A revelation..golf was never meant to make $$$$$

[Mike_Young]

An 85 year old man was talking to a group of us yesterday and listening to bitching( not form me but a couple of others)....AND he said..."problem with clubs today is these managers and how they want to make a profit....we built this place for the members to enjoy"

He's onto something....from what I can decipher Golden Age golf was not built to make a profit....and then muncipalities built golf and subsidized it for the people.....of course resorts needed to profit BUT the big problem came with RE and housing....

And we fight it constantly.....it was never meant to be a business for profit

[Jud_T]

Given that very few are making a profit in the current economic climate and RE courses are all but dead, some of the raditional values of the game may well re-emerge. 
For instance, a fun 6600 yard course with firm and fast conditions for fifty bucks a round is now a lot more appealing to many than a 7200 yard championship layout that is really lush for 125 a round...

[Jim_Kennedy]

Mike,
As soon as golf became seen as a product the 'game' was doomed to the trashiness of commercialism.

[TEPaul]

MikeY:

One of the most explanatory answers to your question (at least at one truly prominent club) was Howard Perrin's April 1, 1913 membership solicitation letter for Pine Valley.

[Mike_Young]

MikeY:

One of the most explanatory answers to your question (at least at one truly prominent club) was Howard Perrin's April 1, 1913 membership solicitation letter for Pine Valley.

Well....you got a copy?  or what did it say....dude....

[Bill_McBride]

So how do you reconcile that with the need for the mom and pops to make enough profit to survive and put a little back into the business and put a little into a retirement account?

[TEPaul]

Mike:

It stressed loud and clear that if any subscriber (for membership) was doing it with the thought of making any money they should not subscribe!

[Mike_Young]

So how do you reconcile that with the need for the mom and pops to make enough profit to survive and put a little back into the business and put a little into a retirement account?

Bill,
I am saying that it made me realize that the mom and pops are bucking a trend.....and in order to make it they have to either cut maintenance or increase green fee....and both options are not favored by their customers....but they will make it and there are definitely exceptions....

[TEPaul]

"So how do you reconcile that with the need for the mom and pops to make enough profit to survive and put a little back into the business and put a little into a retirement account?"


Bill McB:

Basically any thinking or honest person can't reconcile it. Obviously some golf operations have to MAKE some money or they just won't survive. Basically this is the philosophical breaking point or dividing line between essentially private and public golf.

[Bill_McBride]

"So how do you reconcile that with the need for the mom and pops to make enough profit to survive and put a little back into the business and put a little into a retirement account?"


Bill McB:

Basically any thinking or honest person can't reconcile it. Obviously some golf operations have to MAKE some money or they just won't survive. Basically this is the philosophical breaking point or dividing line between essentially private and public golf.

Even a break-even private club has some hefty salary and benefits in the cost lines, every business entity have to "MAKE some money..!'

It's easier if you shut down the catering / ballroom operation!

[Steve_ Shaffer]

What was the first non-muni, non-resort, daily fee public course in the US?

Private clubs were meant to break even or not lose money. Who came up with idea that a public daily fee course could make money?

[Mike_Young]

"So how do you reconcile that with the need for the mom and pops to make enough profit to survive and put a little back into the business and put a little into a retirement account?"


Bill McB:

Basically any thinking or honest person can't reconcile it. Obviously some golf operations have to MAKE some money or they just won't survive. Basically this is the philosophical breaking point or dividing line between essentially private and public golf.

Even a break-even private club has some hefty salary and benefits in the cost lines, every business entity have to "MAKE some money..!'

It's easier if you shut down the catering / ballroom operation!

OK....they lose..they assess....

[Eric Franzen]

Basically any thinking or honest person can't reconcile it. Obviously some golf operations have to MAKE some money or they just won't survive. Basically this is the philosophical breaking point or dividing line between essentially private and public golf.

To a certain extent maybe. A municipal course or a private club may not have profits as their main objective. Still, both if them need some money to cover maintenance and other basic stuff.

[Chris Cupit]

Hmmmmm.

