[SL_Solow]

Mike;  The title of this thread is somewhat misleading.  If the question is whether we can/should discuss the viability of various models for private clubs on a theoretical basis, supplementing the theory with real world applications  (perhaps without identifying the club) then that is at least tangentially related to architecture and it should be fair game.  However, absent permission from the owner/members, disclosure of non-public financial information about any club is in bad taste at best and actionable at worst.  While I am as curious as the next fellow and have been privy to the workings of more than a few institutions as part of my work, I don't believe its anybody's business.  Candidly, we get in enough trouble around here when we critique the work of experts in the design field.  I shudder to think what would happen to this site if we began to disclose confidential financial information about clubs and follow that uo with the temerity to comment on their mistakes.  Let's stick to pursuing our central area of interest.

[Jud_T]

Furthermore,

There have been posters who have asked direct questions about clubs' fees and dues without regard to a clubs' privacy in the past.  Some may not have any experience with the private club model.  Essentially, unless a price is quoted somewhere on a public website, assume that you shouldn't be asking questions out of school.  Private inquiries through the proper channels for those serious about potential membership will yield the answers you seek.  If you're not a real potential member, then it's not your concern.

[Mike Sweeney]

Mike;  The title of this thread is somewhat misleading.  If the question is whether we can/should discuss the viability of various models for private clubs on a theoretical basis, supplementing the theory with real world applications  (perhaps without identifying the club) then that is at least tangentially related to architecture and it should be fair game.  

I tried, it would not fit !!

Has anyone under 45 years of age posted on this thread?

That is the segment that golf is not reaching, and let's not even talk about women!

[SL_Solow]

Mike;  Nice answer re the title.  Historically, clubs have recruited the vast majority of non-legacy members from those 40 and older because that is when the level of financial stability allows the investment.  Whether golf is reaching the younger generation so that when their time comes they will join is an interesting question.  Our club has added a large number of members in their 40's in the last few years due to a concerted effort.  I don't know if that means anything in the greater community.

[David_Elvins]

...discussing the finances of particular clubs is unfair unless you are going to do it across the board.  They're like banks ... loose talk can lead to a loss of confidence and cause a run on one ... even though many of their competitors are really in the same or worse position, and just better able to avoid talking about it...

I agree with this point of view but it is not without it's moral complications.  
-A friend lost $50,000 on a poor investment in a golf club.
-I did not know him well at the time but his loss may not have happened if I had shared my knowledge of the club on here.  
-It is not easy to rationalise this on a personal level.

I am far from the only one that has encountered this issue.  Many members of the GCA community have been burnt by poor investments in golf clubs.  On most occasions information made public by GCA posters would have helped them make a more informed decision.


Is our loyalty to the golf industry, our friends, or the GCA community?  Answer: None of the above.

 It's not easy to say but  the reality of the situation is that self interest rules the day.  People (including me) do not discuss private golf club matters because it is in their best interest not to.  

[Jud_T]

David,

People lose on investments all the time.  That means they either didn't do their own due diligence or they just timed the market poorly.  Part of joining a club is understanding the balance sheet of the club and getting references from current and former members.  If one doesn't know one or two guys to talk to about a club's situation before joining, and if they can't afford for things to turn south, they probably shouldn't be joining.  None of this needs to be broadcast to the public at large.

[David_Elvins]

Jud,

I agree, and follow the same logic.  But it doesn't always hold up when developers or owners push the limit of what is ethical or legal.  

Did people who invested with Bernie Madoff not do enough due diligence?

[SL_Solow]

David;  2 points.  First, with respect to Madoff, in many cases the answer to your question is yes, people failed to perform due diligence.  Many who sought real information were turned away by Madoff, replaced by those who only saw the "returns" and who were willing to accept the benefits without understanding the "hows and whys".  But more importantly, if you have information that someone may be committing a fraud, the place to expose the fraud is not a website inhabited by a limited number of people.  Moreover, if you are wrong and you make your revelation, the reputational harm you create could be tremendous.  I am certain that each of us can empathize with your concern for your friend.  If you had knowledge that might have prevented his loss, I suspect that you wish you had been given the opportunity to tell him.  But it is equally clear that he did not ask your opinion.  Taking that one example and suggesting it creates an open season for disclosing either confidential information or even worse, one's suspicions that a club is having difficulties would be a major mistake

[Chris Shaida]

'Investing' in golf clubs is much the same as 'investing' in cars.

[Mike Sweeney]

Now we are talking!

1. Put me in the line of stupid people who drank the GCA.com juice at the top of the market.

2. I know from many private exchanges that I am not number one on the list here on GCA.com who lost money from bad deals on new clubs.

3. If I had read the fine print of "2 in for every 1 out", perhaps this thread does not start.

For every dollar lost on my obsession of golf courses (I keep telling my wife that many men have worse obsessions ) an Autistic kid via my son's charities does not get that dollar.

So I again ask, "Should the private golf club business model be discussed openly on GCA.com?"

