Private Equity–Backed Firm Bowlero Is Ruining Bowling
61 points
4 days ago
| 17 comments
| jacobin.com
| HN
model-15-DAV
4 days ago
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How has private equity become such a strong force today? They are eating the world it seems. Blamed for strangling stable chain-restaurants[1], shuttering toy stores[2], and now ruining bowling!

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-...

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onion2k
4 days ago
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VCs all read Peter Thiel's book 'Zero to One' and embraced the idea of owning a monopoly. Rather than starting a business that grows and outperforms all the competitors, they're just leveraging massive sums of money to buy all the competitors to create one instead.
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keiferski
4 days ago
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That’s a pretty uncharitable interpretation of the book’s main idea, which is better stated that you should seek to invent something entirely new that is a defacto monopoly, rather than engage in competition with others doing the same (old) thing. His background in the hyper competitive world of law was the key connection point toward that realization. Basically, he says that ambitious people often end up competing against each other in law/consulting/finance etc. but they should invent something new instead.
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SJC_Hacker
3 days ago
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Yeah but lawyers/consultants/financiers still make bank
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toss1
4 days ago
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US politicians stopped valuing actual capitalism and stopped supporting anti-trust actions, accelerated by the SCOTUS Citizens United decision essentially equating money to free speech and allowing effectively unlimited corporate political donations.

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.

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cameldrv
4 days ago
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Because antitrust laws are no longer enforced, so you’re allowed to create monopolies and jack up prices/cut service, and the government will no longer stop you.
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throwaway-blaze
4 days ago
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Actually it's because antitrust laws are stretched to the point that big acquisitions are no longer likely to win approval, so "alternative" exits are the only option.

Not to mention that until interest rates rose a few years ago, these PE acquisitions could be funded with cheap borrowed money.

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rs999gti
4 days ago
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Shouldn't you focus on the firms selling to PE's instead?

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.

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stackskipton
4 days ago
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>Shouldn't you focus on the firms selling to PE's instead?

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.

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kentlyons
4 days ago
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And for small businesses, there is a massive wave of boomers retiring. Either they sell or go out of business. For the better ones, PE is buying and rolling them up.
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stevenae
4 days ago
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It is illegal, as a fiduciary (owner or director of a business), to not take a financially expedient deal (of course someone would need standing, ie as an investor, to sue). It is often seen as immoral to refuse one which would benefit, eg, friends or family who have invested.
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danaris
4 days ago
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This is not true.

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.

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stevenae
4 days ago
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Thank you for the info. I am curious: is there a corollary, by which minority owners could sue majority ones, for lost profit? I suppose the key caveat to my argument earlier is that one must have standing to sue: if owners disagree (board decisions need not be unanimous), is there valid standing to sue.
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jogjayr
4 days ago
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If there is, then wouldn't there also be a corollary that allows minority owners to sue for not focusing on <whatever they care about>?
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stevenae
4 days ago
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Are you referring to the idea of "everything is securities fraud"?
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CryptoBanker
4 days ago
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That’s a pretty big over dramatization. You are assuming the company would not be able to operate and provide value to its investors without said deal.
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stevenae
4 days ago
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There is a discussion happening below regarding actual law. I would guess in a court, the argument could be reversed: one cannot assume there would be more profit without the deal, absent evidence.
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SJC_Hacker
3 days ago
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This only applies to public companies. Private enterprises can do whatever they want (within the law of course, and assuming they have majority interest)

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.

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kgwgk
4 days ago
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> as a fiduciary (owner or director of a business)

An owner has a fiduciary duty to himself and a director is not the one who sells in the end: owners do.

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stevenae
4 days ago
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Sorry, by director I meant board. Eg, one empowered to make such a decision, which a disagreeing minority stakeholder might sue over.
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etc-hosts
4 days ago
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Reminds me of the numerous lawsuits filed against Maxxam for dramatically increasing harvesting of redwood forests in Northern California.

https://www.latimes.com/archives/la-xpm-1997-dec-03-fi-59990...

