Assuming no debt, what should be the cost per round at Ballyneal?

[John Kavanaugh]

Ben,

In defense of Jay I don't think what he said was gallish.  He simply became confused on what he paid at Dismal and thought it was a poor value.  Given that he played sometime in 2006 before the course was adjusted from opening day mistakes the $237.50 probably was in the universe of poor value.

The truth of the matter is, is that I am grateful for the mistakes made by Dismal in its opening days. I am also grateful to all the critics who rushed to judgement possibly stifling play and membership sales.  It was a perfect storm that resulted in me first becoming a member in a manner I found affordable and then Chris purchasing the course where he felt comfortable as an investment.

All I can hope is someday when I am but a humble visitor I hear Jay out by the fire recounting glorious stories of bumping the ball to within inches of 13 at the new Doak.

[Kalen Braley]

Ben,

While I'm not interested in getting into the middle of this specific debate....as it pertains to your 1st question....

...its my understanding that the UK model relies Very Heavily on outside/visitor/public access play to keep fees down for the actual club members.  So with significantly lower fees, I can only extrapolate that member cost per round is much lower than it would be otherwise.

The reason, I can guess, why US clubs haven't adopted this model is because most clubs aren't willing to make the change which would no doubt piss off their current members who paid a massive premium to get in. Additionally, I think there are some tax implications that would make it more difficult to switch.

But overall, it seems kinda like Social Security in my mind....sooner or later some big changes will be needed or the entire thing is going to blow up.

[Mac Plumart]

John...

Were you the first GCA.com member to become a member at Dismal?  To my knowledge you are...so, I'll call you the Godfather of Dismal (think Old School)...

and due to our trip out west I became a member, so in the vein of your post...I am just glad that Eric Smith got the two of us together and we collectively scratched our heads at why people hated the course so much. 

Oh well, it all works out in the wash!!

And as far as Ballyneal goes...a course that good will survive...no question about it!!

And Ben...

I doubt your questions will be answered directly, but alas we all know the answers.

[John Kavanaugh]

John...

Were you the first GCA.com member to become a member at Dismal?  To my knowledge you are...so, I'll call you the Godfather of Dismal (think Old School)...

One of the original owners of Dismal who I believe is still a member did come on the site and attempt to defend Nicklaus and the design.  I really liked the guy and hope to meet him someday.  I do not know if he ever still comes here or still has an account.  He was beat up pretty badly by the minimalist army.  Which reminds me of the old joke..Do you know how you defeat a minimalist army?  Flush twice.

I do think I may be the first person to be a member of GCA before he was a member of Dismal.

[Mac Plumart]

So, I'm sticking with The Godfather. 

 

[Lou_Duran]

Unless you are speaking in terms associated with membership to a private club, your personal feelings of what you'll pay to play as a guest have very little do with the actual question posed.  This is a finance question posed by John to spark debate about the lengths people wiould be willing to go to be a part of something like BN.

Really.  You know Kavanaugh's mind, do you?  Before midnight or after?  You might tell John so he knows as well.   I can tumble the numbers with most of you here and there's absolutely no way I could do justice to the alleged subject matter if, indeed, that was what Barney was trying to accomplish.  Actually, from an economics and finance perspective, what potential guests are willing to pay is of great consequence here.  Both clubs appear to welcome outside play, and, I suspect, even when they reach their membership objectives, they will continue to do so.

[Brett_Morrissy]

Mac,
Isnt the new course at Prairie Club going to be called Old School? Godfather of the Old School?

Perhaps Godfather of Dismal River Concrete Boots?

[Greg Tallman]

My gracious, if i tried to look at the cost per game I spend to attend my WVU games in the same manner some are laying forth here I would probably require a new pair of shorts rather quickly. A new accountant for certain.

People will pay for that which they love and hold dear. 

[John Kavanaugh]

Unless you are speaking in terms associated with membership to a private club, your personal feelings of what you'll pay to play as a guest have very little do with the actual question posed.  This is a finance question posed by John to spark debate about the lengths people wiould be willing to go to be a part of something like BN.

