asked him to lock up when the last people left. The next day, the janitor told him that some people stayed much later than Mastrov had anticipated they would. Eventually, he decided to stay open 24 hours, a concept that was unusual at the time.

However, that’s not the only unusual thing Mastrov implemented at his club, which he grew into several more clubs in northern California in the 1980s by acquiring failed clubs or building new ones. Mastrov was one of the first to offer electronic funds transfer (EFT), and he also offered monthly memberships at a time when memberships were typically one, two or three years long.

At the beginning, Mastrov had difficulty getting bank loans, so he grew through cash flow in the 1980s.

“Initially, when you start, you don’t know that much, so you just want to sell, hit targets and retain members,” Mastrov says. “As we went along, we found out that the better you took care of your members, the more they stayed.”

Mastrov says that in the 1980s, the club was about having fun and being social. He also wanted the club to be for everyone rather than just for a specific market.

“That gave us reach,” Mastrov says.

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Cardio-Fitness Centers, New York

Jerry Zuckerman founded Cardio-Fitness Corp. in 1977, eventually growing his Cardio-Fitness Centers to five clubs in New York and one in Chicago. However, calling these facilities "clubs" does not tell their whole story. Cardio-Fitness Centers operated differently from other clubs in the 1980s, going after corporate relationships in ways club owners hadn't done before, according to Rick Caro, president of consulting company Management Vision, New York. Zuckerman's company initially focused its client search on top executives, whose companies often funded their membership costs fully.

Executives would come into the club two to three times a week on a scheduled basis for a 45-minute appointment with their assigned personal exercise physiologist, all of whom had master's degrees in exercise physiology. The club would provide shorts, a T-shirt and socks for the clients, who only had to bring their sneakers. The trainers designed a workout routine for each of their clients, and during the first six weeks of membership, the trainers tracked clients daily. They even called clients who missed an appointment to reschedule.

"They were breakthrough at that time," Caro says about the club.

Some people might also have considered them elitist since they focused on top-level executives. However, in 1985, the H.J. Heinz Co. (through its subdivision Weight Watchers International), acquired Cardio-Fitness Corp. for an estimated $50 million. With this purchase, the company's marketing broadened beyond executives to everyone at a corporation.

At the time of the purchase, Zuckerman said that the acquisition would allow Cardio-Fitness Corp. to expand rapidly throughout the country. Cardio-Fitness no longer exists, but the model it established in the 1980s is still followed by some personal training studios and personal training departments within fitness facilities today.

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Cedardale Athletic Club, Haverhill, MA

When people thought of large, revenue-generating clubs in the 1980s, they thought of Cedardale, just 45 miles outside of Boston. Ed and Zoe Veasey and Dale Dibble opened the club in 1971. In the mid-1980s, the club had 5,000 members, was 164,000 square feet and sat on 13 acres, five of those devoted to five pools, 10 tennis courts, a restaurant and a lounge. By the end of the decade, the club had grown to 6,000 members, 175,000 square feet and 25 acres with 10 outdoor courts, 12 racquetball courts, an indoor pool, five outdoor pools, a free-weight room, circuit weight center, cardiovascular area, day care center, sauna, steam room, whirlpools, tanning equipment, a physical therapy area, five basketball/multi-use courts, two bars/snack bars, outdoor grills, a pro shop, travel agency and an automated teller machine.

However, the club hadn't always included so much variety. At one time, the club's focus was racquet sports. Dibble was the first club owner to convert tennis courts to racquetball courts, swimming pools and basketball courts, says Rick Caro of Management Vision. He also was one of the first to stop renting courts by the hour and moving to a membership model. Dibble pushed for the use of software programs, including a computerized bookkeeping system that was unusual at the time.

He also created incentives for department heads to help make the facility more than a leader in revenue, which it was. In 1986, the club earned revenue in excess of $4.6 million, almost four times the industry average at that time, according to an article about Cedardale in Club Industry that year. In 1988, Cedardale had revenue of $5.2 million, and that grew to $5.5 million in 1989.

Dibble retired in 1984, but he kept an eye on the club's monthly revenue for many years. Ed Veasey kept in place many of Dibble's practices, requiring that department heads keep expenses at 60 percent of gross revenue. The department heads created their budgets and kept track of them.

"Our people understand that if the club grows, they are going to get bigger sales and bigger bonuses," Ed Veasey was quoted in a 1989 article in Club Industry. Bonuses in the late 1980s could run as high as $10,000 for senior managers, according to Veasey.