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matthewdgreen
4 days ago
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Or alternatively is PE identifying and enshittifying businesses that have (1) lots of dedicated customers who are path-dependent and unlikely to switch (e.g., older folks), and (2) perform essential services that have low (short term) elasticity, like emergency veterinarians. This seems like the smart move if you want to extract profit from society without providing much value in return.

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...

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dpflan
4 days ago
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I too was curious, received some useful discussion here: https://news.ycombinator.com/item?id=40343284
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NoboruWataya
4 days ago
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That kind of value extraction can be very good for investors, so they give PE firms lots of money to deploy, and the PE firms then throw that money at the business owners who find it hard to resist. I suspect that's how.

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).

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graybeardhacker
4 days ago
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It's another example of enshittification. 1. Find something that makes money and has "inefficiencies" 2. Buy a controlling share 3. Make it more "efficient"*

*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.

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deepfriedchokes
3 days ago
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Seems like the inevitable outcome of late stage capitalism with a lot of capital concentration and diminishing places to deploy it.

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.

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392
4 days ago
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I recently visited the national bowling hall of fame in Reno. On the bottom floor there's a consumer grade bowling alley.

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.

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evanelias
3 days ago
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> We couldn't figure out how to change our names from "Player 1". Tapping the name did nothing.

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/

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SJC_Hacker
3 days ago
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Mobile-first explains quite a bit.

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!

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facialwipe
3 days ago
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What happened to computing? Are we the only industry whose output quality seems to go backwards every year?

Enshittification is coming for everything.

https://en.wikipedia.org/wiki/Enshittification

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bnchrch
4 days ago
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PE Rollups is a plague that has been spreading for decades.

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.

[0] https://www.ncbi.nlm.nih.gov/pmc/articles/PMC10421543/

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busterarm
4 days ago
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I work with a former veterinarian and have discussed this topic at length.

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.

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PaulHoule
4 days ago
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I see vet service prices have skyrocketed.

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.

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snapetom
4 days ago
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Married to a current vet and you’re right. The clients are the worst. People are shit.

Suicide is a huge problem in the field. My wife’s class of slightly over 100 has had two suicides.

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whartung
4 days ago
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That's just a shame. We love our vet. Utmost respect for him and his folks. He's been with us through some of the worst times. We've had him for 20 years.

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.

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prirun
4 days ago
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To put that into perspective:

"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.

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whalesalad
4 days ago
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Had to do a double take. There’s an epic mom and pop bowling alley in town called Bowlero that’s completely unrelated to this. Just noticed their website explicitly states this in the footer.

https://bowlerodetroit.com/

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flyinghamster
4 days ago
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That reminds me of the Burger King restaurant in Mattoon, IL. They had filed for a state trademark, only for the chain to come along with a federal trademark. The settlement ended up with them getting the rights to the name within a 20-mile radius of Mattoon.

https://en.wikipedia.org/wiki/Burger_King_(Mattoon,_Illinois...

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busterarm
4 days ago
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The whole reading this was in my head: https://www.youtube.com/watch?v=VoLJSmvsbs8
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scblock
4 days ago
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I bowl in a league and have for years. We used to bowl at a Brunswick Zone which wasn't awesome but had good lanes and a lot of leagues. Now it's a Bowlero and it's complete garbage. They don't seem to maintain their lanes at all, it seems totally focused on expensive drinks and poor service.

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.

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bkohlmann
4 days ago
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If there is that much demand for a more traditional bowling experience, it seems like one of the bowlers complaining about the "new" experience should open an alternative. And will make a killing.
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stackskipton
4 days ago
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It's extremely capital-intensive business so you need to get loans/investment and banks/investors are rightfully going to ask "What's stopping Bowlero from price crushing you?" and your answer is going to be "Nothing."

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.

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quercusa
4 days ago
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Here's your warning:

Bowlero stock has been dramatically boosted by investment personality Jim Cramer, who has gushed over the company — “You can’t go wrong with Bowlero!”

