Feasibility Study on Merion

[Kevin_Reilly]

Rich, just poke around on the USGA website a bit...their financial statements are public record.

[Rich Goodale (Guest)]

Thanks, Kevin.

[Jamie_Duffner]

Please excuse my ignorance, but how does the USGA lose money on the Mid-am, Public links or for that matter, the Amateur?  For starters, don't they get a lot of entry fees alone?  These events are now picked up on TV, that's a fair amount of cash.  There are spectators, although not many, but the Amateur is growing.  Finally, what do they actually do for setup?  There are no large infrastructure requirements.  So how do they lose money?  They show up at generally a private club, hold the event, collect tv revenue, and leave.  What exactly are the expenses?

I suppose another problem for decreased attendance at Merion would be decreased merchandise sales.  I think at Bethpage the merchandise revenue was staggering.  Then again, the 09 open is back at the black, which will reap a financial windfall for the USGA, so maybe they  can take a financial risk in 2010.

[Daniel Wexler]

Agreed with Geoff, Tim, etc.

I think something like this is generally about the USGA trying to convince itself that it's own (lack of) policies hasn't rendered the Merions of the world obsolete.  I too rather doubt that they'll select Merion in the end-- but I'm pretty sure they'll feel much better about themselves having done their study.

[Patrick_Mucci]

Jamie Duffner,

Most of the USGA events picked up on TV are part of the
USOPEN package, not seperately negotiated events.

Spectators for the amateur events are not charged by the USGA.

[ChipOat]

Jamie Duffner:

To elaborate on Patrick Mucci's FACTS regarding the USGA TV deal.

All events besides the Open are televised because the USGA insists on it.  No network gets the Open at any price without agreeing to televise the Amateur, Mid-Am, Walker Cup, Women's Open, etc.  The ratings on those non-Open events are terrible and the networks would never pay to televise any of them on an "a la carte" basis.  Even the men's Senior Open isn't profitable.  The purpose of the USGA commitment to televising those non-Open events is to get national TV exposure for them.

In fact, the USGA would get more $$$ for the Open's TV rights if they DIDN'T insist on the other events being televised.

The USGA (and the networks) absolutely do lose money on every event other than the Open.  In fact, so do the host clubs for those non-Open events.  The program ad sales and ultra-modest corporate tent opportunities (if any) simply don't cover the costs to the clubs in spite of all the volunteer labor by the members.

[Rich Goodale (Guest)]

Chip, et. al

If the USGA nets $33 million from it's championships and all others but the Open lose money, can we assume that it nets more that $33 million from the Open?  If that is the case, which seems obvious from THE FACTS, I just wonder how much money Augusta nets each year for the Masters?  I would think it would be higher than $33 million, given the higher TV ratings and (probably) better demographics.  If there are 300 members at ANGC, then it looks like each of them is getting a $100,000+ annual top up to their social security benefits.  Am I missing something?

[brad_miller]

FYI, if my information is correct, Prairie Dunes made a small profit from the Women's Open, less than $100,000. My understanding was that they had approx. 100,000 "patrons" over the term of this event, this would be close to the limit for this property.

[Patrick_Mucci]

Rich Goodale,

The money made from the ENTITY "The Master" remains within that entity and does not flow to the entity, "ANGC".

[Kevin_Reilly]

Rich, I would imagine that the USGA makes a lot of its profit on corporate hospitality (tents).  I don't believe there are any or many of those at ANGC.

[Patrick_Mucci]

Rich Goodale,

Is the relationship between "The Masters" and "ANGC" much different from the relationship between the USGA-USOPEN and the hosting club ?

[SBell]

The Masters pays for the maintenance of Augusta National. Doesn't the host club pay the upkeep of its US Open course? That would be a rather significant difference.

[ChipOat]

Brad Miller:

Assuming your info is correct, that's surprisingly good news.  Perhaps the costs of tournament production is significantly lower in Hutchinson, KS versus the Boston, NY and Philadelphia areas - my only source of data on the subject.
I know folks in Mamaroneck, NY plus Ardmore and Bethlehem, PA that say they couldn't duplicate that feat.