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Club Sports International (Wellbridge), Denver, CO

In the 1980s, residential and commercial developers were catching on to a new craze — putting fitness centers in their developments. However, they hadn't quite figured out how to run these facilities. That's why Club Sports International, which is now known as Wellbridge , came into being in 1983 in Denver. The company started managing these facilities for developers, eventually following the developers to their properties around the country, says Ed Williams, CEO of Wellbridge, who was with the company from the beginning.

"We learned how to manage remotely, how to manage most efficiently and still make a profit," Williams says. "Our heritage is doing management in remote properties."

Williams says that many clubs in the 1980s were mom and pop operations, which often meant they were not run professionally.

"We thought we could be more successful and make them more successful," he says.

Few club management companies existed in the 1980s, except for Club Sports International, Tennis Corporation of America and Club Corporation of America (CCA).

"You had to convince [developers] that you were the right one to manage their properties," Williams says.

Williams didn't initially have a long-term plan for growing the company, saying the growth of the company just happened.

"In the 1980s, I thought that by the mid 1990s, I'd be retired," he says.

However, the company continued adding clubs to third-party manage to its portfolio, growing to 80 clubs at one time. The company also branched out into operating its own clubs — delaying Williams' retirement plans indefinitely.

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East Bank Club, Chicago

If Daniel Levin and James McHugh's original plan had worked out, the East Bank Club would be an apartment complex. In 1973, that's what the two had planned to build in the neighborhood now known at River North in Chicago. Instead, financing fell through because the Illinois Housing Development Authority didn't think anyone would want to live in the area, which had been a railroad turnaround area with barns and sheds. So Levin, founder and chairman of The Habitat Co., and McHugh, CEO of James McHugh Construction Co., took their 142,000-square-foot parcel and turned it into a health club — but not just any health club. The two planned to make it a larger and more elaborate health club than Chicago had seen before. They opened the club in December 1980, with more than 3,000 members and 100 employees.

"We wanted to offer the kinds of programs, amenities and facilities that would appeal to people with a variety of interests," Levin is quoted on the company's Web site. "We wanted to create a community where members would come together to talk, train, eat, drink and socialize.

Essentially, it was our ambition to create a ‘home away from home,' offering our members both connection and kinship."

Simon Meredith, now the club's manager, started with the company six months before the opening. He says there was a tremendous excitement about the club opening.

"It seemed that this would be a hit if we knew how to operate our club, gave our members the best and did things in a first-class way," he says. "That seemed to be a great recipe for success."

The mission of the club was to create and run a club that offered the best in equipment and services along with a gracious social environment. The club always had a big food and beverage component, but back in the 1980s that was a part of the business that most club operators didn't want to touch, Meredith says, adding that today the club's food and beverage business brings in $10 million a year. However, it was necessary for East Bank to offer this component to fulfill its social mission.

"This is a place people would come and break bread with family and business associates," Meredith says.

The club is close to downtown Chicago, and in the 1980s, it had 10 indoor tennis courts, eight racquetball courts, three hardball squash courts and a 1/4-mile indoor track, which attracted Chicagoans during inhospitable winters. In the early 1980s, the club had a few exercise bikes, one line of strength equipment, high impact aerobics and stretch mats, Meredith says.

With these offerings, members tended to be middle-age people who could afford the $50 monthly dues (by the end of the decade, dues were $70 per month). Older and younger people weren't members, partly because club management didn't yet know how to reach out to these markets, Meredith says.

However, East Bank management learned, along with the rest of the industry, that to attract more people, they had to have better facilities and equipment. They did just that, and the health club prospered and grew in the 1980s, Meredith says.

"People were having trouble describing it," Meredith says about the club during the 1980s. "It was a very social club from the get-go. Some would say that our club members were not serious about their fitness. They would call it a meat market. It was a way to try to diminish our club. But we were very social, and it was a hot place to be. But people were getting fit for all the reasons they were getting fit."

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Family Fitness Centers, La Mesa, CA

Ray Wilson had already founded and sold several club chains before starting Family Fitness Centers in 1977 in La Mesa, CA, but he had never intended on turning this club into a chain, he says. Instead, he opened the first Family Fitness Center to mass test the Lifecycle, a bike concept that he bought and, along with Augie Nieto, refined.

However, the "testing facility" turned into a chain of about 32 clubs in Southern California by the end of the 1980s. Although the club's name implied its focus was on family, Wilson says the focus was really on cardiovascular exercise, something that was just beginning to be popular in the 1980s. Prior to then, club owners operated one of two types of clubs — one that focused on muscle building for bodybuilders and one, like his European Health Spas that he founded in the 1960s, that focused on spas for people who disliked exercise but enjoyed spa offerings, Wilson says.

