Bally Total Fitness, the gym operator controlled by the hedge fund Harbinger Capital Partners, filed for bankruptcy protection on Wednesday for the second time in less than two years because it was hindered by debt and limited refinancing options amid the credit crisis.
Bally plans to use existing cash reserves to continue operating. The company, which again filed in the Federal Bankruptcy Court for the Southern District of New York, plans to sell itself or reorganize during the Chapter 11 proceedings, The Associated Press reported.
Bally’s chief executive, Michael Sheehan, who replaced Paul Toback in June, said Bally’s long-term debt and lack of refinancing options left limited alternatives, despite continuing efforts to cut expenses and streamline operations.
According to CapitalIQ, Bally’s has total debt of $811.3 million and cash and short-term investments of $70.8 million. Total assets are listed as $411.4 million.
”The burden of Bally’s long-term indebtedness, coupled with the lack of refinancing options in today’s constrained credit markets, have limited our ability to restructure using out-of-court vehicles, leaving Bally with no alternative other than the actions announced today,” Mr. Sheehan said in a statement.
Bally first headed into bankruptcy early last year after it defaulted on its debt of more than $800 million. Bally then filed for a Chapter 11 prepackaged bankruptcy plan that helped simplify the process.
Harbinger’s Master Fund and its Capital Partners Special Situations Fund invested about $233.6 million in exchange for Bally’s common equity. Bally emerged in the fall of 2007 as a private company.
Unlike last year, Bally is not filing with a prepackaged bankruptcy plan, which would have helped shorten and streamline the process. Still, Bally said it hoped to emerge from bankruptcy ”as promptly as possible.”
Go to Article from The Associated Press via The New York Times »
2008
4:14 pm
You only need a video or dvd from the library to learn Pilates. I’ve got the figure I had in high school with less effort that I ever imagined with only the cost of a mat. Gyms are just part of the “luxury” market that are going to get hit hard.
What would a typical American give up first? The gym or eating out?
— Posted by Abby Tucson, AZ
2008
6:57 pm
there should be a three strikes law (or maybe in Bally’s case, 2 strikes) that abusers of bankruptcy laws cant stick it to their creditors because of poor management. Put liens on the board and the hedgefund’s salaries, bank accounts and homes.
— Posted by dd
2008
7:19 pm
Unfortunately health and wellness are NOT a luxury. For most people it takes a lot more than a workout DVD to lose weight. If it didn’t we wouln’t be plaqued with obesity related health problems in the USA…get real !
— Posted by Dianne
2008
10:05 pm
another one.
— Posted by Ron Tharpe
2008
12:28 am
I don’t fit your typical American. The first thing I would give up is eating out. The first thing to getting in shape is your diet. If you really want to be in shape, you have to give up eating out PERIOD. No chips no candy, no soda, no alcohol, no cigarettes, no drugs. Low Sodium, Low Sugar. Eat foods as if you were a diabetic and lift heavy weights and do cardio every day. If you can’t do it then you won’t make it. That’s the truth and that’s reality.
— Posted by Seventeen Reasons
2008
4:05 am
Thank you Dianne! I just heard on KCAL 9 LA that 1 in 4 in the US have obesity. Health and wellness is not a luxery.
— Posted by mike t
2008
5:39 am
As an employee in the company who loves her job as a trainer i am saddened by this news. If this company goes out, so will thousands of jobs.From my view on the inside, I get the impression that the current CEO could care less about his people or this company. The way things are be run we are DOOMED. It’s a shame because this is a great company that has great people working for it. It’s not all the bad that you hear.
— Posted by tamika
2008
11:35 am
It’s unfortunate that most Americans think like Abby in Tucson and view health and fitness as a luxury. That’s why only 20% of Americans have a gym membership and 67% of Americans are considered overweight.
Congratualtions Abby for being blessed with good genetics!! Unfortunately most people don’t have that.
— Posted by Don
2008
2:04 pm
Abby is right ,she said gyms are luxurys not exercise,chuckleheads,learn how to read.You can workout at home and lose weight but not with a boo hoo my body hates me so I’ll eat like a pig attitude.I’m selling short every gym stock I can get my hands on.
