[Tom Birkert]

Doesn't sound too good for the Members there...

http://www.telegraph.co.uk/sport/golf/3367441/Credit-crunch-forces-owner-to-put-Loch-Lomond-Golf-Club-up-for-sale.html

[John Kavanaugh]

Why do you think a sale would be bad for the membership?

And two, isn't this a bigger story found at the bottom of the article?

Anger is mounting in St Andrews over the condition of the former Hamilton Hall student residence, which overlooks the 18th green of the historic Old Course. The landmark Victorian multi-storey property, which featured in the film, Chariots of Fire, was bought from St Andrews University by an American real estate firm in 2004 for a reputed £22 million. But the distinctive red sandstone building has been lying empty ever since and is now showing clear signs of deterioration.

[Sam Maryland]

interesting read.

anyone have any idea what kind of debt load the club has?

I thought this quote was funny (or not):  In a letter to members, Mr Anderson said: "I am confident the bank shares my view that Loch Lomond Golf Club is one of a kind in the world. "

in this environment banks don't give a sh*t about a "one of a kind golf course" one way or the other...it's just numbers on a piece of paper.

SM

[Tom Birkert]

John,

I presume that any new buyers will have to look to be more commercial with Loch Lomond, and Members who have paid substantial amounts of money for their debenture membership (and were able to recoup 90% of the fee should they sell it on) will find that this is no longer the case as the Membership is liquidated.

Unless a very wealthy individual buys the club as a trophy asset (unlikely) it will probably be a company that buys it, and then makes it either semi-private or a top level resort course, which will mean the Members lose out either way.

[John Kavanaugh]

The article says they currently have 700 members.  That along with the fact that every club in the UK is semi-private anyway leads me to believe that the sale would be a good thing for the membership.  They mention Sean Connery as a member...Is there a chance in hell his membership is anything more than honorary?  How did his lawsuit in the US workout over one of his "memberships"?  Also,  why would I care that Robin Williams has played the course...Sounds like a new ownership could be very good for the members.

[Sean_A]

The article says they currently have 700 members.  That along with the fact that every club in the UK is semi-private anyway leads me to believe that the sale would be a good thing for the membership.  They mention Sean Connery as a member...Is there a chance in hell his membership is anything more than honorary?  How did his lawsuit in the US workout over one of his "memberships"?  Also,  why would I care that Robin Williams has played the course...Sounds like a new ownership could be very good for the members.

John

Loch Lomond may have 700 members, but they are restricted as to how many games a year they can play - something like a dozen.  So, the course isn't in the least crowded.  I can't possibly see how a buy out would benefit the current members unless they are hard up and don't want to pay high subs anymore for what is essentially a country type membership. 

The club already went through hard times early in its life.  If I recall, loads of "local" members were recruited for what was a relatively cheap amount of money to join (£5000?).  This money kept the club afloat.  Later, when the club was a big deal and all, the powers that be put a levy on the membership of more than the joining fee.  Some of it was undoubtably for drainage work, but some also believed it was a clever way to ditch the rif raf who joined cheaply.  I don't know if this is true or not, but I seem to recall the Carnegie Club opened their arms to these "rejects" who refused to pay the levy and resigned their memberships.  It was quite a story and I spoke to one chap who was still bitter over it - and he wasn't one of the ones who resigned.

Ciao

[John Kavanaugh]

Sean,

Exactly why new ownership is a good thing.  Do you really believe that greater cash flow can be achieved by dismissing 700 members and collecting green fees?  Don't most used cars find more happiness and care with a new owner?

[Brian_Ewen]

I presume this includes membership of Dundonald also ?

[Sean_A]

Sean,

Exactly why new ownership is a good thing.  Do you really believe that greater cash flow can be achieved by dismissing 700 members and collecting green fees?  Don't most used cars find more happiness and care with a new owner?

John

I don't think you are following too well.  The folks at Loch Lomond joined BECAUSE it was so exclusive - a very unusual style of membership in the UK.  Being bought out runs a high risk of the exclusivity disappearing if a company needs to recoop its investment.  I think it could be a great business deal if the price is right because I think loads of people would jump at the chance to play Loch Lomond simply because it has become famous and is off limits.  My guess is that most members would expect their membership fees to drop considerably if visitors were allowed to play.  Many of these guys are corporate types who use the place to entertain clients/potential clients.  Loch Lomond would lose its cache for these purposes. 

Ciao

[Gary Gruber]

" I don't know if this is true or not, but I seem to recall the Carnegie Club opened their arms to these "rejects" who refused to pay the levy and resigned their memberships."

No this is not true. 

[John Kavanaugh]

Sean,

My opinion is that Loch Lomond can keep the same model under different ownership.  As courses all over the world sell I don't believe it will always be for the worse of the membership.

[Chip Gaskins]

I talked to a former member last night and he said it came down to two things:

1) too many remote members

2) too much cross collateralization across many of Mr Anderson's other properties/clubs

I am sure the club will flourish under a different financial structure.  It is supposedly a fantastic spot!

[John Kavanaugh]

I talked to a former member last night and he said it came down to two things:

1) too many remote members

2) too much cross collateralization across many of Mr Anderson's other properties/clubs

I am sure the club will flourish under a different financial structure.  It is supposedly a fantastic spot!

