{"id":1431,"date":"2010-11-11T10:20:04","date_gmt":"2010-11-11T17:20:04","guid":{"rendered":"http:\/\/robertfagan.com\/?p=1431"},"modified":"2011-10-24T23:22:02","modified_gmt":"2011-10-25T06:22:02","slug":"golf-club-behaving-badly","status":"publish","type":"post","link":"https:\/\/theaposition.com\/robertfagan\/commentary\/1431\/golf-club-behaving-badly","title":{"rendered":"Golf Club Behaving Badly"},"content":{"rendered":"

\"\"<\/a>Caddyshack’s Judge Smails is not running your club, but be careful someone worse might be.<\/strong><\/em><\/p>\n

Picture this at our mythical private golf club.\u00a0 (This story is based upon an actual long-established private country club.)<\/em><\/p>\n

Our club\u2019s physical plant and membership are both aging.\u00a0 The facility is located in a local community that is no longer conducive to an upscale social or golf club as the area has become increasingly economically challenged.\u00a0 Housing prices have decreased, incomes are suffering, and the locals don\u2019t play golf, much less have an interest in joining a private golf club.<\/p>\n

Our mythical course is a good golf course with charm and a long prestigious history.\u00a0 It has interesting terrain and nice views, and several entertaining holes, and has been around long enough to earn the term \u201cvenerable.\u201d\u00a0 The membership is a proud one with some new blood, but is nonetheless aging.<\/p>\n

The leader of our club has proposed that the golf course needs a facelift, a restoration to its historical roots.\u00a0 He thinks that course improvements will help add needed members. \u201cIf you build it, they will come\u201d our leader crows.\u00a0 \u201cWe will be the best golf course in the area.\u201d \u00a0\u00a0He even envisions the facility as a destination one.\u00a0 Sounds like a good idea, right?\u00a0 Think again.\u00a0 This is where our story turns problematic.<\/p>\n

For whatever reason, this leader does not apply usual sound business practices.\u00a0 At a time and in an area that just happens to have a host of talented golf course designers skilled in renovation, our leadership does not solicit competitive bids. He proposes hiring a relatively unknown man with marginal experience for double the rate of his other more established competitors.\u00a0 He ignored pleas to consider others whose renovation\/restoration work is generally considered very successful. \u00a0Can our mythical club afford any extensive makeover, let alone one done at a premium?<\/p>\n

Our leader says there is no time to waste and wants to move this project and its approval along as if it were an emergency \u2013 \u201cno time to wait, we\u2019ve got to do this now.\u201d<\/p>\n

Some wonder aloud if these course changes will cost more to maintain, slow down the rounds, make the course too difficult, and are in keeping with the original designer\u2019s intent, or if we need that much in the way of change or cost.\u00a0 In ugly rebukes, some are told to \u201cshut up.\u201d<\/p>\n

Some independent golf savvy outsiders have previewed the golf designer\u2019s plans and thought them to be superfluous and highly stylized, hardly in keeping with the term \u201crestoration\u201d that the prospective designer boasts.\u00a0 One attorney knowledgeable in all things golf and club-related suspects a badly flawed decision-making process and predicts a doomed club and closed golf course in only a couple of years if they proceed.<\/p>\n

Turning ugly, one dissenting Member is even sent a threatening letter by our leader to not contact anyone outside the club regarding this matter.\u00a0 Our leader has revealed himself to be a bully and it is beginning to polarize members.<\/p>\n

Now for the deathblow, our leader wants to throw on several million dollars of new debt onto our club during this current recession and at a time when the next generation increasingly prefer to play at a variety of golf courses or are leaving the game entirely.<\/p>\n

Rumors are circulating.\u00a0 The club is divided.\u00a0 Members are leaving.\u00a0 The Board may not even be following the Club\u2019s Bylaws.\u00a0 A lawsuit may be filed.\u00a0 Ugly politics and social dynamics begin to pervade the club.\u00a0 Under these circumstances would you want to join this club?<\/p>\n

Now you\u2019re thinking, \u201cI\u2019m glad this isn\u2019t my club or no club is that stupid or clumsy!\u201d\u00a0 Or maybe your reaction is that I conjured this all up.\u00a0 Unfortunately, our \u201cmythical golf club\u201d is real. \u00a0Our \u201cmythical club,\u201d was inspired by events at an actual private club, though that is really inconsequential as any of what has transpired at our mythical club is problematic and too often repeated.<\/p>\n

