Today’s newsletter is brought to you from the beautiful city of Burlington, Vermont, where I’m visiting this weekend for a wedding.

Which got me thinking, since today’s letter is on the economics of bowling, do people have bowling-themed weddings? 🎳

Apparently, they do. To each their own, right?

💭 Let’s lace up and see what’s going on in the world of bowling, in just 4 minutes to read.

— Shawn

QUOTE OF THE DAY

“In bowling and in life, if a person made the spares, the strikes would take care of themselves.”

— Stephen King

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It’s what leaders read to stay one step ahead, and to gain market-moving insight into what’s next, of consequence and least understood—before everyone else does.

WHAT ELSE WE’RE INTO

📺 WATCH: Three ways to invest in micro-cap stocks

🎧 LISTEN: Current market conditions, alternative assets, and AI, with David Stein

📖 READ: How Dallas-Forth Worth became America’s boomtown

MAKING BOWLING COOL AGAIN

Bowling renaissance

Bowling. The poor man’s country club, some might say. Perhaps the mere mention of the word jogs old memories of childhood birthday parties, cheap beer, smokey arcades, and retro neon signs.

But what are the economics behind this classic attraction? And how are modern bowling alleys revamping themselves?

For starters, it’s one of America’s most widely played sports: Over 45 million Americans strap on a pair of bowling shoes yearly. However, it’s been in structural decline for decades, with many of the nation’s bowling alleys being pushed out in favor of high-rise condos and office space as real estate prices have risen.

As Zachary Crocket of NPR puts it, “In the 1960s, bowling experienced a golden age.” Some pro bowlers even earned more than NFL stars. But the sport failed to adjust with the times, losing popularity, while bowling alleys’ big footprints in growing urban and suburban areas became increasingly uneconomical.

Flash forward over five decades from its heyday, and bowling league participation is down some 75%, while less than a third of the 12,000 bowling alleys at the sport’s peak remain.

Reviving a sport

For Mike Leong, a lifelong bowling enthusiast, setting up his 24-lane bowling alley, Bel Mateo Bowl, just south of San Francisco, was more than a business pursuit. It was an opportunity to make bowling cool again.

After surveying teens and 20-somethings, he opted to bring the old 1960s-era bowling alley he purchased into the 21st century, updating the restrooms, introducing automatic scoring systems, adding laser lights and fog machines, purchasing a new music system and new carpets, paint, and artwork.

The cost? More than $1 million.

But Leong’s alley is part of a broader industry transformation. According to Devon Stewart, the CEO of Bowl Connect, successful alleys today have “fun music playing, sound effects, projector screens with music videos…a fully interactive and immersive bowling experience.”

The future of bowling

The industry leader in revamping bowling’s old-school reputation is Bowlero. In the past decade, the company has bought up over 300 bowling alleys nationwide, gutting them in favor of neon lights, flatscreen TVs, glow-in-the-dark lanes, arisanal cocktails, and high-end foods like roasted lamb.

Raking in $1 billion+ a year, Bowlero is ringing in a new era for bowling alleys, where bowling is no longer the focal point of the business.

Instead, the focal point is food and drink sales, and building a more diverse entertainment facility, offering things like laser tag, party rooms, mini golf, baseball batting cages, go-karts, and more.

Others aren’t as sold on this vision for bowling alleys. For Leong’s Bel Mateo Bowl, the focus is chiefly on bowling itself. Rather than having fewer lanes and pressuring people to order food and drinks while they wait to play, Leong’s alley derives just 8% of its revenue from its snack bar. And another 20% from drinks.

And the arcade and pro shop are largely subsidized, not generating much income on their own.

Bel Mateo Bowl is a more familiar experience than Bowlero for most bowlers. Still, despite the different approach — bowling-focused versus entertainment & food/drinks focused — it’s clear that bowling alleys everywhere are being revamped, hopeing to restore the sport to its glory days of popularity (and profitability).

After years of decline, bowling alley jobs are climbing back.

Bowling alley economics

Bowling alleys come with unique costs, from broken pins to stolen shoes. At Bel Mateo Bowl, about 15% of each month’s revenues go towards the rent, with another 30% going towards the staff, alongside typical business expenses like its liquor license, utilities, and taxes.

Leong also has lots of bowling balls, around 150, to be precise. Each one costs about $30 wholesales and needs to be replaced every few years. And he’s got about $9,000 invested in pins alone, with each pin costing roughly $18, times 21 pins per machine multiplied by 24 lanes.

Another obvious cost of business: Bowling shoes. Buying in bulk, these cost about $40 a pair, but his inventories need to be refilled three times a year, as many people just walk out with the shoes instead of returning them.

He adds, “That’s one of the problems that comes along with bowling being cool now.”

He also pays for generous liability insurance, which isn’t surprising. You can imagine more than a few people slipping and falling, throwing out their arms, or dropping a ball on someone’s foot.

You might be surprised to hear, though, that oil is a big expense. Leong estimates that he spends about $250 a day on the stuff, using a Roomba-like machine to dispense oil on the lanes several times daily.

On top of that, he employs a full-time mechanic to keep his bowling machines going. Given the hundreds of moving parts, he says it’s “much more difficult than looking under the hood of a car.”

All this contributes to why a round of bowling costs as much as $15 at Bel Mateo Bowl and similar alleys. But if bowling really is cool again, then maybe it’s worth it.

Readers, what do you think? Is bowling a dying sport that’s enjoyed a brief recovery, or will the bowling industry forge a new path toward growth?

Hit reply to this email to share your thoughts.

Dive deeper

For more, check out this podcast from Freakonomics.

READER RESPONSE

Last week we asked readers: What's the best financial advice you’re ever received?

Here are a few responses:

• “If someone offers you something but makes it very urgent, it‘s better to run for the hills.” — Peter, Hannover, Germany
  
  

• "Invest what you can, but don't forget to enjoy the fruits of your labour” — Balemans, Halifax, NS., Canada 
  
  

• “Make money work for you; never work for it.” — Donald, Buckeye, Arizona
  
  

• “You don't have to be the best in class to make great returns.” — Vikas, Tampines, Singapore
  
  

• “Pay yourself first” — Steve, Virginia
  

Want to see your name and response up in lights?

Next week’s question: Leave your response.

See you next time!

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