"Exercise was thought of as work, and no one wanted to work," he says of people in the 1950s and 1960s. "The spa was the frosting that attracted them."

By the 1980s, people were less afraid of exercise and were more aware of the need for cardiovascular conditioning, so Wilson tested the need for a spa in a fitness facility by building his second Family Fitness Center without a spa. It worked so well that he never put a spa in another Family Fitness Center.

Wilson also focused on cardio at his clubs because he made a promise to his friend, James Lovell, who was an astronaut, commander of Apollo 13 and later was on the President's Council for Physical Fitness, that he would never open another club without some sort of cardiovascular equipment in it. Lovell told Wilson that the health club business would get better and better as children became more educated about the importance of cardiovascular exercise. Wilson saw this play out when he went to a health fair in the 1980s in which the children had made a large heart and simulated blood flowing through the arteries at increasing speed as the heart got a cardiovascular workout.

"That sold me that the future of the industry was cardio because these kids knew that," Wilson says.

He put several lines of cardio equipment in his clubs (at one time installing seven lines and 200 to 300 pieces of cardio equipment) when many club owners were still committing to just one line.

He made other changes, too. Because clubs in general were attracting more members, he moved from long-term memberships (lifetime memberships in some cases) to dues memberships and initiation fees. Because his facilities were family oriented, he also offered child care.

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Health and Tennis Corporation of America (Bally Total Fitness), Chicago

By the beginning of the 1980s, Don Wildman was already a name in the business, having cut his teeth at Tanny Health Center and then founding Health and Tennis Corporation of America in the 1960s, growing it to 200 clubs by 1983. Much of the growth came through purchasing other fitness chains, such as Tanny Health Centers, Chicago Health and Jack LaLanne's clubs.

In the 1980s, Wildman's partner in Bally was Roy Zurkowski, who had won the Mr. Chicago title in 1953. Health clubs were getting away from being just for bodybuilders. To change the image, the two installed the latest equipment in their facilities and tried to build a brand that would appeal to a broader market. They used celebrities, such as Linda Carter, Cher and Victoria Principal, to advertise their clubs during the decade of "Wonder Woman," "The Sonny and Cher Show" and "Dallas."

"Our clubs are successful because they're 90 percent environment and enthusiasm, and 10 percent equipment," Zurkowski was quoted in a 1986 article in People magazine.

In 1983, Wildman received a purchase offer he couldn't refuse from Bally Entertainment Corp. The company bought Health and Tennis Corp., initially renaming the clubs Bally Health and Tennis Corp. Wildman stayed on with the company until 1994. During that time, the club chain continued the buying spree that Wildman had been on prior to the purchase by Bally. One of the biggest purchases was U.S. Health in 1988 for $55.5 million. By the end of the decade, the company renamed all its purchases Bally Total Fitness to bring them under one brand.

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New York Health & Racquet Club, New York

Celebrity spotting may be easy for people to do today, but back in the 1980s, it wasn't as common to get a glimpse of your favorite celebrity in a newspaper or magazine (and of course, the yet-to-be-invented Internet). However, members of the New York Health & Racquet Club (NYHRC) often had celebrity sightings right within the walls of the club, says Sal Candela, vice president of corporate sales for NYHRC. Candela has been with the company since 1980, working in management, club sales and club operations before taking on his current post.

For part of the 1980s, Candela was general manager at NYHRC's club near Saks Fifth Avenue. This facility was the premier club for NYHRC, which had four clubs at that time.

"One morning, I opened the club and someone was walking in, and I had to ask her to wait," Candela recalls. When the woman looked up at Candela, he saw that it was Cher. Other members in the 1980s included Ryan O'Neal, Farrah Fawcett and Treat Williams, he says.

NYHRC opened its super club at 110 W. 56th Street in the 1980s. At 40,000 square feet, it was one of the largest clubs in Manhattan at the time, he says, adding that it had racquetball, a pool, a sauna and steam rooms. It was a popular club filled with celebrities and athletes, he says.

Because the club was near talent agencies and record companies, out-of-town celebrities often got passes to NYHRC for a workout. Some of the clubs' locations near Broadway also helped attract people who worked on Broadway.