The point to this story is that there are some important lessons for current and prospective private golf and country club members everywhere.\u00a0 What happened here could happen anywhere, even to your<\/em> club.\u00a0 Your <\/em>club will likely face some of these same questions, challenges, or circumstances as our \u201cmythical club\u201d in the next decade.\u00a0 Golf club or country club bankruptcy is already here and likely to increase with the current demographics and economic climate together with the gentle, but steady decline in American golf participation the past decade.\u00a0 Yes I repeat that American golf participation is declining and has been since 2000.<\/p>\n

The vast majority of golf and private golf and country clubs are and have always been largely local businesses catering to a local clientele centered upon a 10-mile radius.\u00a0 Like the real estate business, their underlying health is predicated upon location.\u00a0 In all the areas in which I have either lived or studied, all things being equal, the clubs in prosperous, clean, safe neighborhoods with average to lackluster courses do better than those in declining areas with better golf courses.\u00a0 They have a bigger pool of membership candidates and are also able to charge higher entrance fees and dues, and eventually upgrade their golf courses.<\/p>\n

As a neighborhood\u2019s affluence declines, the pool of potential new members within that 10-mile radius declines.\u00a0 Thus the market quietly, but so very definitely will determine the ultimate success and even survival of a club.\u00a0 Should you add incompetence and flawed decisions, you simply speed the death march.<\/p>\n

Our \u201cmythical club\u201d has to work through all of this and its condition is \u201ccritical.\u201d\u00a0 I would be surprised if the club that inspired this story exists in its present form a dozen years from now.\u00a0 Private clubs had better think long and hard before going into debt, as golf no longer has any pent up demand from which to draw upon.\u00a0 Bankruptcy and closure for historic and prestigious private clubs once considered preposterous now looms.\u00a0 Current and prospective club members need to face this reality and maneuver very carefully if they want their club to survive. \u00a0The old business model no longer applies.<\/p>\n

Today there are many alternatives to the traditional private golf club model.\u00a0 Public access golf courses were once considered of inferior quality, but now that is no longer the case.\u00a0 Today many public courses might be considered equivalent or superior in quality (look, challenge, condition, physical plant, staffing, service) to their private course counter-parts. Avid golfers of upper middle class means (usual private club demographics) are increasingly likely to want to experience a variety of golf courses, especially when they don\u2019t have to invest a significant sum of money to join.<\/p>\n

Then there is the subject of food.\u00a0 So what does food have to do with golf?\u00a0 Once private clubs also were noted for superior food.\u00a0 In many areas where private clubs exist, a variety of new high quality restaurants have opened and many people enjoy dining around as opposed to frequenting the same spot time and again.\u00a0 Placing food-spending minimums at a private club adds not only a significant cost and inhibits other dining options, but has become necessary to keep this model working economically.\u00a0 Tomorrow\u2019s members may tire of supporting their club\u2019s restaurant indefinitely and not buy into this.<\/p>\n

Age of the membership is yet another factor one ought to consider.\u00a0 Back in the 70s, a good friend of mine joined the famous Merion Golf Club for an initiation of only $500.\u00a0 The club\u2019s demographics were becoming very old. \u00a0Merion very quickly filled that membership gap and remains very exclusive.\u00a0 Most clubs are not so fortunate.\u00a0 Here\u2019s why.\u00a0 It was reported that between 2000 and 2006, American golf lost between 20-25% of its white male golfers between the age of 26 and 45.\u00a0 That is a huge loss and a veritable ticking time bomb for the game moving forward.\u00a0 So don\u2019t count on easily filling lost memberships, even when the economy recovers.\u00a0 The pool of eligible prime target members is shrinking.<\/p>\n

A final very important point to consider is the cost of maintaining a membership.\u00a0 In the case of our \u201cmythical club,\u201d they are about to impose a heavy new debt upon their membership.\u00a0 Will they now be forced to increase their dues, their initiation, spending minimums, food, guest, and miscellaneous fees, or all of the above?\u00a0 Will they have to cut staff or delay maintenance and future capital improvements?\u00a0 Any of these actions will inevitably cause clubs to lose some if not many members and may also limit their ability to attract new ones.\u00a0 And if you add a questionable location, the potential is even worse.<\/p>\n

Back in golf\u2019s heyday in the 1990s, one could argue that a private club membership made good financial sense in addition to the social camaraderie, exclusivity, and usually quicker pace of play.\u00a0 Now that investment may<\/em> be a horrendous financial one.\u00a0 No one should count on any appreciation of his or her club investment.\u00a0 And that statement could also even apply to the more prestigious golf clubs.<\/p>\n

