Michael S. Levy
Michael S. Levy has taught, and learned, valuable lessons during his tenure as IHRSA’s chairperson
By Jennifer H. McInerney
Q&A Highlights* Industry initiation The chairperson of IHRSA’s board of directors, Michael Levy, 62, is perhaps best known as the founder and former CEO of the Sports Clubs of Canada (SCC), a chain of 10 multipurpose clubs in the Toronto area. He held that post from 1973-1999, when he sold the company to Bally Total Fitness (NYSE: BFT) and became the president of BTF Canada; he served in that capacity until 2003. In 2005, he became the executive director of Spa Chakra Fitness, a worldwide spa and fitness company, based in New York City. He’s also the president of Casaral, Inc., a private equity firm based in Toronto. A chartered accountant, Levy holds an MBA in finance and a bachelor’s degree in economics from the University of Toronto. |
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| CBI: | You didn’t come up through the club ranks—you basically have a financial background. What lured you into the fitness industry? |
| Michael S. Levy: | In the 1970s, when I was running my own accounting and consulting practice, I read a book called Future Shock, which attempted to describe what the world of business would look like, be like, by the end of the millennium. The author, Alvin Toffler, predicted, among other things, that sports and recreation would become a huge growth industry, because people would have a lot more leisure time then. One day, I mentioned to a business associate that I had a real interest in this area—that it was something I’d love to do. And he just happened to have a client who was intrigued by my idea. So that’s how it all got started! |
| CBI: | You’ve achieved a great deal since then—notably, founding and operating the Sports Clubs of Canada, which was subsequently purchased by Bally Total Fitness. What’s kept you active in the industry for so long? |
| Michael S. Levy: | Why have I stayed with it? Simply because I happen to think it’s the best business in the world! I think we’re incredibly lucky to be able to work in this industry. We’re able to do good things for people, helping them to improve the quality of their own lives. And, if we’re good at delivering our services, we can succeed financially beyond our dreams. |
| CBI: | You’ve also been involved with IHRSA in a leadership capacity for quite a while now. What prompted you to assume such significant responsibilities? |
| Michael S. Levy: | When Bally joined IHRSA, John McCarthy, who was then the association’s executive director, called Lee Hillman, who was then the CEO of Bally, and asked whether he was willing to have one of the chain’s senior executives sit on IHRSA’s board. Lee thought that I’d be the best person. When the possibility was presented to me, I was honored. I was grateful for the opportunity to give something back to the business that had allowed me to achieve my own goals and dreams. |
| CBI: | You’re now nearing the end of your tenure as the chairperson of IHRSA’s board of directors. Has the experience changed your perspective on the industry? |
| Michael S. Levy: | Absolutely! Believe me, my entire perspective has changed. When you become chairperson, you quickly become aware of all of the constituencies, and the disparate interests, that make up our industry. When you’re just running your own company, you’re largely oblivious to them. But, as chairperson, you become acutely aware of the unique roles and interests of independent clubs, chains, international operations, equipment manufacturers, other suppliers, and, of course, IHRSA itself. Suddenly, you find that you have to consider, and address, the needs of all of these different groups.
Another unexpected insight is that we’re not all on the same page. I find it surprising, for instance, how little involvement most clubs want to have in legislative and public-policy issues—until, that is, those issues begin affecting their business. |
| CBI: | Any other revelations? |
| Michael S. Levy: | I also came to understand, even more clearly, that this is now a worldwide industry, and it’s important for IHRSA be a major participant, a principal player, in it. The issues that affect IHRSA and clubs in the U.S. are the same ones that affect developers and operators in Latin America, South America, Europe, the Mideast, India, Russia, China, Japan, New Zealand, Australia—everywhere there are fitness facilities. The needs, objectives, and dreams of our members, worldwide, have to be served, and that’s not easy. When you’re running a single club in Boise, Idaho, you may not have to be concerned about developments in Beijing, but, as the chairperson of IHRSA, you have to be. |
| CBI: | We’ve noticed that you’ve made a point of attending many of IHRSA’s international meetings. What sort of takeaway have you come back with? |
| Michael S. Levy: | I’ve been particularly impressed by how similar clubs are throughout the world—we all seem to want pretty much the same things—and by the fact that the industry seems to be evolving, developing, and growing in much the same way, no matter where you are. I’ve also become keenly aware of how much of a contribution IHRSA can make to the growth of clubs worldwide. |
| CBI: | Based on what you’ve learned at those meetings, what sort of international objectives do you think IHRSA should have? |
| Michael S. Levy: | I honestly believe that IHRSA has an opportunity to lead and guide the entire fitness industry. I think our core objective should be to build an international association that encompasses every region, every area, of the world. Over time, it should become the umbrella organization that represents—works with, serves, and speaks for—all of the other industry-related associations. I can’t tell you, right now, how we could do that; it’s clearly not a short-term objective, but I think it’s something that we could accomplish over, say, the next five years. |
| CBI: | IHRSA has developed a sophisticated public-policy strategy and advocacy effort in the U.S. Has it done very much along those lines internationally? |
