The White House will soon make golf/country clubs extinct if

[JESII]

I agree, it won't be pretty and we also don't root for the club down the street to fail.

I think of it this way, in every club there's some significant percentage of people that just do not need or support that club for any number of reasons. If the club closed its doors tomorrow they wouldn't care much at all. The ones that do care will have somewhere nearby (at least in the greater PHL area) to go and be welcome.

Sure, there's collateral damage which hurts but it has to be minor compared to other long term strains from this.

[George Pazin]

John,

         There's a problem with your thesis... some of us, a few, did not live beyond our means, we don't have credit card balances,  we drive older cars that are paid for and we live in house that we actually can afford.  We don't take extravagent vacations, etc...  we just keeping plugging along hoping and praying that something will be left for the rest of us.  So I respectfully take offense with being lumped in with those people you mentioned in your post.

Respectfully yours.

You deserved to be offended and downright po'd. Unfortunately, you will still be left holding the bag. Sorry, the only consolation I can offer is that you're not alone and hopefully you'll vote your heart and mind.

Sadly those who "did the right thing" will be punished  as well those who did not.

No, they will be punished far far far more. They didn't do anything to cause the mess, and it is they who are truly the ones who have to clean up after others, not others who think they have...

[JMEvensky]

I agree, it won't be pretty and we also don't root for the club down the street to fail.

I think of it this way, in every club there's some significant percentage of people that just do not need or support that club for any number of reasons. If the club closed its doors tomorrow they wouldn't care much at all. The ones that do care will have somewhere nearby (at least in the greater PHL area) to go and be welcome.

Sure, there's collateral damage which hurts but it has to be minor compared to other long term strains from this.

Agreed.It will be horrible for golf clubs.But,in the grand scheme of things,golf club survival isn't that big a deal.

[George Pazin]

Agreed.It will be horrible for golf clubs.But,in the grand scheme of things,golf club survival isn't that big a deal.

It will be a pretty big deal to those who work there. That's the ugly side of the contraction of so-called luxury items that most fail to see.

There will also be contraction within secondary and tertiary industries - the greenkeeping supply folks, the equipment folks (whoops, so much for "good factory jobs"), the uniform suppliers (here's looking at me, kid), etc, etc. Then my vendors and the greenskeepers vendors et al will start to feel the pinch...

[JMEvensky]

George Pazin,you're right.Any time any business fails,the effects cascade to places a lot of people fail to consider.

What I probably should have said was that,in the grand scheme of things,golf club survival isn't that big a deal except to those who are directly/indirectly affected.

[Michael Whitaker]

Pat,

It is not I who "don't get it."

You said, "Clubs with significant debt will be the first to go since the reduced number of members won't be able to support the debt, with its rising per member annual cost."

Many of these clubs you want to save have acquired significant debt by building opulent clubhouses, tennis facilities & pool complexes...  commissioning $10 million course renovations... providing dining services meant to rival the finest restaurants. I feel no sorrow if these clubs drown under their own financial weight.

Your gloom and doom prophecy was preached when tax deductions for dues were eliminated years ago. Still, these clubs were able to survive and dig themselves into an even deeper trench.

It is the law of the jungle that is in play here: Be Good or Be Gone!

[George Pazin]

Pat,

It is not I who "don't get it."

You said, "Clubs with significant debt will be the first to go since the reduced number of members won't be able to support the debt, with its rising per member annual cost."

Many of these clubs you want to save have acquired significant debt by building opulent clubhouses, tennis facilities & pool complexes...  commissioning $10 million course renovations... providing dining services meant to rival the finest restaurants. I feel no sorrow if these clubs drown under their own financial weight.

Your gloom and doom prophecy was preached when tax deductions for dues were eliminated years ago. Still, these clubs were able to survive and dig themselves into an even deeper trench.

It is the law of the jungle that is in play here: Be Good or Be Gone!

Again, you are talking about good people losing jobs. Further, if clubs go under, they may not be able to pay those who actually did the work you denigrate already. How fair is that? A lot of independent businessmen extend their own credit to get jobs - it sucks to do it, but those who are not self-employed often can't understand what is involved with the thinking behind whether or not to do a job.

