If one is to tell the story of how Norm Cates helped revolutionize the health club industry, there is only one logical starting point: the 1973 oil embargo.
It was a cooler-than-usual October in North Central Georgia, and Cates was beside himself. A world away, the Yom Kippur War was raging, and OPEC was playing gasoline hardball with the United States. Per-barrel oil prices doubled, tripled and eventually quadrupled. Shockwaves fired off in every direction, even rattling the U.S. airline industry.
Cates, a then-27-year-old Southern Airways pilot, was among 40 new aviators who were handed a 4-year layoff. It was an abrupt ending to a journey that had been years in the making. Aviation is in Cates’ DNA. His father was a B-17 gunner in World War II’s Pacific Theater, and Cates grew up as a proper Air Force brat, bouncing from base to base, city to city. (Or as Cates, ever extroverted, tells it with a laugh: “I never met a stranger.”)
Except Cates was now a stranger to even himself. If he wasn't a pilot, who was he?
A certified public accountant named Ray Irwin held the answer. During Cates’ layoff, the two men met incidentally while waiting for a racquetball court at their Atlanta apartment complex. Irwin was property-savvy and had hatched a business plan to open his own racquetball club in the city. Cates liked the idea. It was the height of U.S. racquetball craze, and Cates needed reliable income. More importantly, he needed a purpose.
In 1976, Cates and his partners—Irwin, Rich Boggs and Fred Streck—launched CourtSouth, a racquetball-club company that was among the first of its kind in the American Southeast. Cates, the once-unlikely club owner-operator, found himself knee-deep in a young but rapidly expanding industry.
Forty-one years later, he remains one of the industry’s greatest patrons, and one of its most influential leaders. For Cates, this year's Club Industry Lifetime Achievement Award recipient, CourtSouth was only the beginning of a long and storied career—one that is intertwined with the maturation of the very industry itself.
A New Calling
The oil crisis came and went, and Southern Airways eventually called Cates back to work. But things had changed. He was now a successful racquetball club operator, whose first facility attracted 5,000 members in its first 90 days of business.
In a pivotal moment, Cates resigned without remorse from his job at Southern Airways (which later became Delta Air Lines).
“It turned out, I had just made up my mind,” he said. “I wanted to stick with what we were creating. I resigned because I thought I could have more enjoyment with [the club business] if I stayed with it. I could have made a quarter-of-a-million dollars [a year] as an airline pilot. But one of the things I learned—money’s not the only thing that life's about.”
With CourtSouth, Cates and his partners felt like they were “steering their own ship.” If they were going to be successful, it would be because they had made the right moves. If they failed, it would be because they hadn’t. These notions of freedom and responsibility took Cates back to his years as an offensive lineman at North Carolina State University, where he was a First Team All-Atlantic Coast Conference and Honorable Mention All-American.
Even though Cates was as an All-New York State football player in high school, he had been told he was physically too small to find success in Division I college football. For the young athlete, this was a challenge, not a deterrent. Cates’ high school coach had taught him that the harder you hit, the better your chance is of winning the game. In other words, sheer intensity and passion will determine your successes or failures—in football and in life. Cates saw the club business in the same light.
“We ended up being successful in the club business,” Cates said. “We made a dent in the marketplace in Atlanta because we created a new product mix that wasn't really there until we got started.”
By today’s standards, the clubs were simple facilities—courts, spas, locker rooms. But for years they served a growing demand and were noteworthy for being among the first of their kind in the country.
“One important thing they did—they licensed the [CourtSouth] name and some systems and expertise so people could create clubs in other areas with background and assistance but without Norm’s team having to be on site full-time,” Rick Caro, president of consulting company Management Vision and longtime friend and associate of Cates, said.
The partners expanded to nine locations before splitting the business in May 1981. The men left club-by-club ownership to fate, electing to draw names from a hat. The upside: Cates drew Lenox, the newest and, rent-wise, cheapest club in the lot, located in Atlanta’s bustling Buckhead district. The downside: The greater racquetball club business was dying.
By the end of the decade, many once-thriving clubs were struggling to attract and retain members. Financially, it was disaster, prompting many clubs to close. (An old, pessimistic industry age went: “Racquetball is easy to learn and easier to forget.”)
Cates, however, was not so willing to wave a white flag.
An Industry Takes Shape
In 1980, Cates was elected president of the National Court Club Association (NCCA), an organization that served racquetball club owners. He also had ties to the National Tennis Association (NTA), of which Rick Caro, a fellow NCCA board member, was president.
The then-fledgling fitness industry lacked the infrastructure it has today—trade shows, media outlets and robust associations. The NCCA and NTA conventions and trade shows were among the only forums in which club owners and operators could gather and exchange ideas. It was a beautiful thing, Cates said. Strategies were fleshed out. Trials were scrutinized, and triumphs were celebrated. Most importantly, the best ideas floated; the weakest sank.