— Posted by joe
2008
3:04 pm
Gym experience is way different then watching Pilates DVD for sure. sitting on sofa and watching Pilates DVD.. is quite fun on weekends.. I use to do that too. But that time weight loss was a wish… but now its not a wish it an aim. Which may or may not come true but i am satisfied that I am trying.
So Abby you can question Bally Fitness but calling fitness it Luxury is not Fair.
— Posted by Almas Ghaziani
2008
4:10 pm
I train at Bally’s - only because I happen to like my trainer. They keep raising personal training rates, but don’t pass increases on to their trainers, who in my opinion deserve a greater piece of the pie. The excellent trainiers do not even get 50% of the fees, in spite of being highly accredited. I don’t think the facilities outweigh the value of the trainers.
— Posted by Janice
2008
9:55 pm
nothing has changed at the ballys i go to since the last time they filed for bankruptcy.
they need a complete overhaul!
— Posted by kevin
2008
11:16 pm
This is getting rediculous! Shut the doors already! Use the cash they have to keep the Clubs open….why don’t you pay back some debt! It is hard enough to be a employee for Bally the first time they filed Bankruptcy, and now again? I just hope maybe they brought Mr. Sheehan over from 24 hour fitness last year to be planning some kind of sell-out to 24 hour fitness, atleast they could give our members a good home and get rid of these worthless managers and leaders at Bally. If you knew how they operated you would be disgusted that they are filing chapter 11 once again. They have the worst work ethic and horrible leaders as mentors. Sorry, but this is the truth! Throw in the towel already! Give our Members some new nice Clubs with a new name!
— Posted by Madeline Molina, Glendale AZ
2008
10:19 am
I am a Bally’s member and ins strange way side with Abby , who if we understand clearly what she wrote, said gyms are luxury and NOT exercising or staying healthy. There are a million ways pple can stay in good health, walking/ running outside, cutting out bad foods and you name it. There are a million and one pple who can afford to go to a gym and still lose no weight/ do not get any healthier, so the key to revamping ur health, weight etc has to come from within, be there the availablity of a gym or not!
I have been an avid Bally’s member for years, however, I lose the most weight, jogging out in the summer, believe it or not!
— Posted by Nadia
2008
10:55 am
Justt fyi, you DONT have to go to a gym to be in shape…. My bodyfat is 16%. I have three kids (7,5, &2) and the only time I choose to go to the gym is when it’s raining or bad weather outside. I live in the south so, its not that often.
Dont make excuses. Educate yourself and save your own life. Dont wait for someone else to do it for you….it WONT happen
— Posted by mom to 3 & fitness competitor
2008
6:31 pm
I am a employee of Ballys, and have been for the last 5 years. And in that 5 years, I have seen the downward spiral of the gym I work at, for example the dry and wet sauna not being repaired, cheap rubber mats put down on the workout floor, not replacing lights in the area that I work in. The management at the club I work feels that we as employees, don’t have the right to know that the company we work for, is having financial problems, they would rather sweep it under
the rug, and leave us out of the loop. I guess what I am wishing for is to be told when the other shoe will drop.
— Posted by rosanna
2008
2:21 am
Well now I know why as many of the machines (bikes, stairmasters) broke, they didn’t fix them and just took them out. No $$ to fix or replace them.
I’ve been a member since 1992, worked out in Ballys in the half dozen states I’ve lived in and I have to say the one I workout in now (in Queens), has got to be the worst in many respects. Way too crowded, bike models that I was riding on 15 years ago in another state, not a cleaner of any kind available to wipe down sweat off equipment (and sometimes no papertowels!), and not enough accessories for a number of machines where various upper body muscles can be exercised (ie., lat pulldown machines where arms and upper back can be worked) and locking in the few accessories on one machines so they can’t be interchanged and only one exercise can be done.
Complaints to the manager elicited basically a shrug and a “nothing I can do” attitude, though he did say there was some new equipment in storage somewhere, but couldn’t formulate a satisfactory answer as to why it was in storage and not being brought out if things were breaking.
Frankly, the only reason I go there is because the other gym that was a 5 min walk from my house closed last winter and this Bally’s is a 10-12 min walk. Plus I’m lucky in that I had my rates locked in years ago and it would cost me an arm and leg to go anywhere else…or even there if I was a new customer.