The non-celebrity members in the 1980s included people in their 30s who had a long history of believing in fitness and spa services. They also included residents in the neighborhood who believed in swimming (the club was one of few with pools at that time). When the company opened its Wall Street location in 1985, it was the only club in the area, so that club attracted stock brokers and lawyers, Candela says.

"Back then, the perception was it was a high-end club," Candela says, even though the price point was affordable to many. However, the club wasn't doing EFT yet, so people had to pay about $549 in full for a year's membership or $1,000 for a two-year membership.

Despite the high upfront cost, Candela recalls a 75 percent to 80 percent renewal rate at that time.

Part of the reason for the high renewal might have been that people joined NYHRC to be in the "right" spot, Candela says.

"They got benefits from coming to the clubs, but it was a tremendous social component, too," he says.

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Sports Training Institute, New York

The Sports Training Institute got its start in 1975 when Dr. Michael O'Shea opened a no-membership model personal training facility that attracted a who's who of athletes, including Billie Jean King, Martina Navratilova and John McEnroe. The New York-based facility eventually expanded to 10 locations in six states.

Trainers at the facility had to have an exercise science or related degree and had to go through 80 hours of training before working with any clients. Clients had to received clearance to exercise from their doctors, and only then did the trainers conduct a fitness evaluation on each client, take a health history, do musculoskeletal screening, analyze the client's body composition and complete flexibility, strength, aerobic capacity and endurance tests.

The facility helped set the standard for personal training facilities of the future, even though O'Shea eventually sold the business to a physical therapy company. He is now fitness editor for Parade magazine.

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Tennis Clubs of America (Midtown Athletic Clubs), Chicago

The Tennis Clubs of America (TCA) may have started in 1969 in Chicago with the world's largest indoor tennis facility, the Midtown Tennis Club, but by 1980, Alan Schwartz, co-founder, responded to a change in what people wanted by adding fitness to his clubs. The fitness clubs proved so successful that by 1989, Schwartz was approached by McDonald's to develop an in-house fitness center for the company. That started TCA on its path of managing corporate wellness centers throughout the country.

In the fitness industry, TCA was probably known just as much for Schwartz's dedication to improving industry practices as it was for its clubs and club management. Schwartz pioneered the use of an industrial revenue bond as a vehicle to finance a multi-sport facility. He also helped write and teach the first management training course for club professionals.

Schwartz created the first industry facts and figures survey, now produced annually by the International Health, Racquet and Sportsclub Association (IHRSA) as "Profiles of Success: IHRSA's Industry Data Survey of the Health and Fitness Club Industry." He created the first industry-wide program for worker's compensation insurance.

Schwartz was one of the primary forces in establishing accounting standards in the industry that allowed club owners to keep their books the same way, which makes it easier for bankers to determine how well clubs are doing.

It's no wonder, then, that Schwartz's son, Steven, joined the company in 1987, continuing the father-son tradition that was started when Alan Schwartz co-founded the company with his father, Kevie.

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Western Athletic Clubs, San Francisco

Jim Gerber may have opened his first club, The Court, in 1974 as a way to have more racquetball courts available to him, but he soon saw that fitness could be profitable, and he moved on to open the San Francisco Bay Club, the first coed multi-facility club in the country, in 1977. After the Bay Club sold out its memberships before even opening, Gerber planned his next club, and the company really hit its stride in the 1980s, expanding under the umbrella of Western Athletic Clubs into several other cities in California.

Gerber says that Baby Boomers were looking for ways to continue to exercise and to play sports, such as racquetball, tennis, squash or basketball. At that time, exercise was more about recreation than health and fitness, he says. And that was about the time that aerobics and group exercise started, so the company rode that and evolved into more of a fitness and exercise place. In the 1980s, the Bay Club already was offering yoga and Pilates classes, although the Pilates classes were used mostly as rehabilitation for San Francisco ballet dancers.

"So we've been in the yoga and Pilates business for 25 years," Gerber says.

Not only did the club offer members many sports and fitness opportunities, but it was a great place to meet people, he says.

"It was a real club," Gerber says. "That's one way we've characterized ourselves — as a place to make friends and meet people."

The company had a fairly uncommon financial model at that time — what Gerber referred to as a country club model, which meant an initiation fee and monthly dues but no contract.

"You could quit anytime you wanted to," he says. "That put the emphasis on us keeping members happy. As a result, we didn't advertise at all. We sold based on referrals from members. Back then, that [business model] was a very distinct difference between our clubs and other clubs in the West. The others were more fitness centers. Because it was more expensive to join, it really focused on a more economically upscale clientele, and it always has."

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