Really.  You know Kavanaugh's mind, do you?  Before midnight or after?  You might tell John so he knows as well.   I can tumble the numbers with most of you here and there's absolutely no way I could do justice to the alleged subject matter if, indeed, that was what Barney was trying to accomplish.  Actually, from an economics and finance perspective, what potential guests are willing to pay is of great consequence here.  Both clubs appear to welcome outside play, and, I suspect, even when they reach their membership objectives, they will continue to do so.

Lou,

The purpose of this thread was to openly discuss the costs associated with buying one of the finest clubs in the world out of foreclosure.  I knew I didn't want to do it but now I know better why.  For years members of this site have discussed owning a club.  Ballyneal may be that club given its current perils.  I just don't believe I am the only one whose mind it crossed.

My initial question, perhaps poorly phased cloaked in perceived sarcasm, was what is the cost per round that an owner would need to break even.  I stupidly thought it to be $150.  Today I think much more.

Just this week I was trying to explain to a fellow member of Victoria that at even $600 per month we are being subsidized.  It's just hard to swallow how much it costs to run a golf course that is presented in an acceptable manner.  Acceptable manner being defined as that which people like Flemma think is a good value.

One more thing, if you don't think it is worth over $200 to play Sand Hills you need to question your own opinions of self worth

[Brett_Morrissy]

John,

So now what do you think the number is now after these pages of posts and info.

Chris said that he starts with a $2m "nut" each year (I am assuming he means by this, that the $2m is the cost to open the doors and first tee and service members and guests in the appropriate manner) and hopefully by the end, he has it covered and a little left over.

I am not sure I can completely grasp how you can assign a number of rounds to to costs, as surely that depends on a vast numb of factors.

Would it be fair to say, that if the starting cost for a 12 mth trading period(irrelevant of how many months the course is open for play) can be established at around the $2m mark, then forecast the number of members and guests required to fund a break even position and then, hopefully sell some additional memberships to cover the acquisition cost - do you, or did you think there would be enough interested parties on this board to be a potential purchaser?

[John Kavanaugh]

Brett,

In the most simple terms, if the nut is $2M and you do 5K rounds the CPR = 400$/R.

I personally think being one of 1500 partners in anything legal is a horrible idea.  This board as a collective can not/should not and will never not not own a course.

Hey, I think Chris is doing great out at Dismal with his investment, he does winter at Jackson Hole after all.

[J_ Crisham]

John, Are you saying you have no interest inbeing a part of Pine Valley and its 1200 plus members? Seems to work well for them so far. If the product is good enough people will travel for it. Quite a few of PVs members are also International guys as you well know. As an aside, how about coming to Chicago on2/22 for the gca dinner?

[John Kavanaugh]

John, Are you saying you have no interest inbeing a part of Pine Valley and its 1200 plus members? Seems to work well for them so far. If the product is good enough people will travel for it. Quite a few of PVs members are also International guys as you well know. As an aside, how about coming to Chicago on2/22 for the gca dinner?

Jack,

I would be a member of Pine Valley but I would not want to be one of 1200 partners owning it at fair market value.  I would guess Pine Valley worth north of $100 million.

I'm sorry but I must decline your generous offer to be a speaker at the Chicago dinner.  I have to say that I do love these winter time events that do not include golf.  They bring out the true lovers of the game.

[Lou_Duran]

The purpose of this thread was to openly discuss the costs associated with buying one of the finest clubs in the world out of foreclosure.

One more thing, if you don't think it is worth over $200 to play Sand Hills you need to question your own opinions of self worth

Now now, John, after 60 years on this earth and a fairly good grasp of how things work, I don't feel pressed to re-examine what value I place on things and experiences.  Perhaps my posture vis-a-vis Sand Hills might be more upscale if I ran a family business that thrived in these difficult economic times.  Alas, I must sit back and admire the guys who have multiple memberships and play the best courses.  I am thankful when I am invited occasionally to join them at a cost that's most always within the price per round range I noted.  Perhaps they are subsidizing my enjoyment of the game; I prefer to think that I am also contributing well beyond the marginal cost of my round to support their clubs, not to say anything of the fine companionship I provide.  

Regarding "buying" Ballyneal, the first thing might be learning what the current noteholder needs to release his lien.  This will go a long ways in determening what CPR will be required, and assessing which business model might make this possible.  The "members" of GCA.com will not be the eventual owner, I don't think.  