What’s ridiculous is that they had a golden opportunity to gain a bunch of new members when my gym closed, but virtually all I knew were turned off by the crowding, price and not always cordial/sometimes too aggressive “sales” reps. So quite a number went to NY Sports Club and a couple of others. It would be too time consuming (and costly) for me to go elsewhere at the moment.
— Posted by dewotr
2008
3:01 pm
Maybe they’d make a little more money if they stopped scamming and ripping people off. Now they have no towel service (at least in the NYC gyms). How do they expect to get more members with such low customer service standards, and negative feedback on every consumer web site? Bally lose, NYSC win
— Posted by Ty nowicki
2008
3:10 pm
Does that mean I can finally cancel this sorry membership?
I hate Bally’s and wish I never joined!! The machines are always broke, the hot tub is always being worked on, and the sorry trainers are always “eyeing” all the women and I actually had a trainer ask for my phone number.
The classes; that are left are a joke! The instructors either show up late or not at all, and they don’t even carry a good assortment of classes in the first place. I can tell membership at my local Bally’s has dropped because it’s never crowded anymore and the regulars don’t show up any longer. It’s a joke, and you complain and nothing gets done. You want to know the worst; the music is set so low you can’t even hear it, and it’s not music to get you “moving”; maybe it will just close down all together and my prayers will be answered!! I hate to see anyone lose their job over this; but it’s the CEO’s fault and like another person said; they don’t care about their own employees!
— Posted by Sonjia
2008
12:07 am
I have been going to the Bally’s in Cincinnati for about three years. It is not a great gym, but I have developed a lot of friends there….we were talking today about what we would do if the gym closed. We agreed we would just have to join another gym together! I would miss a few of the current staff, although they have reduced the hours of so many that I only see one or two any more. In the three years I have belonged they have gone through four managers. The pool and sauna area is frequently closed and they don’t replace broken equipment.
— Posted by Jeanne
2008
1:06 pm
I have been a member since 1977, my father got me my memebership, I just renewed for 3 more years, I hope they do not go out of business. Does anyone know if that will happen.
Thank you…..
— Posted by Charlie
2008
2:30 pm
For a Single mom like me, Bally’s was an affordable daily escape. It was a place where I could workout without my 3 year old and 5year old interupting my workout. My kids enjoyed the kids club program. I have serveral pieces of workout equipment at home however,working out in a different environment is much more effective for me. I developed friends who encourged and motivated me. On many occassions some of the personal trainers provider me with free training session( when they were not busy). Bally’s is not a five star gym and they do have their flaws just like all companies. I am disappointed to hear about the possible closing and that their employees will lose their job. This means, there will be even more people depending on public assistance and unemployment. Let’s be mindful of the average american, because as we see the CEO’s of these company walk with millions.
— Posted by South Suburban Bally member (Chicago)
2008
3:30 pm
Maybe if an employee at the south hills village location in Pittsburgh, Pa would have stopped accusing people of training others when they were merely working out with others and was told that, the gym would be more attractive for groups of people wanting to do similar workout routines.
He is nowhere to be found at this location anymore.
— Posted by John (Pittsburgh)
2008
5:05 pm
I’ve been a member since they started in San Antonio. I’ve seen good and bad things. Overall, I like it and would like to continue going to Bally’s. I’ve met good friends. I’m schedule for renewal in February. I just hope they last that long and for many more years.
— Posted by Luis
2008
11:18 pm
The gyms that are closing are the ones that are not profitable! Obviously, if you came into a company as a CEO and saw how more than a quarter of your business was only money out you would too make these decisions. Frankly, they should have made these cuts years ago and maybe we wouldnt be in this position now! When does the consumer take responsibility??? Maybe if you actually took the time to read your contract before you signed it in 4 different spots and take a copy with you as a responsible consumer should do than there wouldnt be so much hate mail in the first place!
— Posted by john doe
2008
4:51 pm
They closed a good one in Manhattan and closed down the spa in another; there are really no good spas left in the Manhattan ones because they closed them down
— Posted by Tom
2008
12:05 am
maybe they should invest more money on profitable clubs and take better care of their employees. They should not make it such a stressed out enviorment for employees!!!
— Posted by john h.
2008
4:04 pm
You should all join the YMCA. I work out there and it’s clean. The equipment is well maintained and the friendly staff can’t be beat!