I'm not advocating bailouts of any sort, but I think it's a little callous to dismiss Pat's concerns.

[Phil Benedict]

I think it's a tough to get 350+ people to shell out $10K a year, which is about the average ticket for a full-service private club, other than for the most elite courses or courses near a financial center where lots of people have plenty of discretionary income.  Publiic policy may be a factor but an unsustainable business model is often the root cause of financial woes at private clubs.

I don't know what the right model is for some of the more financially-stressed clubs - scaling back on non-golf related amenities, having more flexible membership categories to attract golfers who want to play less freguently than full members, or going to a semi-private model to increase revenues from outside play.  All of these have drawbacks in that they might drive away existing members. 

[Phil McDade]

George:

One can agree or disagree with Pat's take on this, but his point is the diminishment of golf course architecture via the loss of clubs with hallmark courses. Like the views of the Pacific Ocean Patrick dutifully ignores while playing Pebble Beach or Cypress Point, we shouldn't concern ourselves with the loss of employment if these clubs go under. Architecture -- perhaps. Jobs -- no.

Pat's one of our leading hypocrites when it comes to participating in OT threads. Maybe Fortson was correct...

[Michael Whitaker]

Pat,

It is not I who "don't get it."

You said, "Clubs with significant debt will be the first to go since the reduced number of members won't be able to support the debt, with its rising per member annual cost."

Many of these clubs you want to save have acquired significant debt by building opulent clubhouses, tennis facilities & pool complexes...  commissioning $10 million course renovations... providing dining services meant to rival the finest restaurants. I feel no sorrow if these clubs drown under their own financial weight.

Your gloom and doom prophecy was preached when tax deductions for dues were eliminated years ago. Still, these clubs were able to survive and dig themselves into an even deeper trench.

It is the law of the jungle that is in play here: Be Good or Be Gone!

Again, you are talking about good people losing jobs. Further, if clubs go under, they may not be able to pay those who actually did the work you denigrate already. How fair is that? A lot of independent businessmen extend their own credit to get jobs - it sucks to do it, but those who are not self-employed often can't understand what is involved with the thinking behind whether or not to do a job.

I'm not advocating bailouts of any sort, but I think it's a little callous to dismiss Pat's concerns.

George,

I am self-employed and have (successfully) run my own business since 1990. Before that I was the typical "corporate man," so I understand both sides of the argument very well.

My wife started her own small business five years ago after 30 years as a teacher in the public school system, so we also understand the government's role in providing employment and benefits.

Pat expressed concerns about protecting a "way of life." You can cloak it in anything you want, but "way of life" in ths context translates into the "haves" hanging onto their privileged social meeting places. If they have enough money to support the lifestyle to which they have become accustomed, then so be it. If they have made poor decisions that put their "lifestyle" in jeopardy, then too bad for them. They should have thought long and hard about the possible consequences before spending that last million dollars on a clubhouse renovation, hiring a $150,000 a year chef... or, approving the 1.7 million dollar course maintenance budget, or hiring the $250,000 rock star superintendent.

[Patrick_Mucci]

Pat,

It is not I who "don't get it."

You said, "Clubs with significant debt will be the first to go since the reduced number of members won't be able to support the debt, with its rising per member annual cost."

Many of these clubs you want to save have acquired significant debt by building opulent clubhouses, tennis facilities & pool complexes...  commissioning $10 million course renovations... providing dining services meant to rival the finest restaurants.

In RARE cases, maybe, but many, if not most, upgraded their 80 to 100 year old facilities/clubhouse to attract and retain members and to accomodate the trend to cater to inside/outside functions in order to gain more revenue from diversified sources.

I can't remember being in an oppulent clubhouse in the last few years, but then again, I haven't traveled much.


I feel no sorrow if these clubs drown under their own financial weight.

If a club with 400 members budgeted expenses, and now, due to the downturn, only has 250 members, is that their fault ?