[John Kavanaugh]

Lou,

At least when we are paired together our cost per hour is low.

[Buck Wolter]

Being a member at a Destination club I can tell you the cost per round is high but what's it worth to be on golf course with a group of guys where you realize on a June Saturday afternoon  you're the only people on the course. I may be the least likely person to ever join a club like this but it has never crossed my mind that it was a bad idea. It means I haven't been to Bandon but that doesn't bother me at all either. My course allows quite a bit of unescorted play at what is a relatively high fee but the accompanied fee is a bargain ( less than half the unaccompanied) which makes it a real bargain for friends of members but there's nothing wrong with that.

Hopefully we get enough unaccompanied members to move out of the double wide but that doesn't bother me either.

I'm reminded of Kavs prophetic statement that you pay dues to keep people off your club so its available when you want to play ( something like that).

Buck

[Chris Johnston]

Lou and Brett.  

We are mixing peas and carrots here.  The total all-in "nut" is close to $2M but golf fees are but a part of the revenue stream.  Actually there are 3 to 3-1/2: golf, lodging, F&B, and proshop.  At $150 per round alone, we couldn't make it.  On a very rough basis, we average around $450-$500 per guest/day as follows:

Rough per day estimates:
Golf:  $150 avg.  (Members don't pay golf fees as they do pay dues)
Lodging:  $140 avg.
F&B:  $115 avg.
Shop:  $50 avg.

Roughly, breakeven is then $2M/$450 = 4,400 guest nights.
Roughly, we need to average 32 guests per day to breakeven on a 135 day season, late May to early October.
Roughly, the average is 8 foursomes per day, or 4 eightsomes.
Roughly, with 78 beds, we need to average 41% yield for the year.
Roughly, a member brings 6.5 guests per visit.

This is where the lodging and F&B are meaningful to the organization.  The average for golf is for all-day play and, I believe, quite reasonable.

Non member or member sponsored (outside) play is less than 1% of our total yield.

We believe Tom's new course will increase yield.

These numbers are probably close to Bandon and Ballyneal sans debt.  Only difference is I believe Ballyneal has less rooms and a third party owns some or all of the lodging so there may be an additional cost line here.

Like Bandon and Ballyneal, we go out of our way to ensure everyopne has a great time when here.  That is the only reason people join a club or come out.

Those are the basics on a yield basis.  With a yield orientation, we choose not to charge much to join and keep dues reasonable.  And to preeempt the criticsm this isn't promoting anything, its just the model better explained.  People should know what they are joining.

[Peter Pallotta]

On a related note, the hits-per-topic counts that JK, Shivas, and Tom Doak manage to generate each time they deign to start a thread rival in comparative terms not only Ballyneal and Sand Hills but Shadow Creek too.  I think this is an interesting fact, i.e. it seems to suggest something, but I can't figure out exactly what.  

Peter

[Brett_Morrissy]

Posted on: Today at 14:30:20 Posted by: John Kavanaugh
Insert Quote
Brett,

In the most simple terms, if the nut is $2M and you do 5K rounds the CPR = 400$/R.


EDIT: posted this while Chris made his.!
John,
Why do you find it easier or most simple to apply the cost per round model, as it seems to me only relevant post results, i.e. at the end of the financial period being reviewed.

What happens if you get half way thru the period and you are only at 50%of forecast rounds, then the CPR goes up to $600-800 (?) or other such rise, then making the target number and break-even not only difficult but require a change to the business model for the remainder of the period.

Instead of say, (I dont know the numbers, these are just hypotheticals) we have 200 members at an annual sub of $5,000(including a huge house levy to encourage frequent use - say $3,000 sub and $2,000 house levy), we expect all guests, either accompanied or not, to spend $500 over a two night stay as an average, so we need 2,000 guest visits - if they play 72 holes per visit, and then add F&B revenue on top of that, for purchases and casual staff not allowed for in the $2m nut.

That will give you your $2m revenue, plus additional F&B from both members (over their $2k house levy) and guests, say another 750-$1m plus some new member joining fees.
You still got to find upgrades, replacements, build a second course(?), build additional Acc if required, etc but they of course can funded over a much longer period.

Does that work?