— Posted by Bev
2008
7:05 pm
I, too, work as a trainer — at one of the most successful clubs in the country. I’ve been there for more than 3 years. No, we are not happy with much of what has happened since the new CEO has come into office. However, I think he has had some tough decisions to make, and, unfortunately, all of us have had to take a bit of a hit. I could justify it by saying “at least I still have my job,” and I still had the opportunity to make the same amount of money. I’m just hoping that the “luck” Bally has had in landing on its feet in the past will hold now and we will have a buyer/investor soon to keep our company together. We have good people working for the company — it was a case until just recently of too many chiefs . . .
— Posted by Gerri
2008
2:58 pm
ballys stinks. the staff there stinks and if they werent so busy taking all of their customers to court maybe they wouldnt be losing so much money in attorney fees. Plain and simple, i go to the gym for 10 a month. ballys tries to charge u 50. that is completely insane and ridiculous. they should change their name to bullys. they use fraudulent business practices and it clearly shows in the economic downturn the company has undertaken. Happy Holidays.
— Posted by nick santoro
2008
12:11 pm
I just rejoined Bally’s for $99/year. You know they’re still making money
— Posted by Cici
2008
6:02 pm
I just quit a small independent club that I’ve been a member of since the ’70s. That club went thru three or 4 owners. It was sold to a Nautilus franchise in the mid-’90s and seemed to be running smoothly. Then there began a lack of maintenance and cleanliness and the manager ended up buying it. Things went down at rollercoast speeds. I quite a few months ago and joined Bally’s on a 3-year contract. I hope they survive. The lesson that I learned is that businesses don’t fail, management fails. And the reason management fails is because leadership fails. Rarely does a business fail because of its employees or disloyal customers. Happy customers tell their friends about their club; if they are good comments it saves a bunch on advertising; if they are bad comments it’s a kiss of death.
Leadership and management need to spend time in front of their mirror and ask, “Could I be the problem here?” I repeat: “businesses don’t fail, management fails.” But this is just my opinion, I could be wrong.
— Posted by richard gordon
2008
2:47 am
Has anyone heard any news about the Ballys in the Kansas City area? There are 3, one in Missouri, One in Overland Park, Kansas and the other in Olathe Kansas.
— Posted by D Norwood
2008
1:06 pm
Cici,
They gave you a $99/year membership because they are going belly-up! The local club I attend offered me a $300/year membership for three years, when the renewal notice I have been getting from the corporate headquarters has been $644. They want you to stay at any cost!
— Posted by Tom
2008
11:39 am
Bally’s is a hot mess & has shotty business practices. I have been a member for 2 years and wish that I could stop my membership and join another gym. The bikes are outdated and the pool / sauna area is in dire need of a makeover. A lot of the employees are lazy and rude… espeically Joe at the South Hills Bally’s in Bethel Park, PA. They don’t care about teaching members who to use machines properly unless you pay some outrageous amount for personal training. It’s just ridiculous. My friend tried to cancel her membership and believe me the mgr and the customer service was an abomination. All they care about is money… not service.
— Posted by ETG
2008
2:38 pm
I have had a membership at Bally’s for 15 years and I love my location. I also use a local park close by when the weather is nice in the summer and I use a rec center on campus where I attend law school. I would just say to those who have called gym memberships a luxury that, everyone is different. I think that its great if you can maintain your weight using a gym mat in your living room. Speaking from the perspective of someone who has a very slow metabolism I have to constantly do different things inside the gym and outside just to keep in shape. And I know that I am not motivated to do anything once I get home besides relax.
As far as Bally goes you can definitely see they have problems by the ridulously high turnover in their employment alone. I see new faces almost every couple of months. There are some regular trainers, receptionist and the wonderful juice bar lady name stephanie but the sales reps change frequently. The location that I go to in Maryland Heights, MO could use a makeover but other than that, the gym has everything that I need to keep reaching my fitness goals. I hope that they can get it together and their new leader can turn the company around.
— Posted by T.Q.
2008
7:12 pm
I have been a member since 1992 but have not renewed my membership which expires in three months because of the uncertainty of Ballys being able to honor memberships for much longer. If they cannot find a buyer and go out of business, members with paid memberships will just be more unpaid creditors, out of luck.