Would you cite 10 clubs that spent 10,000,000 on the renovation of their golf course ?
There's only one I can think of and they neither borrowed nor assessed their members

Would you cite 10 clubs that spent 10,000,000 building an oppulent clubhouse ?
Tennis facility ?
Pool Complexes ?

Your gloom and doom prophecy was preached when tax deductions for dues were eliminated years ago.


That's not true.
Only the cost went up since companies continued to pay dues for their employees.
The attrition factor was minimal

Still, these clubs were able to survive and dig themselves into an even deeper trench.
Which clubs ?

It is the law of the jungle that is in play here: Be Good or Be Gone!

I've always been very fiscally conservative when serving on Boards.  I was against any and all forms of borrowing and believe firmly in the "pay as you go" method of operation.  Still, many couldn't predict the downturn in the economy.
One only has to look at the unemployment figures to understand that.

Some clubs were fiscally reckless, but more often than not, many, if not most clubs made a shortsided decision, and that was, rather than pay as you go, pay as you go along, never considering that the membership ranks would diminish to dangerous levels, increasing the cost per member of the pay as you go along methodology, which in turn caused more members to leave, which in turn increased the costs per member and so on and so on.  A death spiral has begun.

When a club goes out of business, the employees lose their jobs.
The vendors lose their customers, the towns and States lose their tax revenues  and the economy is far worse for it.

Reducing disposable income amongst hard working people will bring about the demise of many, many local clubs.

If you applaud that, what can I say ?  

[Patrick_Mucci]

George:

One can agree or disagree with Pat's take on this, but his point is the diminishment of golf course architecture via the loss of clubs with hallmark courses. Like the views of the Pacific Ocean Patrick dutifully ignores while playing Pebble Beach or Cypress Point, we shouldn't concern ourselves with the loss of employment if these clubs go under. Architecture -- perhaps. Jobs -- no.

Phil,

I don't mind disagreeing when we debate an issue, I do mind it when you lie.

I NEVER said I ignored the views outside the boundaries of the golf course, I stated that they don't influence the architectural features of a given hole, and that they don't affect playability on a given hole.

In the future, Please try to get your facts right.

Pat's one of our leading hypocrites when it comes to participating in OT threads. Maybe Fortson was correct...

This thread is far from OT.

[George Pazin]

George,

I am self-employed and have (successfully) run my own business since 1990. Before that I was the typical "corporate man," so I understand both sides of the argument very well.

My wife started her own small business five years ago after 30 years as a teacher in the public school system, so we also understand the government's role in providing employment and benefits.

Pat expressed concerns about protecting a "way of life." You can cloak it in anything you want, but "way of life" in ths context translates into the "haves" hanging onto their privileged social meeting places. If they have enough money to support the lifestyle to which they have become accustomed, then so be it. If they have made poor decisions that put their "lifestyle" in jeopardy, then too bad for them. They should have thought long and hard about the possible consequences before spending that last million dollars on a clubhouse renovation, hiring a $150,000 a year chef... or, approving the 1.7 million dollar course maintenance budget, or hiring the $250,000 rock star superintendent.

Congrats, you have me by a couple years, I started my business in '92.

The thing is, many of the folks you are talking about are facing the prospect of having the rules changed mid-game, all because of an insatiable lust for money from our own government. That doesn't sit well with me, and it never will. Many of those people were able to pay for the clubhouse renovation, the 150K chef, etc., until the government decided it "needs" more money. That's disgusting, in my book. I have very little in comparison to these folks, yet I sympathize with them as much as the little guy who stands to lose his job.

[David_Tepper]

"The thing is, many of the folks you are talking about are facing the prospect of having the rules changed mid-game"

George -

What "rules" are you referring to? Tax brackets? Tax rates? Those "rules" have changed often over the past years and decades. This country prospered mightily in the 1950's, when tax rates were substantially higher than they are now.

There was an article in today's paper saying that the Obama administration had, in fact, lowered taxes for the vast majority of Americans. But, thanks to the misinformation campaign that pollutes the airwaves, only 8% of Americans were aware of that.