I do not accept the premise that this is a "golf architecture only website". Sure there are exceptions such as Wild Horse but Yale Golf Course was the most expensive ever built when it was completed. I love it, but it was paid off years ago because the business model was unique:

• the land was donated to Yale
• the course was surrounded by a very financially sound (most of the time) academic institution that subsidized the financing of the course

Fishers Island, Shinnecock, Winged Foot and many others had difficult times before they figured it out.

I have never met Chris Johnston, have never been to Dismal River and in general do not like guys from Notre Dame (relax it is a Boston College insecurity issue, not Chris or Pat Mucci's fault!) but I appreciate the fact that he talks about the reality of golf course architecture rather than the coffee table book version.

What is the problem with supporting golf in the big picture as opposed to worrying about a dying model of private clubs that are short members by 20-30% on average?

[Chris Shaida]

Now we are talking!
...

What is the problem with supporting golf in the big picture as opposed to worrying about a dying model of private clubs that are short members by 20-30% on average?

Yes, now we ARE talking.  There's absolutely nothing in the world of golf that can't be solve by closing 20-30% of the golf courses in America.  It worked for public accounting! There were 5 and they were all struggling.  Shut down 1 (20%) -- thanks Enron! and the other 4 have been on easy street ever since!

[Chris Shaida]

btw, anybody who wants to continue this conversation in person let's meet at Gaonnuri (a fabulous korean restaurant on the 39th floor at the southeast corner of Broadway and 32nd) tomorrow around 1.  I'm buying!

[David_Elvins]

David;  2 points.  First, with respect to Madoff, in many cases the answer to your question is yes, people failed to perform due diligence.  Many who sought real information were turned away by Madoff, replaced by those who only saw the "returns" and who were willing to accept the benefits without understanding the "hows and whys".  But more importantly, if you have information that someone may be committing a fraud, the place to expose the fraud is not a website inhabited by a limited number of people.  Moreover, if you are wrong and you make your revelation, the reputational harm you create could be tremendous.  I am certain that each of us can empathize with your concern for your friend.  If you had knowledge that might have prevented his loss, I suspect that you wish you had been given the opportunity to tell him.  But it is equally clear that he did not ask your opinion.  Taking that one example and suggesting it creates an open season for disclosing either confidential information or even worse, one's suspicions that a club is having difficulties would be a major mistake

Shelly, I 100% agree with you, I was just stating that there are obvious negatives to a less than open environment.  Fraudsters, scammers and pyramid schemes thrive in an environment that is less than open and transparent.  Many pyramid schemes promote themselves as a invite only exclusive club with limited publicly avalable information.  This also happens to be the drawing card of many legitimate and great golf clubs.   This makes the private golf club market an environment that is perfect for shady types to rip off golfers as it becomes very difficult to tell the difference between what is going to be great exclusive club and what is a club being run by a group of shonky operators.  

[Tom_Doak]

I had to look up "shonky".  The word was new to me but the meaning wasn't. 

David, we architects run into all types in the course of looking at potential jobs, and sometimes even we have no idea who we're dealing with until late in the game.  We do our best, but anyone can get fooled.

It's easy to turn down a job if you have doubts about the client at the beginning.  It's not so easy once you're under contract.

Nevertheless, in 30 years in the golf business, the only "pyramid scheme" I've heard of was the one in Japan where a fellow was selling memberships to an exclusive new course for a half-million dollars apiece.  It turned out he sold close to 10,000 of them before he was caught.

[Tim_Cronin]

I think I have a new favorite word! And it rhymes with wonky, another favorite.

Anyone curious about any non-profit's financial situation can easily find its 990 (Federal tax form for non-profits) online. Look at a few years and you see if an operation, be it a charity or a club, is vibrant or not. You can even see how much Tim Finchem is being overpaid.

[Chris Johnston]

I have never met Chris Johnston, have never been to Dismal River and in general do not like guys from Notre Dame (relax it is a Boston College insecurity issue, not Chris or Pat Mucci's fault!) but I appreciate the fact that he talks about the reality of golf course architecture rather than the coffee table book version.

Mike,

I can be counted amont the casualties of the "join it and lose it" gang.  I joined a really cool club in Jackson Hole that went bankrupt.  That's why I mentioned debt as an issue years back - I was burned by it, and that's why we operate the way we do.

I will forgive you the Notre Dame bias and affection for Boston College.  If you ever happen to visit, be forewarned, you might not find some of our signs to your tastes, but we do hold Mass on the back deck from time-to-time.   

If I were looking at an independently owned club, here are the "Top 10" things I would want to know, would ask and/or would pay attention to:

1.  Does the club generate cash flow, if not net income?  (Disclosure nugget for those curious: Happily, Dismal River does both)

2.  Is the club overleveraged?  (as many of us have seen firsthand, excessive debt kills)

3.  Does the club take care of CapEx needs.  You can easily "eyeball" this on the course and facilities. 

4.  Is the membership high cost and refundable, or lower cost and non refundable?  (know what you are buying)

5.  Have there been financial "red flags" in the clubs history, are they openly disclosed, and have they been addressed?

6.  Is there any history of ownership, is ownership hidden or engaged, and can you meet the owner?

7.  Is there a strong continuity of employees, or do they churn every year?  (Stability here is a very good sign)

8.  What is the "get out" procedure?

9.  Are there any club minimums, or other limits, that aren't a good fit for me? 

10.  Do I like and fit into the club and it's culture, and do the members seem engaged in the club?

If the "top 10" generate a green light, you should be in good shape.