The Golden Age was also a time when golf remained almost an exclusively white and rich man's sport.  Small groups of wealthy men could enjoy their playgrounds and if the operations did not sustain themselves they all chipped in and covered the losses. 

My hypothesis is that creating an economically viable model for golf (or any game/sport) is what makes the sport enjoyable, possible and attainable for the masses.  I 100% agree that the sport lost its way and as it became an "industry" business models were built that fundamentally changed the way golf was originally meant to be played.  Expectations in America were forever changed and while I would love to see things return to a far simpler model I am not sure its possible or if there is even a market for it anymore.

GCA represents a tiny, tiny minority (of whom I am one) that for the most part want solid architecture, walkable courses, firm fast conditions and could care less (and may even resent) monies spent on pools, dining rooms, courts etc....But how many families will you attract with that model?

I am a small "mom and pop" that while surrounded by "full service/lifestyle country clubs" really focuses on the golf and a place to get a nice, simple meal and a drink afterwards.  I can provide good golf for someties half the dues of the other guys but I know I lose some prospectives as soon as they realize this place isn't the swim team, tennis league, fancy dining, line dance classes type of facility.

Sorry, for getting off topic.  

My point, and I think I had one at first, is that for the game to be able to be enjoyed by the "regular man" it must be economically viable.  Groups, clubs, organizations that try to not make money, inevitabley lose money and that requires someone to pony up.  Not too many people can afford a game/hobby where at the end of the year they must fund some unkown liability.

[Bill_McBride]

"So how do you reconcile that with the need for the mom and pops to make enough profit to survive and put a little back into the business and put a little into a retirement account?"


Bill McB:

Basically any thinking or honest person can't reconcile it. Obviously some golf operations have to MAKE some money or they just won't survive. Basically this is the philosophical breaking point or dividing line between essentially private and public golf.

Even a break-even private club has some hefty salary and benefits in the cost lines, every business entity have to "MAKE some money..!'

It's easier if you shut down the catering / ballroom operation!

OK....they lose..they assess....

Reality bites!

[Mike_Young]

Basically any thinking or honest person can't reconcile it. Obviously some golf operations have to MAKE some money or they just won't survive. Basically this is the philosophical breaking point or dividing line between essentially private and public golf.

To a certain extent maybe. A municipal course or a private club may not have profits as their main objective. Still, both if them need some money to cover maintenance and other basic stuff.

so do the softball fields and tennis courts and hiking trails at any municipality..... .they definitely lose money.....the taxpayer subsidizes or the member is assessed....

[Jim_Kennedy]

When the 'Oldest Member' said the club wasn't built to make money he didn't say it wasn't going to take in revenue. There's a big difference in charging what's necessary to meet operating costs, putting away some monies for upkeep, and letting an owner take home a salary than what I think the old gentleman was saying.

[Mike_Young]

Hmmmmm.

The Golden Age was also a time when golf remained almost an exclusively white and rich man's sport.  Small groups of wealthy men could enjoy their playgrounds and if the operations did not sustain themselves they all chipped in and covered the losses. 

My hypothesis is that creating an economically viable model for golf (or any game/sport) is what makes the sport enjoyable, possible and attainable for the masses.  I 100% agree that the sport lost its way and as it became an "industry" business models were built that fundamentally changed the way golf was originally meant to be played.  Expectations in America were forever changed and while I would love to see things return to a far simpler model I am not sure its possible or if there is even a market for it anymore.

GCA represents a tiny, tiny minority (of whom I am one) that for the most part want solid architecture, walkable courses, firm fast conditions and could care less (and may even resent) monies spent on pools, dining rooms, courts etc....But how many families will you attract with that model?

I am a small "mom and pop" that while surrounded by "full service/lifestyle country clubs" really focuses on the golf and a place to get a nice, simple meal and a drink afterwards.  I can provide good golf for someties half the dues of the other guys but I know I lose some prospectives as soon as they realize this place isn't the swim team, tennis league, fancy dining, line dance classes type of facility.