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davidu
4 days ago
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I don't know if this article is true but many assertions are untrue. The bowlero stock is pretty level and up from when it went public. It never made it past $17 from the $10 opening (SPAC probably?). So I have no idea what this author is talking about when he says it's been a wild ride.
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burkaman
4 days ago
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Has it been edited? I don't see anything in the article about a volatile stock or a "wild ride".
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busterarm
4 days ago
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It's Jacobin. Capitalism has shaky underpinnings and is only to the detriment of society at that publication.

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.

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MuffinFlavored
4 days ago
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> SPAC stands for Special Purpose Acquisition Company
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micromacrofoot
4 days ago
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Is bowling not already ruined? Private equity trying to turning bowling alleys into expensive bars is one thing, but it seems that the current model of bowling alleys has already failed... nearly all the bowling alleys I've visited in the past decade are the most dismal poorly-maintained decrepit places around.

In my experience private equity is a symptom, not the cause, they're the vultures picking the corpse...

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realce
4 days ago
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No point to it, but your comment reminded me of this podcast episode: https://www.youtube.com/watch?v=qnzfABpPHyI

Bowling Alleys | The Economics of Everyday Things

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FredPret
4 days ago
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I distrust sources that wouldn't publish the opposite conclusion given different evidence.

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].

[0] https://valustox.com/BOWL

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psunavy03
4 days ago
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It's Jacobin - of course they wouldn't. Jacobin is to the left as sites like The Federalist or One America News Network are to the right.
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drekk
4 days ago
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Thankfully reality has a well known left-wing bias, so Jacobin doesn't need to worry about that hypothetical.

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.

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FredPret
4 days ago
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Ah yes, the well known phenomenon that reality comfortingly aligns with our exact political opinions and not that of those pesky idiots on the other side of the aisle. Totally rational and bound to be true.
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hnburnsy
4 days ago
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I am confused, Bowlero is public traded, not a private equity company. Looks like PE bought it in 2017, then went public via SPAC in 2021. I'd bet that most PE got out at the IPO, and retail shareholders will end up being the losers here.

So PE can't take all the blame or the continuing blame.. The bankruptcy of AMF and Brunswick was a large catalyst.

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avalys
4 days ago
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I know next to nothing about bowling, but it sounds like without Bowlero it would be nearly dead.
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ThrowawayTestr
4 days ago
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Of all the things I thought PE would monopolize I wouldn't have bet on bowling alleys.
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api_or_ipa
4 days ago
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Bowling has been in a long decline. If I had money to get into the PE game, I probably wouldn't choose to invest in bowling, but hey, if someone wants to shovel a bunch of investor money into renovating bowling alleys, that can only be a good thing. The way I see it, there's two likely outcomes:

- 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.

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ndiddy
4 days ago
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One of the main points the article makes is that Bowlero spends the "ton of money" on superfluous additions (giant TVs, bars selling expensive drinks, etc) while forcing centers to operate with skeleton crews and cutting back on necessary maintenance. Bathrooms go days without being cleaned, there's no mechanics on staff to fix lanes that break down, and yet they keep raising prices. To me this doesn't seem like a good thing for the bowling community.
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throwaway98797
4 days ago
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nothing constant

evolve or die is the harsh reality of capitalism

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rahimnathwani
4 days ago
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It seems like this company has found a bunch of businesses whose model is outdated and cannot survive, and found a way to align the services to appeal to a broader audience. The alternative is probably not a return to the good old days, but the closure of all bowling alleys.
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snapetom
4 days ago
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Sounds like they found and interviewed a bunch of bowling gatekeepers - the type who would get on you for not doing something “the right way.”
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richwater
4 days ago
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1) Jacobin is a rag, not a real news source and greatly exaggerates almost every topic they cover.

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.

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dbspin
4 days ago
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> If customers actually wanted true, simple bowling and not "upscale entertainment", there would be businesses to fill the void.

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.

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drekk
4 days ago
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The pandemic complicated things greatly for physical businesses. Bowlero started buying up during the pandemic when these businesses had no alternatives. And throwing up some flat screens while cutting hours and removing janitors isn't renovating "dark, dingy, non-updated/maintained" locations.
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busterarm
4 days ago
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Very true...although duckpin bowling had a bit of a revival in the early 2010s.
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