Lou Duran,
I feel compelled, out of the goodness in my heart, to call you on this one. I just checked the Forbes 400 list of wealthiest Americans for the years 2000 and 2010.
According to Forbes, Gates was worth $63B in 2000, but only $54B in 2010. So he's down 14% or so over the last decade, like the rest of us.
The S&P 500 was around 1450 in September, 2000, and is around 1250 now, which is also a 14% drop in value. He would have to take some significant capital gains to diversify (now 15%), but Washington state has no state income tax.
Bless your good heart Mr. Kirk. Maybe after planning his estate and taking many billions of his hard earned dollars from the reach of the "Death Tax" Mr. Gates is now comparatively poorer at $54 Billion. Mind you, I bear no grudge against the man- I actually greatly admire him but for one thing: his well-publicized desire to codify his preferences on the dispostion of wealth into law. And I have no dog in this fight as I will inheret nothing of significant monetary value or will likely leave an estate to my heirs that would warrant the attention of your sort. Not only from a "fairness" perspective, but more so from a moral foundation, I claim no right to the fruits of anyone else's wealth, their property, and to do as they will with it.
That said, perhaps my thoughts on Mr. Gates' expanding wealth are misinformed. However, using available metrics, he remains near the top of American wealth. Even without any necessary adjustments for his expenditures and charitable giving, you suggest his wealth "declined" in step with the economy (using the S & P as a proxy). As of closing yesterday, I am down 36% on my MSFT investment, with the largest part of it being made in the mid-late '90s as I recall (reinvesting dividends for most of that period). Again, I am not assigning blame to Gates; no CEO ever put a gun to my head and forced me to buy stock in their company. If I am frustrated, it is of my own doing, and regret bringing it public here. Sorry.
Quote from: Jim Nugent on Yesterday at 07:45:13 PM
According to the News Tribune, "Chambers Bay finished 2009 with a deficit of $1.3 million on revenue of $5.5 million. One reason: fewer golfers willing to pay up to $169 for a round of golf.
According to its latest financial report, golfers played 31,834 rounds in 2009 – 17 percent fewer than the previous year. The course budgeted for 36,372 rounds in 2009. In addition, food and beverage sales declined 15 percent. Merchandise sales were down 22 percent."
Average revenue per round was around $172. That includes food, beverage and merchandise sales. But they needed another $40 per round to break even. Interesting that even the 36,372 rounds they budgeted would still have brought a loss, assuming peripheral sales stayed the same per person.
At costs of $6.8 million, we can figure out how many rounds they needed in 2009 to break even at various price points. The prices include food, beverage and merchandise sales. I'm assuming costs stay the same, no matter how many rounds they handle. (They may not.)
At $100 a round Chambers Bay needed 68,000 rounds. At $75, it needed over 90,000 rounds.
$6.8 million in costs seem real heavy to me. Wonder what that includes, and how they could bring the figure down. Great information here Jim. Like our budget problems at various levels of government, the focus should be on the spending side, yet the inclination is to focus on revenues. A return to a more normal economy will help revenues, but not nearly enough to reach BE. It would indeed be interesting to have an unobstructed look at the books, but as Archie Struthers noted in another thread, the transparency we should demand of public expenditures and are required of publicly traded companies is not likely. My bet is that the $6.8 Million includes a bunch of non-golf related political functions as well as others that do little to contribute to the bottom line.
I am astounded that the course did over 38,000 rounds in 2008. Maybe ratings do drive volume, but then it is up to the course to capture those first time players. I wonder if this figure includes non-revenue rounds, and what percentage is attributed to corporate outings. I would have thought that 38,000 rounds would be at the upper end of the range once operations are stabalized. In that environment, I can't see much upside on # of rounds, so essentially variable pricing strategies may be counterproductive, which means that revenue measures are nearly impossible.
One other consideration is that the course will one day need a permanent clubhouse. If the course in its current form cost $21 Million- though we don't know how much of this includes the cost of remediation and site preparation- how much will the new clubhouse set the good folks of the community back?