Tuesday, August 13, 2013

Maybe the Richest Deal Ever Made on a Golf Course

It's probably impossible to prove, but it's entirely likely that a deal spawned at St. Andrew's GC in Hastings may have been the largest ever struck on a golf course. I ran across this interesting tidbit in American Colosus: The Triumph of Capitalism 1865-1900 by H.W. Brands. The club, which celebrated its 125th anniversary this year, played an essential role in the sale of member Andrew Carnegie's steel interests to J.P. Morgan and others in 1901.

The deal was a perfect example of the role golf can play in business--not to mention the value of scoring judiciously when playing against your boss.

Andrew Carnegie playing at St. Andrew’s circa 1899. He enjoyed the game so much, he built a home next to the course // Photograph courtesy of Westchester County Historical Society
Carnegie Steel President Charles M. Schwab was the hero of the piece. Morgan had made it known he and his partners wanted to buy out Carnegie so they could monopolize the steel industry. Schwab saw the value of the deal (he subsequently became President of the company it created, U.S. Steel) but the ultimate decision was Carnegie's, who wasn't particularly interested in selling. His wife, Louise, though, wanted him to retire. Here's how Brands described what happened:
"Louise Carnegie conspired with Schwab against her husband. Shortly after Schwab informed her of the merger scheme, she telephoned to say that Carnegie would be playing golf the next morning at St. Andrew's club in Westchester. He was always more cooperative after winning at the Scottish national sport, she suggested. Schwab took the hint, whiffed a few for the cause, and broached the subject of selling. Carnegie didn't reject the plan outright, which Schwab took to be a good sign."
It was. The next morning, Carnegie named his price--$480 million. Morgan accepted it and a few days later closed the deal personally. As he shook Carnegie's hand, he said, "Mr. Carnegie, I want to congratulate you on being the richest man in the world."

At that point in time, it probably wasn't an exaggeration. The deal would be worth about $13 billion in today's dollars. That has to make it one of the biggest ever born on a golf course.

Among many other books, Dave Donelson is the author of Weird Golf: 18 tales of fantastic, horrific, scientifically impossible, and morally reprehensible golf

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