In this second part of our exclusive interview with Michael Gradon, he explains why industry-leading operators Game4Padel have focused on outdoor padel clubs, avoiding the Scandinavian-style ‘warehouse’ model that’s spreading in the UK. (Read part one here)
Michael Gradon is a busy man. Padel is revolutionising the racket sports industry, reversing downward sports participation trends and becoming very big business – and he’s right at the forefront of this thrilling revolution.
As co-founder and CEO of Game4Padel, he presides over an empire of 25 padel clubs comprising 62 courts in four countries, with 21 of those clubs in the UK. These numbers could double, at least, by this time next year.
“My life is never dull,” he laughs. “We get offered sites almost every day, sometimes because we are the largest UK operator, others because they’ve been approached by another operator and would prefer us, and sometimes by people who have their own site and are super enthusiastic, but realise at some stage in the process that they don’t know how to design, build, get planning for, or operate a padel club; some of whom have money and some who haven’t.”
The opportunities that Game4Padel has taken to completion so far all have one thing in common – they are all outdoors. Gradon has observed the Scandinavian-style warehouse model move over to the UK (We Are Padel, Rocket Padel, Surge Padel, Pure Padel, True Padel, Slazenger Padel etc) and has – so far – avoided it.
“We feel the economics of padel are positive in outdoor venues,” he explains. “I think it’s challenging – although I wouldn’t say impossible – to make it profitable in a fully indoor structure if you’re paying commercial rents.
“If, for some reason, you’re not paying commercial rents and you have space to add padel, fantastic, but it’s a bit like a needle in a haystack trying to find an indoor structure suitable for padel with the required space. We would want a minimum of four courts and in a fully indoor structure you need social space, toilets, showers, changing rooms, bar, viewing areas etc. If you’re in a logistics warehouse with business rates which could be anything up to 50% of the rent, the economics get seriously challenging.
“Unless for some reason a building has been empty for three years and isn’t of interest to the logistics industry, you’re going to pay full commercial rent and business rates. A high-end indoor space with all amenities is very nice, but even at full occupancy, with normal rent they’re probably three times that of Scandinavia and we’ve all seen how the majority of the big companies there have gone bankrupt.
“We would never say never. I look at buildings pretty much every week and if there’s a golden nugget, we’d be all over it. There’s a lot to like about the indoor model; ‘change of use’ applications are certainly a lot easier than going through planning and building regulation approvals. But it’s hard enough to find outdoor sites that tick our boxes, so finding indoor sites that tick all our boxes is really, really hard.”
With a pipeline of projects with signed leases and planning regulation secured, and many others in negotiation, Game4Padel is set to add at least another 40 courts to its portfolio in the first half of 2025, taking them over 100 courts worldwide.
On a walk along Hove seafront last weekend, your author came across four pristine Game4Padel-branded padel courts ready to open to the good folks of Sussex imminently. The Padel Paper recently revealed Game4Padel’s exclusive partnership with GOALS football centres, which will see padel courts added to many of its 47 soccer sites nationwide, starting at Tolworth and Chingford in the New Year.
The above-mentioned projects will all benefit from high footfall and, with the padel courts being outdoors, they are highly visible, arousing the public’s curiosity and appetite to play.
Outdoor sites do have their disadvantages though. Apart from the obvious – the capricious British weather – there are planning and regulations challenges with building outdoors, especially near housing and when adding a canopy.
“We debate endlessly whether to go uncovered or add a canopy,” admits Michael. “Canopies bring with them a lot of planning and regulations challenges – and they’re getting ever more expensive. You’re now looking at around £150-200,000 per court when you add a canopy. Assuming you want a minimum of three, you’re talking significant investment.”
Canopies are the height of a typical three-storey building, which can make them a tough sell in metropolitan, residential, green belt or conservation areas. They also come with fire and flood risk – one Game4Padel project in Suffolk hit the skids due to flood risk that showed up during a planning application.
Due to these stumbling blocks and others, getting projects to completion can take up to three years. “We’ve only got to our current size because we started early [in 2019],” Michael states. “If you started today and followed our business model, you will find it very hard to grow quickly. It’s been incredibly frustrating. For other companies copying our lower risk business model, it’s a long journey.”
Despite the pitfalls, Game4Padel are now finding real momentum. They have undergone seven funding rounds and are backed by high-profile funders including Andy Murray, Virgil van Dijk, Jamie Vardy, Andrew Castle, Jonathan Davies and Annabel Croft. Gradon will be snipping the ceremonial tape at many new clubs in early 2025.
He says: “I liken it to creating a factory production line. Once you’ve got it up and running, products come off it with fairly monotonous regularity. A huge proportion of our courts opened this calendar year and I very much see the acceleration continuing into the first half of next year and beyond.”
