By Mark Seal

One by one, the suitors flew into the Monterey Peninsula in their private jets, and rental carloads of suits descended upon the Pebble Beach training facility in nearby Pacific Grove, a site chosen for discretion. Of more than a dozen suitors, Taiheiyo agreed to entertain four: Robert Dedman's Club Corporation (owner of Pinehurst and The Homestead), KSL (the golf division of Kohlberg Kravis Roberts & Co.), Marriott Corporation, and Peter Ueberroth's Contrarian Group. (Marvin Davis is believed to have made a bid below the $800 million benchmark price.) Marriott's representatives, apparently deciding against the benchmark, never showed up for the presentation, narrowing the final field to three. Senior management made presentations to each suitor, who then made bids directly to Taiheiyo Club's chiefs in Japan.

Sitting in the Contrarian Group offices in an Orange County business district, Ueberroth is laid-back California cordial. But when his two prized border collies lounging beside his desk snap to attention at the sound of his voice, you get the sense of Ueberroth as a field marshal. Ueberroth's Contrarian Group seeks out businesses to buy for long-term holds, like Doubletree Hotels, which Ueberroth and his partner Dick Ferris began seven years ago with 15 hotels and grew into a 1,400-hotel giant, before selling out last year to Hilton.

Contrarian's name fits. They're not turnaround specialists; they don't even believe in the auction process. Once Contrarian discovers an asset to which they can add value, an offer is made--and it's usually take it or leave it. Ueberroth doesn't believe in bidding wars. This strategy would play to his advantage. Looking over the landscape of potential bidders, Taiheiyo certainly wouldn't find many without an exit strategy. Backed by pension or capital funds from several sources, the conventional bidder would treat Pebble Beach as any other investment: get in with high aspirations, get out when circumstances warrant, pocket the profits and move on.

Pebble Beach was perfect for Contrarian: an underutilized asset with plenty of room to grow. But to win it, Ueberroth would have to assemble a team, not merely with money but with integrity: a contingent whose very names would prove to the Japanese that they would be the best possible successor. If Ueberroth could create a team without an exit strategy, a team not merely dedicated for the long haul, but one that could prove to Taiheiyo that it was ready to take on Pebble forever... well, then, that would certainly sway them.

"The first call was to Bill Perocchi," he remembers.

Perocchi had blasted up the ranks of General Electric like a silver bullet, to eventually become, at 38, CFO of Promus Hotel Corp., increasing market capitalization from $250 million to $4 billion. (Ueberroth and Ferris were major shareholders of Promus, the successor corporation to Doubletree and Guest Quarters.) After a job well done, Perocchi was planning to take take a few years off with his family in Paradise Valley, Ariz., to work on his golf game, when Ueberroth called in March 1999 and asked him to help assemble a team to buy Pebble Beach. "I almost fell off my chair," says Perocchi, now CEO of Pebble Beach Company. The next day, he was on a plane to Los Angeles, with a hard week ahead before meeting with the Pebble Beach management team.

Next call? Dick Ferris, former CEO of United Airlines, Ueberroth's partner in Doubletree, whom Ueberroth calls "the No. 1 hotel man in America. He's also chairman of the PGA Tour Policy Board, so he's embedded in golf, and one of his best friends is Arnold Palmer."

Ferris called Palmer and "15 minutes later," says Ueberroth, Palmer had joined the team.

The threesome of front men needed to be a foursome, ideally adding "someone entrenched in Monterey County," says Ueberroth, and who could be better than Clint, as he's been locally known from his days as mayor of Carmel. Eastwood is a golf fanatic, to the point that he has opened his own Carmel private golf club, Tehama, which shares its name with Clint's requisite clothing line. On his way back from the desert one day, Ueberroth stopped by Eastwood's Southern California hacienda and laid out his plan. Not only did Eastwood know Ueberroth, Ferris and Palmer, he'd played golf with each of them. "And Pete sponsored me at Bel Air," says Eastwood. "I wasn't his sponsor at Cypress Point, but I was certainly one of his local supporters. Dick Ferris I've played golf with and I know from around. And Arnold I've played golf with... so it's a great group." Before Ueberroth could get the words out of his mouth--"This may or may not work out, but there seems to be some interest in some quarters"--"Mr. Go Ahead," as the Japanese call Eastwood in homage to his famous line, "Go ahead, make my day," said, "Fine, count me in."