[Jay Flemma]

Still waiting for someone to explain how the guest fee at a private destination club has any bearing on what the cost per round should be for a member at Ballyneal.

Still waiting to hear how the cost per round (whether the guest fee or the calculated per round fee for membership) at a private destination club can be bad for the future of golf.

Unless you are speaking in terms associated with membership to a private club, your personal feelings of what you'll pay to play as a guest have very little do with the actual question posed.  This is a finance question posed by John to spark debate about the lengths people wiould be willing to go to be a part of something like BN.

I am surprised by the gall some have displayed on this thread to impose their idea of value onto a PRIVATE LUXURY ITEM!  There is no mutual exclusivity here.  I can appreciate a well prepared meal at a local establishment while also going nuts for my one trip to the French Laundry.  

Ben, you're not gong to get an answer.  You suggested to the board that I be black-listed because I had the courage to say I thought the price was too high.    That's contrary to the mission of GCA.com to promote honest discussion - and that discussion includes price.    It's also not what Ran and Ben envisioned when they started this site.  

People can disagree that a course may be worth "x" without suggesting interfering with someone's profession as a writer or reputation as a person.  

We'll have to talk some other time on some other thread, but you've used all your chits with me on this one after that.  I think you owe a few people an apology.  That was some of the worst form I've seen on GCA.com.

[Mac Plumart]

Lou and Brett.  

We are mixing peas and carrots here.  The total all-in "nut" is close to $2M but golf fees are but a part of the revenue stream.  Actually there are 3 to 3-1/2: golf, lodging, F&B, and proshop.  At $150 per round alone, we couldn't make it.  On a very rough basis, we average around $450-$500 per guest/day as follows:

Rough per day estimates:
Golf:  $150 avg.  (Members don't pay golf fees as they do pay dues)
Lodging:  $140 avg.
F&B:  $115 avg.
Shop:  $50 avg.

Roughly, breakeven is then $2M/$450 = 4,400 guest nights.
Roughly, we need to average 32 guests per day to breakeven on a 135 day season, late May to early October.
Roughly, the average is 8 foursomes per day, or 4 eightsomes.
Roughly, with 78 beds, we need to average 41% yield for the year.
Roughly, a member brings 6.5 guests per visit.

This is where the lodging and F&B are meaningful to the organization.  The average for golf is for all-day play and, I believe, quite reasonable.

Non member or member sponsored (outside) play is less than 1% of our total yield.

We believe Tom's new course will increase yield.

These numbers are probably close to Bandon and Ballyneal sans debt.  Only difference is I believe Ballyneal has less rooms and a third party owns some or all of the lodging so there may be an additional cost line here.

Like Bandon and Ballyneal, we go out of our way to ensure everyopne has a great time when here.  That is the only reason people join a club or come out.

Those are the basics on a yield basis.  With a yield orientation, we choose not to charge much to join and keep dues reasonable.  And to preeempt the criticsm this isn't promoting anything, its just the model better explained.  People should know what they are joining.

As good as it gets.

Thanks Chris.

[Ben Sims]

Ben, you're not gong to get an answer.  You suggested to the board that I be black-listed because I had the courage to say I thought the price was too high.    That's contrary to the mission of GCA.com to promote honest discussion - and that discussion includes price.    It's also not what Ran and Ben envisioned when they started this site.  

People can disagree that a course may be worth "x" without suggesting interfering with someone's profession as a writer or reputation as a person.  

We'll have to talk some other time on some other thread, but you've used all your chits with me on this one after that.  I think you owe a few people an apology.  That was some of the worst form I've seen on GCA.com.

I never said anyone should be blacklisted.  I said it wouldn't surprise me if they were less than hospitable after you question their business model while a guest at their club.  It's up to their members what is an acceptable cost, not their guests.  

Maybe Chris Johnston, Matt Payne, Jagger Mandrell and Dave Hensley would like to hear how their hard work is bad for the future of golf.  I for one would love to hear how Ballyneal and Dismal River are in any way related to the brand of golf that Joe Six-pack plays.  

I gather you won't be writing about how bad for golf the per round price at Augusta is when you're down there this spring?

[Mac Plumart]

Lou and Brett.  