Sorry, for getting off topic.  

My point, and I think I had one at first, is that for the game to be able to be enjoyed by the "regular man" it must be economically viable.  Groups, clubs, organizations that try to not make money, inevitabley lose money and that requires someone to pony up.  Not too many people can afford a game/hobby where at the end of the year they must fund some unkown liability.

CC...you sayin what I am tryin to say

[Mike_Young]

When the 'Oldest Member' said the club wasn't built to make money he didn't say it wasn't going to take in revenue. There's a big difference in charging what's necessary to meet operating costs, putting away some monies for upkeep, and letting an owner take home a salary than what I think the old gentleman was saying.

right on....
my entire gist was as it relates mainly to RE golf as an amenity.....
all of the expense that was placed on the golf amenity in order to increase lot value and then it is expected to be a functioning entity 15 years later.....

[Joe Hancock]

What an owner hopes is that they run the business long enough and make a decent salary doing so that when the opportunity comes, they have built equity in the property and can benefit at the end of the deal. The opportunity to make profits is slim. Here's the limiting factor:

Number of rounds a course can support in a given environment: Climate, population, recreational competition, etc. usually determines what the ceiling is on the number. So. Cal courses will be able to accommodate more rounds than No. Mich. courses for almost every reason imaginable.

Then, figure in the dollars per round than can be expected.

For the course I used to own, we knew our ceiling was $600k. We never hit it. So the key is to hang on long enough until an opportunity arises, and make a meager living while operating the course. Debt load and seasonal weather can make or break this whole equation. Towards the end, we were trying everything we could to spend less because our number of rounds had dropped significantly....time, school activities, you name it, but rounds were falling and you can't raise prices during those times to compensate for the difference. You suck it up and hope to make it through.

Joe

[Rob Rigg]

Kind of makes sense - it is like owning a winery - 99% of it should be about the passion, not the profit to succeed.

If I had the chance, I would love to build a course that was created to provide enjoyment with the hopes of breaking even - obviously not a good business model, but a fun "strategic" public course of about 6,600 yards with a really strong junior development program seems like a great way to grow the game. I am sure there are many places like this around the country that are losing money, which is a shame.

[Tom_Doak]

Rob:

One of the best pieces of advice I've ever heard in the golf business was from Jack May, the founder of Stonewall, to one of my prospective clients.

The client had told Mr. May that they weren't really interested in making money on their project, and he stopped them cold.  He told them never to say that.  If you phrased it that way, you were bound to lose money, and you weren't going to find anybody who wanted to invest with you to make the course happen.

He told them just to say that they were "not trying to make as much money as possible" in the endeavour.  He said that was rare enough that it would get everyone's attention and make their point, without making them seem naive.

P.S.  By the same token, many of the problems in our economy [golf and otherwise] seem to have stemmed from the insistence by Wall Street that every company try to make as much money as possible, in the quarterly view.  It's justified all kinds of behavior, from fudging the quarterly numbers to private-equity reorganizations to outright cheating.

[JC Jones]

P.S.  By the same token, many of the problems in our economy [golf and otherwise] seem to have stemmed from the insistence by Wall Street that every company try to make as much money as possible, in the quarterly view.  It's justified all kinds of behavior, from fudging the quarterly numbers to private-equity reorganizations to outright cheating.

Tom,

While I agree with you that the profit maximization norm is the center of many of our problems, I would submit to you that I believe Wall Street's behavior is reflective of this norm and that it is not the originator. 

[Tom_Doak]

JC:  Human nature is, of course, the originator of every behavior.  Wall Street was just the forum where this particular behavior became the default setting.  (Pardon the pun.)

[JC Jones]

JC:  Human nature is, of course, the originator of every behavior.  Wall Street was just the forum where this particular behavior became the default setting.  (Pardon the pun.)

I agree that Wall Street is A forum where this has become a default setting.  Unfortunately it is also the default setting in just about every other forum imaginable from consumer purchasing to people's occupational choices.

Although I think we are successfully off topic

edit:  Jim, good catch.  Change made.