The four partners split up what's believed to be $100 million of the $820 million price, although they won't break down who paid what. It's been rumored that Palmer and Eastwood paid little--or nothing--due to the currency of their names. But Eastwood says no. "Oh, sure, we all put in dough," he says. Still, they were a long way off from the $820 million mark. So Ueberroth's next call was to the GE Pension Fund, which has been involved in Ueberroth's business deals since he left baseball, and GE signed up for even bigger dough.

When Ueberroth, Perocchi and their accountants, attorneys and Bank of America bankers made their presentation to Taiheiyo--Clint, Arnold and their commitment to a long-term hold --the reaction was a home run. Ueberroth and Co. submitted their bid in mid-May. Within a few days they received news that they'd won the bidding process. "We told them the maximum price we would pay and said, ‘Unless you're interested in that, we'll pass,' " remembers Ueberroth. "They came right back and said, ‘You'll hear that there are higher bidders [several were more than $1 billion] but we will make a commitment to you to sell to you if you can put together a group like you described." Now the real work began: putting together the financing and finalizing the paperwork.

Taiheiyo required a deposit of 5 percent of the purchase price, $40 million. Nonrefundable. "So if we weren't able to perform and put our group together, we would have lost that money," says Ueberroth, who, along with Dick Ferris, put the $40 million on the line. Serious dough.

By this time, Ueberroth had already come up with a kicker that would impress the Japanese as much as his Mount Rushmore of partners, an epiphany he'd experienced six months before he made his first phone call. He had started to assemble a group of individual investors, people bound not merely by their ability to chip in a minimum $2 million (and a maximum of $10 million, to guard against takeover artists), but who would also, according to Eastwood, "like golf, like Pebble Beach and have respect for the land and the place." Even today, Ueberroth describes the concept with a sense of wonder: "If you had enough investors so there would be no one dominant--no Marvin Davis, who could sell it--that would work. And it did."

Bank of America Securities was enlisted to handle the individual investors. On June 1, 1999, a black-bound prospectus titled Pebble Beach Investor Memorandum and bearing the Bank of America insignia began landing on the doorsteps of the richest, most passionate golfers in America. And the feeding frenzy began. Country clubbers began lining up for the chance to invest. Members of the Swallows Club--a group of heavy hitters who flock to Pebble for a tournament each fall--gobbled up units like so much birdseed. Within six weeks, 132 individual investors had signed up.

"I got 10 pounds of something," remembers John Moores, owner of the San Diego Padres who is building a house on the 18th at Pebble Beach, one of the few who declined to invest. "I don't know that this got the same amount of scrutiny that a normal business deal does, because people get pretty emotional about Pebble Beach."

The individual investors, says Ueberroth, are "almost without exception" friends of both Ueberroth and Dick Ferris. "It's a private list," he says, "but if you looked at lots of fields and said, ‘Who is the No. 1 or No. 2 most successful person?' you would find them as one of the owners of Pebble Beach. If you asked, ‘Who is the most important name in racing in the last 25 years?' you might guess Roger Penske [of Hertz-Penske]. If you looked at the best-known football player in the last five years, you might come up with John Elway. It's the same in [other] sports, in the investment community, in retail..." To that list, add former USGA president Buzz Taylor and Taiheiyo Club, believed to have purchased three units for a total of $6 million.

The identities of the others are being kept mum, but some certainly showed up at this year's AT&T National Pro Am tournament. "Billionaires on the Links" read the headline in The Carmel Pine Cone, and there they were, paired up with celebrities and pros in exuberant foursomes, the new era of Pebble Beach, arriving far more triumphantly than the Japanese had a decade earlier. Thundering onto the fairways, they're the titans of American business: presidents, CEOs and majority owners of GE, AT&T, IBM, KKR, Wells Fargo, Sun Microsystems, A.G. Edwards, Transamerica, Nordstrom, Charles Schwab--represented by Charles Schwab himself, whose house is being built on the site of the old fifth hole--men for whom $2 million would be a pittance, especially for a piece of Pebble Beach.