[Mike_Young]

Mike,
I think you need to distinguish differentiate between the private club which is a 501c4 , non profit model and the private club which isowned by an individual or group for profit.  Two totally different animals.  Also I see no reason for anyone not to discuss the model if they wish BUT they should do so with the understanding that if their club frowns upon it they cannot be upset if asked to leave.     Anyhow, the two types operate in an entirely different manner.

[JESII]

Gotta say, these last several days have changed my perception of your participation here immeasurably Chris.

We've never met and I may not have ever addressed a question to you so it's possible we've had absolutely zero interaction although I've viewed and read many of your posts.

Typically I've thought your posts demonstrated over the top bias about your course. Recently it occurred to me that if a course I were a member of (let alone an owner!) was the topic of so much discussion here you can bet I would point out all of the positives I could about it...so with the light of a little different perspective, thank you for contributing here. Even in this thread (which seems like a time bomb my friend Mike) that last post may be the most valuable anyone on this site could take away in hoping to learn about a prospective club's business model.

[Sean_A]

Well, I like Jim's sentiments even though I never thought Chris an ott booster.  Chris has taken some unreasonable licks so far as I am concerned, probably down to the evils of electronic communication.  I wish we had a club manager as invested in my club the way Chris is in his.

Ciao

[Carl Johnson]

. . . absent permission from the owner/members, disclosure of non-public financial information about any club is in bad taste at best and actionable at worst.  While I am as curious as the next fellow and have been privy to the workings of more than a few institutions as part of my work, I don't believe its anybody's business. . . .

I agree that one needs to be circumspect regarding non-public financial information.  However, a lot of financial information is readily available on "nonprofit" clubs.  Clubs like Augusta National and Quail Hollow (Charlotte) are organized as closely-held business corporations and their financials are not available.  However, most (educated guess) private clubs are organized as 501(c)(7) nonprofit social organizations and as such file an annual report on Form 990 with the IRS each year, and a heck of lot of financial information (including salaries of high paid employees) is available there.  One place to source these forms - which are legally required to be open to the public - is  http://foundationcenter.org/findfunders/990finder/

[SL_Solow]

Carl and Tim;  You are absolutely correct about the information disclosed by not for profits.  Much to be learned, particularly debt levels.  That information is fair game.  But for information disclosed only to members and prospective members, it would be a breach of confidence and good faith to publish it here or anywhere else.  For those whose only concern is that they might be tossed out of the club, they have a different understanding of what it means to "give one's word" then I was taught.  If there is a fraud being perpetrated then one has a duty to report it to the proper authorities, particularly if you are a member of the institution.  But if you just don't like it, keep your promise and move on.  Alternatively, stay at the club and fight the good fight to change the model.

[JMEvensky]

Gotta say, these last several days have changed my perception of your participation here immeasurably Chris.

We've never met and I may not have ever addressed a question to you so it's possible we've had absolutely zero interaction although I've viewed and read many of your posts.

Typically I've thought your posts demonstrated over the top bias about your course. Recently it occurred to me that if a course I were a member of (let alone an owner!) was the topic of so much discussion here you can bet I would point out all of the positives I could about it...so with the light of a little different perspective, thank you for contributing here. Even in this thread (which seems like a time bomb my friend Mike) that last post may be the most valuable anyone on this site could take away in hoping to learn about a prospective club's business model.

Agreed.

Chris,not sure I'd do the same were I in your position,but I give you a lot of credit for defending/explaining your club in an open forum.

[Lou_Duran]

For those who have been involved in private club governance (equity, non-equity, or for profit), is information on joining fees, monthly dues, minimums, assessments, etc. fair game for public consumption?  Is offering the same deal to all prospective members with exceptions for age and membership levels a Must Do or a nicety?

As an aside, the world would be infinitely better if we all had SL Solow's understanding of "one's word', and more importantly, that it prescribed our behavior in all but the most desperate situations.

[Carl Nichols]

Mike;  The title of this thread is somewhat misleading.  If the question is whether we can/should discuss the viability of various models for private clubs on a theoretical basis, supplementing the theory with real world applications  (perhaps without identifying the club) then that is at least tangentially related to architecture and it should be fair game.  

I tried, it would not fit !!

Has anyone under 45 years of age posted on this thread?

That is the segment that golf is not reaching, and let's not even talk about women!

Yes . . . although I'm just barely under!

Chris's list of 10 questions are pretty close to the ones I've discussed with the savviest of our club's prospective members.  It's pretty amazing to me, however, how many don't seem to ask any of these questions.   

[JESII]

What is the problem with supporting golf in the big picture as opposed to worrying about a dying model of private clubs that are short members by 20-30% on average?

Mike,

Not exactly sure what you mean by this...can you clarify? I'm just a dense public school kid...

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