— Posted by Marvin
2008
1:14 pm
I have been a member of ballys since 2000. The trainers, and class instructors that I have encountered in Union City NJ, Wayne NJ and Saddle Brook NJ are not to be desired, with an exception of a few. I did better training myself and educating myself weight lifting, nutrition and cardio. They (trainers/instrucors) rarely stress the importance of form when lifting, or in classes or utilitzing the machines. With the exception of Felise one of the Yoga instructors who left Ballys and started her own school. She was exceptional. The majority of the better classes have been cut back. The instructors ( with the exception of a few) do not really care about your form or your heart rate. As many others have stated in this forum, they are more concerned with socializing then giving you personal training and good instruction.
I believe Bally’s could be on eof the better sport clubs if they trained their assocates with ethical skills along with their certifications of being a personal trainer/instructors. The Wayne gym seems as if it has all the old equipment. Saddle Brook and Union City is overly crowded including most of the remaining classes.
These are just a few of my observations.
— Posted by Norma
2008
5:41 am
I am an employee at a Bally’s. I never thought I would work for this company as I never thought highly of Bally’s. The gym was bought out by Bally’s several years ago. Before it became a Bally’s it was very clean and a great place to work. Recently, people have been let go that have actually done good for the company. The department i am in- our “manager” lives 7-8 hours away because of job cuts. Therefore, we have no one watching out for us in the club or even the area. Both area director and the director of our department was cut. You try to talk to “management” at the club and they don’t care. It has been heard that they think we complain. Management make excuses on why things aren’t being fixed. They refuse to spend money on what is needed to keep members happy. Even though I love what I do there, the club is FILTHY! The bathrooms are disgussing, the temperature in group fitness is unbearable. They did manage to change the light bulbs that weren’t working. . This club has already lost lots of members due to new, clean clubs popping up in the area. It is sad because this gym has taken a downward spinal. I give this company one more year at best. One day members will show up and the doors will be locked. i just pray that I keep getting paid- luckily we got direct deposit early this year, so when the money stops coming, i stop going.
— Posted by JT
2008
11:14 am
Where is the loyalty????These clubs have been around for over 40 years. They are harder to maintain than the new clubs popping up around and at a premium price (keyword “new”). Many of you have commented about low renewals. If you want brand new equipment and huge facilities, go join another gym that will certainly cost you a lot more. Is it fair to compare these gyms to other gyms that can cost 4 times as much???? Bally has the equipment, training and classes to elevate your heart rate and challenge your muscle groups. Some of you have mentioned getting out of your contracts. The clubs have Pay As You Go memberships (have for years), but you were too cheap to put down the larger down payment. Now you want to get out because you’re lazy. The debt is from forty years of previous management. Give the new guy a chance. There are very good people at the club I frequent. Bally has it’s problems, but so does every other gym. You’re only as good as your weakest employee and there are a lot of lazy people out there.
— Posted by Concerned Member
2008
11:15 am
I have been a member since 1988… During the first 10 years, I was an avid believer in the quality of these clubs and always recommended the Bally’s “product”. I have noticed a decline in the attention to details: lower number of staff available to help customers, lower standards of cleanliness in the locker rooms, slower to fix faulty equipment, etc. As a 20 year member who uses the full size pool as part of his routine, it would be disappointing to lose the clubs. I, for one, need to go ‘out’ to really workout. Just during the drive to the gym, I get psyched for my workout and focused on my goals. Top management needs to really listen to the feedback from their employees and members. They need to see more than the profit/loss numbers. I run a small company with 10 employees and 200 active customers. I frequently survey all of them for feedback on what I can do improve the business for all concerned. Genuine CHANGE reflecting the thoughts and recommendations from staff and customers CAN really turn around the IMAGE of the company and PROMOTE sales to NEW members! Real LEADERSHIP means LISTENING!
— Posted by Dean from NY
2008
5:22 pm
i have been a member at bally total fitness for about 10 years now and my membership is GREAT ! My club has all the basic essentials for a good gym, yes i did sign a contract when i signed up and for the people who are upset about signing one READ WHAT YOU SIGN! I mean you have to be an idiot to not do so. Yes my gym is kind of small and could have a more friendly crowd but WHO CARES when u go to a gym you are there to workout not spend the night GET OVER IT you guys are just looking for things to complain about.
