2011 GCA market value ?

[Mike_Young]

Anyone have any idea of what the total revenues for golf design in the US are for this year?  I bet there is not one 1.5 million fee out there right now.  But if you include masterplan fees and percentage of construction fees I guess the US market is down to maybe $7.5 million and will get smaller.  Any wild guesses.  

[Michael Goldstein]

Mike, if this is true then it makes some numbers from the far East absolutely staggering.

One outspoken player-come-architect has supposedly pocketed up front 14m for a design fee on a 54 hole project that has stopped.

[Mike_Young]

Mike, if this is true then it makes some numbers from the far East absolutely staggering.

One outspoken player-come-architect has supposedly pocketed up front 14m for a design fee on a 54 hole project that has stopped.

I'm talking US.  But Mr PM may be saying he has pocketed 14 mill but I bet he never sees most of it. 

[Tom_Doak]

Mike:

I'm thinking your number is low, based on our own fees ... of course, the line between design and shaping is sometimes blurred in our own figures.  I will look up our results for you tomorrow, don't have them handy.

Don't be shocked if Mr. Phil did get paid a lot of his money up front ... presumably that's the only way to be sure most Chinese clients pay, and Phil's agents aren't stupid.  I guess I wish I had clients that stupid, though. 

[Mike_Young]

Tom,
I'm thinking there are no more than 150 Masterplans out there to be done at an average of $25,000.  And maybe 20 designs at an average $250,000.  BUT as you say...no counting shaping fees etc.  I have seen some masterplans going at $10,000.

As for PM...I'm told he got the big deal but did not get the cash yet.  But you know that market better than myself.

[Lou_Duran]

Anyone have any idea of what the total revenues for golf design in the US are for this year?  I bet there is not one 1.5 million fee out there right now.  But if you include masterplan fees and percentage of construction fees I guess the US market is down to maybe $7.5 million and will get smaller.  Any wild guesses.  

Such optimism!  There does seem to be quite a bit of renovation/restoration work going on locally.

It reminds me of residential real estate when the "$1 Million Producers" got their pictures in an ad in the newspaper.  Assuming a normal 6% commission which is most often split with another agent and then split again with the broker, that $1 Million agent made between $15,000 and $20,000.  I think that the 30/70 rule might have been closer to 10/90.  I wonder what it is in golf architecture. 

[Tom_Doak]

Tom,
I'm thinking there are no more than 150 Masterplans out there to be done at an average of $25,000.  And maybe 20 designs at an average $250,000.  BUT as you say...no counting shaping fees etc.  I have seen some masterplans going at $10,000.

As for PM...I'm told he got the big deal but did not get the cash yet.  But you know that market better than myself.

Mike:

Do you think there are 20 new golf courses actually being built in the U.S. and actively paying their design fees now?  I'd guess fewer.

FWIW, I just looked at our revenues for 2011.  U.S. design fees are around $700,000 for the year ... that's for finishing one project, starting another, one big master plan, and several ongoing consulting visits.  I didn't break down all the numbers but I'd guess that's 1/3 of our revenues, overseas design is a bit more than 1/3, and shaping is a bit less than 1/3.

The % of overseas work looks like it's destined to be much higher in 2012, for us at least.

[Adrian_Stiff]

I just lost a 9 hole par 3 design and supervision, I quoted £22,000 $35,000 and somebody did it for nearly half that. I also just quoted £100,000 $160,000 for a full 18 hole design supervision and including my shaper for 100 days, excluding the shaper the client was expecting $10,000 for the whole job. In the UK there is virtually zero work. I looked at an opportunity 30 minutes from St Andrews a month ago but its hard to make the numbers work.

[Mike_Young]

Tom,
I'm thinking there are no more than 150 Masterplans out there to be done at an average of $25,000.  And maybe 20 designs at an average $250,000.  BUT as you say...no counting shaping fees etc.  I have seen some masterplans going at $10,000.

As for PM...I'm told he got the big deal but did not get the cash yet.  But you know that market better than myself.

Mike:

Do you think there are 20 new golf courses actually being built in the U.S. and actively paying their design fees now?  I'd guess fewer.

FWIW, I just looked at our revenues for 2011.  U.S. design fees are around $700,000 for the year ... that's for finishing one project, starting another, one big master plan, and several ongoing consulting visits.  I didn't break down all the numbers but I'd guess that's 1/3 of our revenues, overseas design is a bit more than 1/3, and shaping is a bit less than 1/3.

The % of overseas work looks like it's destined to be much higher in 2012, for us at least.

Tom,
Probably fewer but I was guessing on the high side...
I guess it is all how one describes it.  For example.  I  have one bunker rework with a few greens and some practice area improvements.  Since we will shape it and build it the total for everything is around $400,000.  BUT the amount that I could truthfully allocate to design is no more than $20,000.  So I say I have a $20,000 design job.  All of my work is overseas and seems it will be.