From today's San Francisco Chronicle: Most Americans don't even realize their taxes went down since Obama became president. In a New York Times/CBS News Poll last month, only 8 percent of respondents said they thought the Obama administration has decreased taxes for most Americans.

Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2010/10/26/BU4O1G1OP9.DTL#ixzz13VaIAzWZ

DT  


 

[Bill Brightly]

I really dont want to get into a political debate, but Pat is right: the current economic situation will have a HUGE impact on the private courses that so many of us play. And that makes this "on topic."

[A.G._Crockett]

I'm curious to know more about the "virulent anti-business" atmosphere in Washington.

Is it the 30 million or so new customers that will be coming to private health insurance companies?  Is it the fact that GM is still in business (and beginning to look potentially profitable), along with dozens of suppliers, retailers, and hundreds of thousands of employees?  Is it the gradual recovery of credit markets, which two years ago were teetering on the brink of total collapse?

What have I missed?  I thought I was paying attention...  

[mike_malone]

http://www.prudentbear.com/index.php/guestcommentaryview?art_id=10454


    This is a fascinating account of how consumer debt ballooned in the roaring 20's and not coincidentally the golden age of golf architecture took place followed by the depression and many nle's.   

   Our last 15/20 years dwarfs the 20's in growth of consumer debt, so watch out.....

    Pat didn't say this was economics he said it was politics. I think he is dead wrong on that. " It's the economy, stupid!".

[Joe Perches]

I read this and was a bit surprised:

http://www.mainstreet.com/article/moneyinvesting/news/20-worst-charities-america

3rd Highest Salary: Donald Johnson, Evans Scholars Foundation

Compensation (2008): $2,049,976
Most people can be forgiven for not knowing anything about the Evans Scholars Foundation, created in 1930 to support golf caddies. That’s right, golf caddies. The group’s website explains, “Each year, more than 800 deserving caddies across the country attend college on a four-year scholarship from the Evans Scholars Foundation. Selected applicants must have a strong caddie record, excellent grades, outstanding character and demonstrated financial need.”

Chairman Donald Johnson, who collected $195,000 in salary in 2007, rocketed up to third place with a compensation package of more than $2 million in 2008. Such a jump is surely due to deferred salary or some sort of retirement bonus, as Johnson left the organization at the end of 2009.

[David_Tepper]

"I'm curious to know more about the "virulent anti-business" atmosphere in Washington."

A.G. Crockett -

Not to mention that the stock market in UP 65%-70% in the past 18 or so month.
Even IBM's stock price recently made an all-time high.    

DT

[David_Elvins]

I really dont want to get into a political debate, but Pat is right: the current economic situation will have a HUGE impact on the private courses that so many of us play. And that makes this "on topic."

It is not just the events of now, it is the events of the lat 20 years that will influence golf development in the next 20 years.  There was a massive boom in the golf course industry not seen since the 1920s.  It is almost impossible to follow that with anything other than tough times and a rationalisation of the industry.

The most important thing that most of us on here can take away from this thread is a sense of gratitude that us, fans of golf course architecture, were able to live through the greatest period of time in the history of golf course architecture.

We should be considering ourselves lucky for being able to experinece the last 20 years of golf course development, not bemoaning the fact that it is all down hill from here.  Most of us knew, in the back of our heads, that it was all too good to be sustainable, anyway.   

[Bill_McBride]

I read this and was a bit surprised:

http://www.mainstreet.com/article/moneyinvesting/news/20-worst-charities-america

3rd Highest Salary: Donald Johnson, Evans Scholars Foundation

Compensation (2008): $2,049,976
Most people can be forgiven for not knowing anything about the Evans Scholars Foundation, created in 1930 to support golf caddies. That’s right, golf caddies. The group’s website explains, “Each year, more than 800 deserving caddies across the country attend college on a four-year scholarship from the Evans Scholars Foundation. Selected applicants must have a strong caddie record, excellent grades, outstanding character and demonstrated financial need.”