The meetings helped birth the multi-use club concept—a remedy to Cates’ problems in Atlanta where his club had 16 courts. It was a simple but progressive idea—converting courts into exercise spaces—which many NTA clubs had already begun to implement.
“I ended up hiring a crew, and we got in there and tore down 12 racquetball courts with me personally swinging the sledge hammer every y for two weeks and with my team of workers hauling the busted cinder block walls out piece by piece in buckets." Cates said. "Three weeks later, we were converting those 12 former racquetball courts into aerobics studios, an expanded Nautilus space and free weight rooms. I also put in 30 Lifecycles and 30 more Lifecycles in my Downtown Athletic Club.”
Cates knew better than anyone that operating a club could, at times, feel like living on an island. Although he was quickly realizing that formalized associations could not only support club solutions, but could also create a real community of like-minded entrepreneurs.
That year, 1980, Cates announced to the NCCA membership his goal to double the association’s club membership from 400 clubs to 800 clubs by the end of his term. It was an ambitious endeavor that caught the attention of Caro.
Caro was concerned that neither the NCCA nor the NTA were reporting strong membership growth. The boards’ efforts were also becoming redundant. So he approached Cates with the idea to merge both groups into a single association that would also serve the growing number of non-court club operators.
At least four nights a week for a stretch of six months, Cates and Caro discussed this dream association over the phone. With Johnny Carson playing quietly in the background, they would talk logistics, memberships and big-picture goals.
Caro organized an exploratory meeting in Chicago in late 1980, where Cates introduced their concept to five key industry players: Todd Pulis, Peter Donahue, Jennifer Michell Wayt, the now-late Curt Beusman and the now-late Dale Dibble. Everyone was in agreement.
Weeks later, the seven colleagues met at Caro’s New York City office, where they named and christened the new group: the International Racquet Sports Association, or IRSA. (An “H” for Health was added to the acronym in 1994, making it the International Health, Racquet and Sportsclub Association.) On the spot, the founders wrote bylaws, outlined the first trade show and strategized how they would formally wind-down and combine elements of the two existing associations.
The pillars of IRSA were as follows: to provide education for club operators, to support club memberships worldwide, to support regional associations and to produce a trade show. These had been the basic tenets of all of those late-night conversations.
Early on, the "IRSA Seven" also tapped John McCarthy as executive director and Chuck Leve as director of associate members.
Most symbolically, the group elected Cates to be IRSA’s first president, serving for the 1981-1982 fiscal year. In theory, it provided organizational continuity. The ex-Air Force brat had become a familiar face and name to many. Cates is gregarious by nature, never hesitant to walk right up, shake a hand and say hello. (“I don’t make friends; I make life relationships,” Cates said.) This quality made him an effective club operator and a respected association leader.
“Norm always worked well with partners,” Caro said. “Some people are classic individual entrepreneurs, but Norm was always comfortable in a cooperative environment, one where he worked with others. He was always a committed guy. That may come from team sports.
“More importantly, he’s someone who once he gets down a path, that’s the path,” Caro continued. “There’s no alternative. He’s so committed he’s going to find a way to put a flashlight through a tunnel and hopefully find the end. There is no obstacle he won’t overcome once he's down the path. … Following through, meeting deadlines, finding ways to succeed when ad dollars were limited—this drives him further down the path.”
Shifting Responsibilities
By 1993, Cates was stretched thin. Not only was he still involved with his clubs and associations, but he now had a young son, Justin, and he and his wife, Ilena, were opening an antique store in Roswell, a suburb of Atlanta. After much deliberation, Cates devised a plan to combine the two most important aspects of his life by starting the industry publication Club Insider.
The monthly tabloid was Cates’ solution. He could work from home and spend quality time with Justin, while still serving the fitness industry with the business-to-business-style publication.
Cates shipped 2,500 copies of the 12-page inaugural issue to the 1993 Club Industry Show, where he estimates he gave away 2,300.
“All we wanted to do was help everybody in our industry, both sides of the bunch, do better,” Cates said of Club Insider, which has since published 284 issues in 24 years. “It’s the theme of my life—football, U.S. Air Force jet instructor pilot, airline pilot. Everything has gone back to the need of working hard to get better.”
Club Insider is not an ordinary journal. It’s true to its name. The voice and style reflect the man behind the pages. Cates writes to the reader as if they’re “sitting together in a bar drinking a sarsaparilla,” he said.
One of the monthly’s staples is a column titled “Norm’s Notes,” where Cates calls the good, the bad and the ugly as he sees it. He regularly uses the platform to spotlight unsung heroes in the industry.
