The £58m entrepreneur tells us how he moved from cars to a £9m golf venture
Businesspeople often fantasise of retiring and wiling away their days playing golf.
In Paul Gibbons’ case, his entrepreneurial career has taken on a second wind as he made golf his business. His company Leaderboard now has a collection of five golf courses, having recently purchased one in Oxfordshire.
The 66-year-old golf tycoon’s venture comes after an early heyday of being one of the two co-founders of car sales mag Auto Trader. Gibbons started the first Auto Trader title, “Thames Valley Trader”, at the age of 30 with his friend John Madejski. By 1998, the pair were publishing 52 titles under the Auto Trader label with a total circulation of over 700,000. They sold their business that year for £260m – it was gobbled up by the Guardian Media Group and ran as “Trader Media Group”.
The deal catapulted Gibbons into the UK rich list, thanks to his stake netting him £86m. Lately, his net worth has been valuated at around £58m. Despite his blazing business success, Gibbons has shunned the spotlight (unlike Madejski, who later took over as chairman of Reading Football Club and is often seen with celebrity friends like Cilla Black).
However, Gibbons’ golfing business Leaderboard shows no sign of slowing down, as I found out upon talking to him.
I can’t help wondering why John Madejski seems to get the credit for Auto Trader, rather than you as well?
We created the idea together and launched it on a piece of paper. When we sold it, I had a very young family at that time. John was beginning to get the publicity and I was more than happy to keep myself out of the press because we had a son at school and I didn’t want people ribbing him because of what his dad was doing.
What drew you to golf as your next business area?
When we sold Auto Trader, I cleared off on holiday with my wife and my son. We sold it and signed the papers on the Friday and it was on our flight on Saturday. I came back and decided to get my golf together and start playing it. I felt I needed to start doing something… I was 50 at the time. Then a golf course came onto the market which I knew, called Sandford Springs.
My wife said, “Why don’t you go have a look at it, as you’re going to need something to play with and keep you going.” I thought it had loads of potential. We had a look at it and it was in quite a desperate condition. The owner was keen to sell it too.
I said to my wife I’d do it, but she’d have to come and do it with me and look after everything inside, while I look after the management of the business.
So it wasn’t a misty-eyed fantasy of owning a golf course that drove you?
No, people used to ask me if I would own a golf course and I said I wouldn’t as I didn’t want it to spoil a good hobby of mine, which I felt it could!
I then talked to my accountant about it and he said I had a massive tax bill, although I didn’t go abroad – John went to Kuala Lumpur to save his taxes and I didn’t, as I stayed here. My accountant said I could use the Enterprise Investment Scheme to save 40% in tax.
It was just about washing its face when we went into it and we turned it around. We didn’t turn it around into making profit, but I was investing money, so it was a neutral situation. I began to like it and I enjoyed the freedom of owning and running a golf course. As time went by, I began to enjoy the running of it more than playing it.
Did you find the costs were greater than you thought? It must cost a lot to keep the greens looking good…
Absolutely, but it’s like everything – you get the income to pay the outgoings, and we had a very strong membership there, which we’ve still got, and it’s covering the costs.
When you take over a business, you’re not just up against the marketplace and the competition – you’re up against its previous reputation, and you have to re-educate people into thinking differently about a product. That was more difficult than I anticipated because over the years the course had been let go and it was a very wet golf course, certainly in the winter, almost unplayable at times and a bit run-down. I thought naively that you just upgrade everything and then bingo, you’re back in business. That’s what we did, by first putting in a drainage system into the golf course.
It became within two or three years a course you could play 52 weeks of the year, as we’d get all the water immediately once it comes down, and [now]it plays exceptionally well in the winter.
How quickly did you expand Leaderboard’s range of courses?
The next one was Chart Hills in Kent which was designed by [English pro golfer] Nick Faldo and had been created as a member-only golf course and one of those elite places where only members and their guests can play. Chart Hills is unique and just an amazing golf course and the buildings surrounding it are five-stars. It had been on the market for quite a long time and we had been moving along nicely with Sandford.
You have to make sure you’ve got good staff before you move on though. You can’t leave any business not managed properly because then it’ll start to slip back. My priority in all our branches is to get our number one man as a general manager with all the drive and initiative to take it forward, so I can start to take a step back.
So what’s the ambition with Leaderboard? To make millions?
It is to drive the business of golf and recreate it. If you look around the country, I think you can see the likes of Wentworth and the Sunningdales which are that type of course which will always do fine because they trade on their reputation. We trade on ours and it is growing on a regular basis.
How well is Leaderboard doing these days?
In the first 10 years of trading, Leaderboard’s turnover for the five golf venues – Sandford Springs, Leaderboard Golf Centre, Chart Hills, Dale Hill and The Oxfordshire – has increased by almost 60% from almost £6m to over £9m today.
You say you’re looking to step back from the business – does that mean you want to sell out later?
I think every business is for sale at a point in time. I’ve got no desire to sell and my wife Jennifer has not got a desire to sell, and we enjoy what we’re doing very much.