Chairman Donald Johnson, who collected $195,000 in salary in 2007, rocketed up to third place with a compensation package of more than $2 million in 2008. Such a jump is surely due to deferred salary or some sort of retirement bonus, as Johnson left the organization at the end of 2009.

Golden parachute!  

[Bill_McBride]

I'm curious to know more about the "virulent anti-business" atmosphere in Washington.

Is it the 30 million or so new customers that will be coming to private health insurance companies?  Is it the fact that GM is still in business (and beginning to look potentially profitable), along with dozens of suppliers, retailers, and hundreds of thousands of employees?  Is it the gradual recovery of credit markets, which two years ago were teetering on the brink of total collapse?

What have I missed?  I thought I was paying attention...  

It's all about the campaigns to elect Republican and tea party candidates so the cycle can start all over again.

[Patrick_Mucci]

Forget the politics, is there actually any debate about the substance of what Pat wrote?

Those three areas represent $10,000 or more of real living cash flow for the people that join private clubs. The impact will be huge.
Agreed.

My question is, does it matter?

It does if you interest is in preserving good to great architecture.

Taking emotion out of it, my general area is so saturated with private golf that it could use a correction. If we lost 25% of the clubs the remaining 75% would be extremely healthy.

You're area only has excess capacity because the economy is so bad.
5 or 10 or 20 years ago, there was no excess capacity.
I know of a club that had a published waiting list of 250 people.
I know of clubs where becoming a member took longer than 8 years due to demand
All that has changed.  But, if clubs go under, as they surely will, that excess capacity needed to accomodate more members won't exist, for once a club is gone, it's usually developed or ceded to local agencies for greenspace, never to be a golf course again.


I think attrition will cause clubs to fail with some members of the failed club joining other clubs.

For it to be completely relevant to this website we would have to revisit the question of...does the quality of the architecture drive the financial health of the club? Around here, no. It's the club's ethos and fiscal responsibility.

I don't think you can discount the quality of the architecture.

So Pat, in my opinion, you're right but does it really matter? We've got too many golf clubs.

Only in the context of the current economic environment.
You didn't have too many clubs 5, 10 or 20 years ago because of the incredible demand.

Just like raising business taxes will kill any chance at recovery, eliminating those deductions/credits will hasten the demise of golf/county clubs and the courses affiliated with them.

[Patrick_Mucci]

I'm curious to know more about the "virulent anti-business" atmosphere in Washington.

Is it the 30 million or so new customers that will be coming to private health insurance companies?

What 30 million new customers ?
The one's who aren't going to pay premiums for any coverage ?
The one's with pre-existing conditions, who refused/neglected to buy insurance previously, who will now help to put healthcare costs deeper in the hole with claims where no premiums have been paid.

Is it the fact that GM is still in business (and beginning to look potentially profitable), along with dozens of suppliers, retailers, and hundreds of thousands of employees?  

Still in business ?  For whose benefit ?
Certainly not the BONDHOLDERS, who were abandoned and left with an almost worthless investment.
Certainly not the Shareholders.
All those people who had bonds and stocks in their 401 K got killed.  So, who has benefited ?
The new owners, the unions, for them it's been a windfall

Is it the gradual recovery of credit markets, which two years ago were teetering on the brink of total collapse?

What have I missed?  I thought I was paying attention...  

You weren't.

Business is lousy, unemployment at record highs.

Have you been overseas for a few years ?

[Patrick_Mucci]

"I'm curious to know more about the "virulent anti-business" atmosphere in Washington."

A.G. Crockett -

Not to mention that the stock market in UP 65%-70% in the past 18 or so month.
Even IBM's stock price recently made an all-time high.    

David,

Do you think the stock market increase has any impact on the unemployed ?

Do you think the stock market increase has any impact on creating new jobs ?

We're all ignorant, just on different topics, and with A.G. Crockett he just happens to be clueless about the anti-business environment in Washington, DC.  Perhaps he's one of the few people on the planet who hasn't gotten the memo
 

Talk about having your head in the sand.... trap, errr bunker that is.