“He’s exactly who he says he is,” Caro said. “No filter. He wears his heart on his sleeve. And he’s not been afraid to take hard stances where he felt others had hurt the industry. His publication is aimed at the little guy.”
The fitness industry aside, Club Insider proved to be more than a stay-at-home-dad job. It turned into a bonafide father-son business. Since the 1990s, Justin has graduated from envelope-stuffer to president and assistant publisher. He even outlined the future of Club Insider’s business model in his 2007 University of Georgia business college senior thesis project.
"Justin is the finest partner and son any father could possibly hope for,” Cates said, “and he, too, has been making Club Insider better and better and better."
The publication and the industry it covers have been integral parts of Justin’s life for as long as his memory serves. He can recall spending early mornings in his d’s clubs, drying and folding towels and making sure the pools’ chlorination levels were just right. He remembers playing with LEGOs while his dad, seated nearby, pecked away at the next issue of Club Insider.
“You can have all the passion in the world, but if you don’t have the focus to execute it, it doesn’t come to fruition,” Justin said. “[When I was a kid], we focused on vocabulary every week. I would have 25 words, and my dad would have me sit on the couch and recite every definition and word spelling over and over.”
“You [have] to have focus and a hard work ethic,” Justin said, “and if anybody knows that it’s my dad, no matter what he’s doing.”
Lifetime Achievement
Despite having fallen into the fitness industry by pure chance, Cates’ passion for his work is boundless. When asked to speak about his career, he is overcome with emotion. Cates describes it as a “true love story,” and one that is far from over.
“My love for this industry comes across every time [an associate] is with me,” Cates said. “It’s a relationship thing, and I don’t know how to put it into words. There are people in our industry—if you need help, and I’ve got to get in my car and drive nine or 10 hours to get there, I’m going to be there the next day.”
If Cates’ reputation doesn’t precede him, Justin said you can learn everything about the man by watching him walk across a trade show floor. (Cates’ signature cowboy hat gives him away in any crowd.)
“He can’t go 10 feet without being stopped,” Justin said. “Everyone wants to greet him and shake his hand, and he has something nice to say to them all. He's one of the kindest and most charitable people I know, and he’s not making millions of dollars doing what he does. Simply because of his passion, he truly has made a difference for clubs and the communities they’re serving.”
“He’s a big old teddy bear at the end of the day,” Justin said.
Caro said Cates, at his core, is a people person. It shows in Cates’ great attention to the little things, such as customer service and employee training. He loves connecting with others and laying down roots, Caro said, perhaps because he was constantly moving as a kid. It was a hectic lifestyle, but it also helped him develop socially and emotionally in ways few people do.
“Norm always wanted to be grounded, and he has found that in our industry,” Caro said. “He’s lived in the same house for 20-plus years now. He has his exercise routine. He goes for routine walks by the river. Norm has a very established concept of how to organize a life.”
Cates' humility and hustle harken back to his first job as a newspaper delivery boy in the ninth grade. If earning a paycheck meant waking up at 5 a.m. and hopping on a motor scooter, that’s exactly what he would demand of himself.
“I never had a moment when I thought I was not going to flat-out succeed,” Cates said. “I’ve lived my life that way. I also attribute it to my experiences in football. You've got a choice: You’re going to get your ass whooped, or you’re going to whoop ass. Unfortunately, that's how life is. But the choice is up to you.”
Cates remains energized by the continued growth and diversification of the health and health club industry. At the same time, he is wary of the many challenges its practitioners face, especially for independent club operators, who must navigate in a world saturated with studios and chain health clubs.
In the 1970s and 1980s, independent club owners were more of the driving force in the industry than they are today, Cates said. Independent club operators, who often are married couples, put their entire lives on the line with their club business, working hard to make it as good as it can be. But, he admitted, whether a club is independently owned or not, its operators must have a rock-solid fountion in customer service if they are to succeed in the long term.
Cates learned some of his greatest lessons from former Mr. America bodybuilder and independent health club owner Red Lerille (the recipient of the 2011 Club Industry Lifetime Achievement Award), who always emphasized customer-service basics. Say “hi” and “bye.” Commit members’ names to memory. To club operators, Cates asks: “Are you relationship people or numbers people?”
Cates credits part of his entrepreneurial spirit to Caro, whom he often calls “the industry’s best friend.”
“I invite you to try to find anybody who could reach the threshold of having helped as many people as Rick Caro has helped,” Cates said.
Though he is reluctant to admit as much, Cates has also helped many club operators through his advocacy with IHRSA and his examination of the industry with Club Insider.
“After they put me in a vase and I’ve gone to the Promised Land, I want to be known as a person who truly gave a serious hoot and as a person whose passion on this earth was to help people in this industry get better,” Cates said. “Because that’s it. Period. I'm not trying to fool anybody.”