-Posted by Ronnie from TX
— Posted by ronnie
2008
11:29 am
Bally is a convienient location for me to workout. However, there are a lot of flaws about it. First of all, it is a luxury and not a lot of people can afford it. Second, the facility is like junk that people would do stupid things like spitting gum on the water fountain or going to restroom without flushing the toilet. lastly, sales representatives does not give opportunity to give customers trial membership, but rather misled customers into signing long-term contract. I can go on and on about this company when other gym clubs offer affordable memberships.
— Posted by Hieu
2008
2:23 pm
I have been a member of Ballys for over 20 years before my club was called Ballys. A gym may be a luxury for some but I don’t see it that way for me. My health requires the use of a pool for exercise. Times are tough and we can’t afford health insurance and they don’t want to insure me anyway. But I can afford the $99 - $150 a year they charge me so I can have daily use of the pool. I thank God for Ballys and I will be praying that they don’t fold and my rates stay the same. It’s great if you can get what you need without a gym.
— Posted by Dee
2008
8:55 pm
Personal training studio’s are the way to go if you are looking for professional trainers anyway. The typical gym trainer is no better than the average gym member! The hard core sales approach at facilities like Bally’s is a turn off and those trainers who are professional trainers (at Bally’s) this is a blessing in disquise — as they will be forced to go to a professional personal training facility or on their own. People should not have to sign contracts of memberships. What happended to the old days when people simply paid monthly dues by check?
— Posted by Terry in AZ
2008
9:53 pm
I have been a member in Colorado for 8 years now. LIke staff anywhere, some are great and some do not care as much. The staff at the Colorado Blvd. location has really impressed me with knowing the names of guest, making them feel wlecome and going out of the way to take care of the guest and the facility. We bring friends here to join because of the staff. If Other locations ( or any business) took the time to do the same, they too would be succesful. I am sorry for the employees for poor performing locations who may loose thier jobs, but keep rewarding those who do a great job and keep them open for the investors and guest sake.
— Posted by Bill
2008
11:34 am
I think its not surprising that the clubs that are succeeding tend to be those that only offer “pay-as-you-go” memberships. For too many years Bally’s has relied on selling long term contracts with big payments up front (or in the first three years) and a very small renewing payment after that. This gives the club no incentive to keep members over the long haul. The Bally’s model works best if members sign the contract and then quit coming. That allows room at the club for a new member and a new upfront payment. A well maintained Bally’s with a large number of happy, long time, active, members would be a financial failure, because it would be generating very little revenue from the long-time members, and would be so crowded that new members would be reluctant to join. I see no future for this company the way it is currently structured.
— Posted by Fred
2009
3:48 pm
Bally should hire reception people that work. Its like you are bothering them to get your card scanned. The one VERY overweight recep was traning another overweight girl for the desk as both were sitting on the counter. I stood there as they stared @ me for 15 seconds & they just waved me into the gym without getting up or saying anything. Maybe Bally should hire people who actually workout or @ least pay people to do thier job. The bikes are way old & the towels were empty.
— Posted by Kevin
2009
5:40 pm
You do not need a gym membership to stay in shape. Their are plenty of other ways to exercise. Taking a walk around the park or jog through your neighborhood. Rather than wasting $1000 on a membership to Bally’s, you can purchase a treadmill for you home. I have had a Bally’s membership for 2 years now and rarely use it. I hate going their; it’s filthy and gross using those machines after others sweat on them
— Posted by CJ
2009
1:44 am
Can someone tell me, what happens if they file . Do you still owe on the membership????????
— Posted by lee
2009
8:42 am
Wow! I had been a member for over 20 years. The lack of maintenance, cleanliness and overall degradation on everything was apparent at 3 out of the 4 clubs I frequented since about 1999. Most of the management and employees also did not care. The only club that was good was in Troy, MI. I eventually joined another club paying more than $1,000 more per year…but well worth the change. Had to cut back so much on things to afford this and make this work. I realize not everyone can do this but hopeful that mangament at Ballys will read these comments start caring and do something with employee morale and customer satisfaction. This is another case of bad top management and the trickle down affect on the employees. All this bad PR is going to be their Kiss of Death! How sad I use to Love that place!
— Posted by Sad