And I think in the US it will continue to be where builders and architects will both be competing for the same projects. 
I think the market value number for construction in the US is much lower than people realize.  I would wager there are not five 5 million dollar construction budgets happening in the US right now.
I know one of the large turf product companies was down close to 40 percent on sales.   I think the day of the cad jockey/rolled plans in hand photo op architect is done. 

[Randy Thompson]

History seems to repaeat itself. Reading the article posted last week on Dick wilson stated that Mr. Wilson had to take a job away from Architecture for a period a couple of years. They also talked about the early sixties boom of 300 courses per year being built in the USA. Renovations will allow a few to keep their heads above water, as China will also but its going to be a long haul after so many golden years. Most of the big name architectural firms have really had to downsize and the trend will probably continue. The most sucessful of these has been Gollden Bear but there fees have to be going down or will be going down in the near future. I know there quanity of new projects have dropped considerably, as well as their staff. If there is not the money in golf design as in the past will somebody like Jack N look for other ventures? He´s got to be getting tired. Will the market continue to absorb private jets cost in the future? Or maybe he has been bitten by the bug and loves what he does and like the majority of us, will continue until he can no longer eat.

[Tom_Doak]

Randy:

If it gets to the point where Jack Nicklaus can no longer eat, the rest of us will be long gone, or have starved to death!  But, Jack's got plenty in the bank ... not to mention endorsing everything from water to wine.  I don't think he will be as dedicated as some of us when it gets to starvation wages.

[Mike_Young]

Randy:

If it gets to the point where Jack Nicklaus can no longer eat, the rest of us will be long gone, or have starved to death!  But, Jack's got plenty in the bank ... not to mention endorsing everything from water to wine.  I don't think he will be as dedicated as some of us when it gets to starvation wages.

Those guys will do what their agents say do. If the agents see there is no golf design then you will see them setting up management companies where they will brand existing country clubs and the new hype will be teaching centers at the back of the ranges...possibly JN golf cars similar to the Eddie Bauer Ford Explorers etc.....the agents have had a gravy train w golf design and will find another source...watch....IMHO

[Don_Mahaffey]

Mike,
I think you're right, but don't you think JN actually likes designing golf courses? I know he commands a big fee and all, but I'm not so sure he's only in it for the $$$.

[Mike_Young]

Mike,
I think you're right, but don't you think JN actually likes designing golf courses? I know he commands a big fee and all, but I'm not so sure he's only in it for the $$$.

Don,
Don't get me wrong.  I  think JN is one of the few pros that actually gets into it ....BUT remember he sold the compnay a few years ago for around
$150 mill.  I think the kids all got a share and he has a new guy sort of telling him what to do from the scoop I keep hearing.  BUT rememebr these guys all do as the agents tell them.  The agents get the deals wheter it be golf course, clothing line or whatever.  For example notice how every guy that ever won a major now has a line of wines....

[Randy Thompson]

Tom,
I agree but think more along the lines of Mike, if there is no gravy money in design then, they will look else where, one market closes but another one will open. I don´t think he is personally worried about money but he carries a lot of his family on his shoulders and would like to leave them set and has tried to do so with the design company by offering different prices by having his kids involved in different projects.

[michael damico]

I think the day of the cad jockey/rolled plans in hand photo op architect is done. 

Mike,

going into the industry I was not interested in the business side as much as I have really began to ask questions over this past year, but I can safely say that there are a couple archies that are still clawing tooth and nail to hold onto the 'habits of old'. Don't get me wrong, (and I pray you are absolutely correct) there are probably a significant amount less of these 'traditionalists', but don't rule them out entirely.

[Mike Nuzzo]

Mike

Did you count the courses that have been designed and shelved?
There will be some new courses to get built that were designed several years ago.
I bet those will be really good....

I am not a fan of most of the work that came about based on the model you describe.
The regional guy is often even more inbred than the average national guy.
inbred = no influx of creativity for design/process/construction/maintenance (other than some pretty magazine pictures)

Cheers

[Mike_Young]

Mike

Did you count the courses that have been designed and shelved?
There will be some new courses to get built that were designed several years ago.
I bet those will be really good....

I am not a fan of most of the work that came about based on the model you describe.
The regional guy is often even more inbred than the average national guy.
inbred = no influx of creativity for design/process/construction/maintenance (other than some pretty magazine pictures)

Cheers

Mike,
I'm not sure some of those courses designed several years ago will get built because it just doesn't make sense.
As for "inbred = no influx of creativity for design/process/construction/maintenance (other than some pretty magazine pictures)"
Well any industry with an organization that makes an attempt to restrict trade over the last 50 years will always provide an industry with it's share of incompetence even when there are some good ones.