I applaud private golf clubs for wanting to upgrade their golf courses. In Northern California, I have enjoyed the course improvements made to the California Golf Club, Peninsula Club, Meadow Club, Claremont Country Club, the Olympic Club, Monterey Peninsula Golf & Country Club, and Los Altos Hills Country Club. \u00a0All are located in or around affluent areas so they may<\/em> be wise decisions.\u00a0 Conversely there are at least an equal number of clubs whose sizable expenditures did little to appreciably help their golf course in my opinion, much less solidify their membership, or improve their finances.\u00a0 Here are the lessons:<\/p>\n

1)\u00a0\u00a0\u00a0 Some improvements\/repairs are inevitable and necessary, but do not burden your membership with sizable debt.<\/p>\n

2)\u00a0\u00a0\u00a0 Do not assume that your golf course improvements will attract new members much less retain existing ones.<\/p>\n

3)\u00a0\u00a0\u00a0 In your new membership strategies, thoroughly examine your local demographics and the affect of increased costs.<\/p>\n

4)\u00a0\u00a0\u00a0 Defer on golf course changes that will make the course more difficult to play, slow the pace of play, or be expensive to maintain.<\/p>\n

5)\u00a0\u00a0\u00a0 Make any changes in a deliberate, open, and honest manner.<\/p>\n

Whether golf clubs are behaving badly or simply trying to survive, if you are a member of a private club or thinking of joining one, you should participate in your club, and be cautious of people trying to force change without a deliberate open change process.\u00a0 You should also consider the location, demographics, cost of membership, and quality of governance carefully when you consider joining a club.\u00a0 If these factors appear negative, you are probably better off not joining.<\/p>\n

A private golf or country club can still be great fun and an excellent way to enjoy golf, but, now more than ever, you should apply a wary eye to how the club goes about its business.<\/p>\n

You may call me \u201cDoctor Doom,\u201d but sadly I have predicted with 100% accuracy the demise of more than a dozen golf facilities.\u00a0 The only thing that surprised me is that it usually happened more rapidly than I had anticipated.<\/p>\n

A wise old golf pro once told me, \u201cIt takes dozens of people to make a club great and only one or two to destroy a club.\u201d\u00a0 In these times, that is particularly sage advice.<\/p>\n

Bob Fagan is the former Executive Director for the Northern California PGA. He currently works as an \u201cExpert Golf Witness\u201d in the legal field, and has consulted with more than one hundred golf facilities on service, operations, marketing, planning, safety and risk management, and governance.<\/em><\/strong><\/em><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Discover how private golf and country clubs can get into big trouble quickly and what you should be aware of to avoid these problems.<\/p>\n","protected":false},"author":41,"featured_media":4005,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4907,5975,6127,6569,6731,334,27552,65746],"tags":[1272,3930,3931,3932,1728],"class_list":["post-1431","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-oregon-golf-assoc","category-long-island-golf-assoc","category-so-cal-golf-assoc","category-azga","category-indiana-golf-assoc","category-commentary","category-wvga","category-mass-golf-assoc","tag-private-club","tag-debt","tag-course-improvements","tag-restoration","tag-renovation"],"jetpack_featured_media_url":"https:\/\/theaposition.com\/robertfagan\/wp-content\/uploads\/sites\/33\/2011\/06\/judge_smails.jpg","_links":{"self":[{"href":"https:\/\/theaposition.com\/robertfagan\/wp-json\/wp\/v2\/posts\/1431","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/theaposition.com\/robertfagan\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/theaposition.com\/robertfagan\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/theaposition.com\/robertfagan\/wp-json\/wp\/v2\/users\/41"}],"replies":[{"embeddable":true,"href":"https:\/\/theaposition.com\/robertfagan\/wp-json\/wp\/v2\/comments?post=1431"}],"version-history":[{"count":12,"href":"https:\/\/theaposition.com\/robertfagan\/wp-json\/wp\/v2\/posts\/1431\/revisions"}],"predecessor-version":[{"id":5913,"href":"https:\/\/theaposition.com\/robertfagan\/wp-json\/wp\/v2\/posts\/1431\/revisions\/5913"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/theaposition.com\/robertfagan\/wp-json\/wp\/v2\/media\/4005"}],"wp:attachment":[{"href":"https:\/\/theaposition.com\/robertfagan\/wp-json\/wp\/v2\/media?parent=1431"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/theaposition.com\/robertfagan\/wp-json\/wp\/v2\/categories?post=1431"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/theaposition.com\/robertfagan\/wp-json\/wp\/v2\/tags?post=1431"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}