| Michael S. Levy: | No, but, at this stage, I don’t know that we can—we really don’t have the resources to pursue that ambitious an agenda right now. What we can do, however, is help the indigenous associations in other countries by showing them what we’ve done in the U.S., sharing the tools that we’ve utilized, and offering them advice and guidance as they get their own programs going. |
| CBI: | Taking a retrospective look backwards—what do you think were the most important industry trends of the past year? |
| Michael S. Levy: | I’ve been particularly impressed by two things: Public policy has become incredibly important, virtually overnight. And the international aspect, the global component, of the industry is growing by leaps and bounds. |
| CBI: | And looking forward, what do you expect to see in terms of major developments? |
| Michael S. Levy: | Three things. One: I think programming for families and kids is proliferating and becoming much more important; everybody I talk to is doing something along those lines. Two: we’re seeing a distinct change in the way that clubs are growing. What we’d expected to see was increased industry consolidation, but what we’re actually seeing is club groups growing strategically. They pose something of a threat to small and independent facilities, which is an issue that we’re going to have to examine closely. How do you protect and grow the small clubs without impeding the growth patterns of the larger chains? IHRSA has to represent the interests of all sorts of clubs. And three—and this is, perhaps, the most important—our industry is actually being forced to become the “healthcare solution” for the United States. |
| CBI: | That is a seminal development. It’s been made most obvious, perhaps, by the obesity crisis that the U.S., and, increasingly, the world are facing. How could IHRSA clubs be more effective in addressing this particular problem? |
| Michael S. Levy: | I think the U.S. is heading toward a medical crisis, and, in fact, the whole world is, too, because of two major issues: the drug companies exert an inordinate amount of control over the direction of health and fitness; and, each year, more and more children are being left without a fitness component in their lives.
I think the single best way to address these issues is to reach the kids. You’ve got to access and educate the next generation—it’s the only solution, and our industry has to lead the way. Who has better programs than we do? We could, and should, be conducting fitness classes in schools. Think how much fun it would be for children if they could take part in dance, or group-cycling, or belly-dancing sessions! I firmly believe that there isn’t a club operator around who wouldn’t devote time and effort, in their local community, to help develop such programs. There’s no better motivator in the world than self-interest, and it’s in every operator’s best interest that kids be active and healthy—they’re our next generation of members! |
Levy’s To-Do List
When Michael Levy was asked to serve as the chairperson of IHRSA’s board of directors, he thought long and hard about the contributions that he wanted to make—to the association and the industry—during his tenure.
“There were three things I wanted to accomplish, and I didn’t have much time to achieve them,” he acknowledges. But Levy got to work quickly, and, looking back, feels that he’s made significant progress.
The first order of business, as far as he was concerned, was to help identify, elect, and hire a new CEO for IHRSA, following the retirement of the founding executive director, John McCarthy. “We needed to do whatever it took,” says Levy. “I really believed that we had found, by good fortune, the perfect candidate in Joe Moore, who’d built a successful club company and been closely involved with IHRSA for years.
“We needed a consensus-builder, someone who knew the clubs, the vendors, the industry, the players, and, ideally, the board . . . someone who was focused and forceful, but with a reassuring, laid-back management style,” he explains. “I was convinced that Joe was absolutely the right person to head up the association for the foreseeable future—that, with his help, IHRSA would continue to grow and prosper.
“As chairperson, it was my responsibility to make that happen.”
The second item on Levy’s agenda had two facets: to revitalize public policy by developing long-term strategies and goals; and to improve communication with the Industry Leadership Council (ILC), which helps fund and promote the industry’s public-policy agenda.
“I asked Lloyd Gainsboro to assume responsibility as the chair of IHRSA’s public-policy committee, and Bahram Akradi to serve in the same capacity with the ILC,” recounts Levy, “and they’re both doing a terrific job!” Gainsboro is the president of the Dedham Health and Athletic Complex in Dedham, Massachusetts, and Akradi the founder and CEO of Life Time Fitness, Inc. (NYSE: LTM), based in Eden Prairie, Minnesota.
“We’ve also hired a new public-policy firm in Washington, D.C., and established a new fundraising arm, which I’ve been asked to chair, to raise money for the ILC,” he continues. “Our goal is to increase the amount raised from $960,000 last year to $2 million this year, and to $3 million next year.”
Levy’s third action item is a long-range one that involves transforming IHRSA into an international force. “I firmly believe that the association can grow exponentially,” he insists. “I think that, conceivably, it could go from being the $16-million-a-year organization it is today to a $50-$100-million entity, and, in the process, become the leading fitness organization in the world.
“We have the skills, the knowledge, and the teaching ability,” he says, “and we understand how fitness works from every perspective—that of the club, the member, the vendor, the media, the insurers, the government . . . We can help people to live better, more productive lives. We’re a big part of the solution to the nation’s healthcare crisis.”
Jennifer McInerney is the editor of CBI and can be reached at j.mcinerney@fit-etc.com.
This article is reprinted with permission from Club Business International (www.ihrsa.org/cbi).
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