The $820 million had been raised: 132 limited investors, including the four partners, contributed $400 million, leaving $75 million of subordinated debt, with the balance of $345 million to be picked up by the GE Pension Fund with Bank of America as the lead bank. What do investors get for their cash? Certainly not anything resembling a membership nor preferential tee times nor even discounted hotel room rates. They can call a special investor's concierge, Lee Ann Seber, an 11-year Pebble Beach employee, who's already heard from 60 percent of the investors. "For the most part, it's golf and rooms," she says. "It could be spa packages. I've done restaurant reservations and found manicurists for somebody's wedding... I work with them on tee times. We never guarantee anything, but we try to work it out."

For their $2 million minimum, investors share the pride of knowing that Pebble Beach will stay in American hands. And there is also the most American of reasons, the hope that someday the investment will turn a profit. "Nobody's in it to throw money away," says Eastwood. "But they're not in it for a quick deal, for some IPO that's gonna go jumping off the charts. A lot of people who've owned it before would sell it on a turn. We're not looking to fix it up and sell it. We're looking to fix it up and be here."

This is the challenge, says Eastwood: "To fix it without killing it with improvements. There are always things that could be done. It's nice, but we'd like it to be the nicest it could be."

Ueberroth, of course, is the ultimate Mr. Fix-It. Just as he transformed both the Olympics and Major League Baseball from mere games into flag-waving, ad-incessant Network Special Spectaculars--some contend to the point of overcommercialization--he is certainly capable of taking Pebble Beach to the masses. "In the game of golf, Pebble Beach is probably the No. 1 brand in the world," says Ueberroth. "Can you extend that brand? The answer is, yes."

The new owners will undoubtedly venture into the sticky thicket of development, specifically the Del Monte Forest Plan, which has been awaiting approval since 1992, with opposition coming from the environmental community, regulatory bodies and Pebble Beach residents. The plan would add 318 new housing sites throughout the Forest (necessitating the removal of 30,000 Monterey pines), a fifth golf course that's already been routed by Tom Fazio and a proposed new equestrian center. The owners are also seeking to exploit the less-controversial non-land aspects of Pebble Beach. "The first thing is to preserve and polish it and make sure we understand it," says Ueberroth. "The area is underserved in golf, and one more public course in the Forest would be terrific."

"We're looking at sponsorship, looking at licensing, looking at e-commerce, looking at retail, other resort opportunities," says Bill Perocchi. "Those are all things that we're looking at, that we feel we could leverage the business."

The sale was finalized in a week of 7 a.m.-to-midnight sessions in the Lodge's Fairway One villa, as Ueberroth, Ferris, Perocchi and Co. sat on one side of the table, Jiromaru and his associates on the other, their Japanese bosses monitoring by phone and fax. When the details were satisfied, a contract, several inches thick, was prepared and signed. The actual closing occurred in an L.A. law office on July 30 last year, and the $820 million flowed in from all those disparate sources and sprayed out with equal ferocity to help quell the red ink in Japan.

Analysts have wondered how the new owners will shoulder the debt. They cite the company's estimated annual revenue of at least $150 million and profit margin of 30 percent against an outstanding loan of $400 million and wonder when, if ever, the debt will be retired. But for the principals, economics seem to have taken a back seat to emotion.

Pebble Beach, they proudly insist, will never be sold again.

The first board meeting was held on Oct. 7 at 8 a.m., Pebble Beach time. At 4 a.m. in Pennsylvania, Arnold Palmer climbed into his jet near his home, piloted the plane to Monterey and joined the new board of directors--Ueberroth, Eastwood, Ferris, Perocchi, consultant Paul Leach and John Meyers, president of GE Investments--to begin the business of Pebble Beach.

A month later, Pete, Dick and Clint stepped out onto the Pebble Beach Links. First they played Pebble, then they played Spyglass Hill. "I said to Dick, who's from the Bay Area, where I'm from, 'You ever think that you'd own Pebble Beach?'" Eastwood remembers.

He can't remember what he shot that day. But he'll never forget the view.