[Rich Goodale (Guest)]

Kevin

Could be, but that's a helluva lot of hospitality.  It would be nice to get a breakdown, however, since we are all "members."  (Kinda like M&M Enterprises in "Catch-22.")

Patrick

I don't really care if there are one, two or 37 entities involved, if they all have the same "ownership" (i.e. the ANGC members), which I assume they do.  Or, is "The Masters" owned by some other mysterious group of people?

Of course the relationship they have to their course is different than the one that the USGA would have to a host club.  Try harder questions next time.

[TEPaul]

It would be very interesting to see exactly how the apparent "two separate entities" of ANGC (a private club) and the entity of "The Masters" are structured and kept separate and what flows into what.

It's my understanding (I'm certainly no lawyer) that generally a "private" club can take in only a certain percentage of it's income from "outside sources". Failing to do that a club would probably be in danger of violating and potentially losing  its "private" status (and all that goes alone with that--like keeping out women).

Certainly the Masters Tournament must be played on the golf course of ANGC the private club but it would be interesting to see how a judge might view income from the Masters tournament that was pumped into the golf course and apparently inuring to the benefit of the club's private members! Afterall, the Masters tournament is only one week a year and the course is open for the members benefit the remainder of the year with the exception of being close in the summer.

It is apparently a fact that a massive amount of money was poured into the alterations and maintenance of the golf course in 2001-2002! And I do mean massive! Where did that money technically come from? Did it come from the members or did it come from the Master's income (separate entity) or a bit of both?

That to me could be somewhat of a redflag and I'm sure this year and in the future the private entity of ANGC will be very careful about that situation!

As for the USGA and an Open host club's arrangement I'm not sure except for one site where the arrangement was the USGA leased the course from the club (for what exact time period I'm not sure).

[Kevin_Reilly]

Kevin

Could be, but that's a helluva lot of hospitality.  It would be nice to get a breakdown, however, since we are all "members."  (Kinda like M&M Enterprises in "Catch-22.")

At Pebble in 2000, there were 120 corporate tables in the pavillion area at $35K per table.  There were 60 corporate tents at, say on the light side, $150K per tent.

Then there is all the merchandise sales, admission (much more expensive than the tickets at the Masters) etc etc.  The money adds up!!!

[TEPaul]

The money they take in from all that stuff does add up indeed but the more interesting question is where does it go?

[Patrick_Mucci]

Rich Goodale,

You didn't use the word "assume" did you ?    

They don't have the same ownership.

I think you'll find that the general relationship isn't much different from the USGA-USOPEN / HOST CLUB relationship.

With respect to harder questions, I'm recalling my college chemistry/physics classes with respect to the Azumuthal quantum numbers associated with sub-atomic particles and will get back to you.  Are you sure you want to do this,
or would you prefer that we stick to architecture ?  

[TEPaul]

Hey Pat, those azumuthal quantum numbers associated with subatomic particles--do you think they have anything to do with dropping par on a finishing par 5 or maybe moving a gate and getting some more tee length?

I'll bet they do. I'll bet they're downright essential!

[Patrick_Mucci]

SBell,

"The Masters" does not pay for the year-round daily maintainance of ANGC.  How did you come upon that tidbit ?

[Patrick_Mucci]

TEPaul,

Only you could see what I was allluding to.

The relationship of the sub-atomic particles orbiting the atom is in fact, not dissimilar to the relationships between the existing 18th tee, the 17th green, the proposed 18th tee, the gates, and my proposed 18th tee.

And, any orbital deviation will have the same effect as moving the gates.

Unfortunately, it will take a cataclysmic event to trigger both.

[TEPaul]

Does anyone on here really know what the Masters tournament income pays for or doesn't pay for on the ANGC course?

I would seriously doubt they do.

But the larger and far more important question has to be is Martha Burk going to somehow try to find out?

[TEPaul]

Pat:

It's just astounding to me that you can play as good golf as you do with all that's going on in that head of yours!

[Patrick_Mucci]

TEPaul,

That's the secret.

The moment I start to think about my swing, or its component parts, I'm cooked.  

A mind that is occupied by impure thoughts is the best mind for playing golf.  

[TEPaul]

NO COMMENT!