The best source for misinformation is a former member.  I find most to be bitter douche wads.  There is no such thing as too many remote members.

[Bob_Huntley]

Is Old Head next?

Bob

[Adrian_Stiff]

Sean,

My opinion is that Loch Lomond can keep the same model under different ownership.  As courses all over the world sell I don't believe it will always be for the worse of the membership.

I would have thought the best route to make this financially work for a investor would be to allow a limited number of 4 balls at say £600 per tee time ie £150 per round. These 60 visitors per day will yield around £50,000 per week (clear of Vat & Admin) £1,500,000 per year (allowing 30 weeks out of the 52). Members could be kept but as Sean says the club would lose its exclusive status. Anyone considering a purchase of Loch Lomond would want to make money or at least not have a 'titanic like' businessplan that is going to sink at the first hail storm.
Golf clubs all over the world will go bust, but the courses will mainly remain. What happens is their condition status deteriorates to more affordable levels where income and outgoings balance.

[John Kavanaugh]

If a club has 700 members bringing in over $3,000,000 in dues alone why can't it make a decent return at a fire sale price.  You guys seem to miss out on the fact that a non-exclusive Loch Lomond will not get 60 greens fee paying visitors per day.   150lbs a round is a joke fantasy.

[Sam Maryland]

at a recent meeting of the membership Bill Jones III refused to disclose how many members there are at Sea Island...

...why would a club want to keep that a secret?

SM

[John Kavanaugh]

at a recent meeting of the membership Bill Jones III refused to disclose how many members there are at Sea Island...

...why would a club want to keep that a secret?

SM

I do not believe any private club should have a membership roster.  Few things piss me off more than Christmas cards from members from which I have no more than a passing acquaintance.  I would also prefer names be left off of member lockers. It is nobodies business who or how many belong to any private club.

[Adrian_Stiff]

If a club has 700 members bringing in over $3,000,000 in dues alone why can't it make a decent return at a fire sale price.  You guys seem to miss out on the fact that a non-exclusive Loch Lomond will not get 60 greens fee paying visitors per day.   150lbs a round is a joke fantasy.

John- Clearly the outgoings exceed the income hence the financial problem. More money needs to enter the pot, those figures I gave you equal about 12,500 visitor rounds per annum. Many clubs are £100 in the UK some even +£200 they get visitors, Loch Lomond is a bit special same as Valderamma which is +£200, its not overly easy to get on there. I think the rate I quoted is realistic.

[Tom Birkert]

Loch Lomond is one of very few clubs in the UK which actually is private - Members and Guests only. I can think of the likes of Queenwood and Old Head which are also like this.

I believe a debenture at Loch Lomond was circa £50,000, almost unheard of for a UK club, although Queenwood is even more expensive.

The Members paid their money to have a course that is basically empty for use as they please. As has been mentioned, it does have quite a corporate feel to it.

Unless the new owners come in and basically keep things the same (highly unlikely), then the current Members will lose out either financially or in terms of exclusivity, access etc. Whether this is actually a good thing in the grand scheme of things is open to debate, that it will be to the detriment of current Members is pretty obvious in my opinion.

[John Kavanaugh]

Isn't it possible that the owner is selling not because Loch Lomond is failing but because his other investments are.  Isn't it a lock that Loch will sell for a song.

[Ally Mcintosh]

Adrian's figures make perfect sense to me... 60 paying players per day at £150 is very achievable... Not all golfers are links-mad like this forum.

Tom,

Old Head is not private.

Queenwood most certainly is though... Another I can think of is The Wisley.

Theoretically Swinley Forest and Rye are as well but it is fairly easy to secure a round there, unlike the two mentioned above (and Loch Lomond).

[Tom Birkert]

Their last financial year accounts don't make pretty reading - 300% increase in operating losses to £19.2M, a shareholder defecit of circa £70M.

Mr Anderson apparently wanted a huge amount of money for Loch Lomond, had no takers, and hence the situation as reported today

The only possible solution I see is if the price is realistic and someone like Richard Caring decides to buy it like he did with Wentworth - and even then Members will lose out,

[Andrew Mitchell]

I would have thought that Adrian's figures for green fee income are easily achievable.  Loch Lomond has consistently been rated in the top 15 UK courses for the past few years, yet to the vast majority of UK golfers has only been glimpsed on TV during the Scottish Open.  An opening of the doors to unaccompanied visitor play would be likely to lead to a significant influx of visitors both from the UK & abroad.

[Chip Gaskins]

If a club has 700 members bringing in over $3,000,000 in dues alone why can't it make a decent return at a fire sale price.  You guys seem to miss out on the fact that a non-exclusive Loch Lomond will not get 60 greens fee paying visitors per day.   150lbs a round is a joke fantasy.

John- Clearly the outgoings exceed the income hence the financial problem. More money needs to enter the pot, those figures I gave you equal about 12,500 visitor rounds per annum. Many clubs are £100 in the UK some even +£200 they get visitors, Loch Lomond is a bit special same as Valderamma which is +£200, its not overly easy to get on there. I think the rate I quoted is realistic.

i am not sure that is the problem here.  actually it could be that loch lomond was collateral for another failing development

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