We are mixing peas and carrots here.  The total all-in "nut" is close to $2M but golf fees are but a part of the revenue stream.  Actually there are 3 to 3-1/2: golf, lodging, F&B, and proshop.  At $150 per round alone, we couldn't make it.  On a very rough basis, we average around $450-$500 per guest/day as follows:

Rough per day estimates:
Golf:  $150 avg.  (Members don't pay golf fees as they do pay dues)
Lodging:  $140 avg.
F&B:  $115 avg.
Shop:  $50 avg.

Roughly, breakeven is then $2M/$450 = 4,400 guest nights.
Roughly, we need to average 32 guests per day to breakeven on a 135 day season, late May to early October.
Roughly, the average is 8 foursomes per day, or 4 eightsomes.
Roughly, with 78 beds, we need to average 41% yield for the year.
Roughly, a member brings 6.5 guests per visit.

This is where the lodging and F&B are meaningful to the organization.  The average for golf is for all-day play and, I believe, quite reasonable.

Non member or member sponsored (outside) play is less than 1% of our total yield.

We believe Tom's new course will increase yield.

These numbers are probably close to Bandon and Ballyneal sans debt.  Only difference is I believe Ballyneal has less rooms and a third party owns some or all of the lodging so there may be an additional cost line here.

Like Bandon and Ballyneal, we go out of our way to ensure everyopne has a great time when here.  That is the only reason people join a club or come out.

Those are the basics on a yield basis.  With a yield orientation, we choose not to charge much to join and keep dues reasonable.  And to preeempt the criticsm this isn't promoting anything, its just the model better explained.  People should know what they are joining.

As good as it gets.

Thanks Chris.

BOOM!!!  

As good as its gets.

Thanks Chris.  Keep up the good work.


FYI...I'm trying to keep this thread on a value-added track and away from the internet food fight it was and appears to be headed towards again.  I hope it isn't too obvious.  

[Jay Flemma]

Ben, I'll be writing about the Masters tournament because that's the assignment.

Chris Johnston spoke his opinion on my thoughts on this thread with remarkable clarity...and he respected them politely and had a great exchange of ideas with me.  I look forward to meeting him when I return to COL/NEB.  His positions on what I said are clearly laid out in this thread...and he had no problem with what I said.  He even agreed with it.  I'll go in with open eyes and an open mind as to what's changed.  I only ask you treat me with the same open mindedness.

[noonan]

Lou and Brett.  

We are mixing peas and carrots here.  The total all-in "nut" is close to $2M but golf fees are but a part of the revenue stream.  Actually there are 3 to 3-1/2: golf, lodging, F&B, and proshop.  At $150 per round alone, we couldn't make it.  On a very rough basis, we average around $450-$500 per guest/day as follows:

Rough per day estimates:
Golf:  $150 avg.  (Members don't pay golf fees as they do pay dues)
Lodging:  $140 avg.
F&B:  $115 avg.
Shop:  $50 avg.

Roughly, breakeven is then $2M/$450 = 4,400 guest nights.
Roughly, we need to average 32 guests per day to breakeven on a 135 day season, late May to early October.
Roughly, the average is 8 foursomes per day, or 4 eightsomes.
Roughly, with 78 beds, we need to average 41% yield for the year.
Roughly, a member brings 6.5 guests per visit.

This is where the lodging and F&B are meaningful to the organization.  The average for golf is for all-day play and, I believe, quite reasonable.

Non member or member sponsored (outside) play is less than 1% of our total yield.

We believe Tom's new course will increase yield.

These numbers are probably close to Bandon and Ballyneal sans debt.  Only difference is I believe Ballyneal has less rooms and a third party owns some or all of the lodging so there may be an additional cost line here.

Like Bandon and Ballyneal, we go out of our way to ensure everyopne has a great time when here.  That is the only reason people join a club or come out.

Those are the basics on a yield basis.  With a yield orientation, we choose not to charge much to join and keep dues reasonable.  And to preeempt the criticsm this isn't promoting anything, its just the model better explained.  People should know what they are joining.

I do not have a dog in the fight.

But when pricing your golf....rather it be per round or an all day rate...why would you include F&B?

When you include this there is a cost of goods you have not factored in.

Having owned a recreational business....all F&B is a separate profit center....

And it has nothing to do with the price of our main attraction