Setting a proper course
There are two ways of looking at golf-course-management firms. If your course looked ragged and struggled to make ends meet until a management firm came to the rescue with the know-how, money and resources to shape up the operation, you might view them as miracle workers.
If you thought your course was doing just fine, thank you, until some interloping money managers butted in to tell you how often to water the greens and sharpen the mower blades, you might view management firms as bean-counting busybodies.
So when someone asks if a management firm is right for your course, the answer depends on what kind of management you're getting now. But if you decide your course needs outside help, a good management firm can provide it.
"We have a 42-year-old history of managing clubs and a set of operating guidelines and principles that have been very successful," says Gerry Smith, executive vice president for marketing and communications for ClubCorp International, one of the industry's pioneer management firms. "We bring to a club an understanding of how to run a business."
Fixing what's broke It's unlikely that a golf course with smooth business operations and contented membership will seek out a management firm.
"Courses that are floundering or can't make money on their own are candidates for management firms," says Brian Maloy, an agronomist with the Green Section of the U.S. Golf Association's Mid-Continent region.
That's how American Golf Corporation got its start 30 years ago. David Price founded the company by taking over a financially ailing golf club in Yorba Linda, Calif. He instituted business and management practices not typically associated at that time with golf courses and made the club profitable. The company gradually acquired more struggling properties and used its business model to restore courses to financial health.
As a result, American Golf, based in Santa Monica, Calif., has become the nation's largest golf-management firm, operating more than 300 courses.
Some cities have turned to management firms to run their courses. In Chicago, the park district hired Kemper Sports Management in 1993 to run its six golf courses and two driving ranges. The company upgraded conditions, boosted attendance and turned a money loser into a profitable business.
"Management firms have deeper pockets to make improvements and appropriate repairs," says Maloy.
Size has benefits Management companies also are operating some of the nation's higher-end golf clubs. ClubCorp, based in Dallas, operates more than 230 clubs and resorts around the world, including Pinehurst, the world's largest golf resort and site of the 1999 U.S. Open.
That size gives ClubCorp the clout to get better deals when purchasing equipment and supplies. For instance, earlier this year, ClubCorp entered into a six-year agreement with the Toro Co. that makes Toro the preferred supplier of turf and landscape equipment on ClubCorp properties.
American Golf has adopted a strategy of clustering properties in metropolitan areas to allow more efficient use of resources.
"Firms that have several courses in the same area can share equipment and personnel," says Maloy.
Firms with many courses also offer greater career opportunities for aspiring superintendents.
Trampling on tradition?
But in the conservative and tradition-steeped world of golf, some people grumble about the bottom-line mentality of some management firms. Many golf superintendents with this attitude don't want to be quoted-their course might get bought out one day by one of the firms.
"Working for a management firm often puts the superintendent between a rock and a hard place," says Maloy. "Members want improved playing conditions, while the management firm focuses on the bottom line and finances."
Detractors of management firms contend that they don't have the commitment to a course that gives employees a sense of pride. They are prone to cutting costs drastically to make a profit and forgoing long-term improvements for short-term financial gain.
That's not the case with ClubCorp, says Smith. Although the company contracts to manage some outside properties, it prefers to own the courses it operates.
"We have a vested interest in owning the asset, in growing the value of the asset," says Smith.
Protecting their assets means paying attention to the wishes and wants of club members.
"We want the members to feel it's their club," says Smith. "We know that for clubs to be successful, the involvement of members is critical. We are there to serve their needs and meet their expectations."
That's not to say ClubCorp and other firms haven't imposed changes that can rankle those used to doing things another way. Smith says that historically, private clubs and resorts have been run inefficiently or with loose oversight.
"Our founder, Robert Dedmon, used to say, 'Private clubs are run like nobody's business-they are nobody's business,'" says Smith. "We've turned it into a business."
Amenities or frills? A management firm's business decision might make sense financially, but could eliminate some of the extra touches members have come to expect.
"Some firms may maintain the golf course, but not provide the details that a private club would," says Stan Zontek, director of the Green Section for the USGA's Mid-Atlantic region. "Things like hand-raking bunkers, having flower beds on the course, having greens cut on the weekends."
Centralized decisions, such as mandating what kind of materials to use, can frustrate golf course superintendents. Many superintendents believe they should have more discretion because they know their courses better than managers who aren't there every day.
"It becomes a business decision instead of the health of the grass and the needs of the golf course," says Zontek.
Management firms can offer more than business expertise. For course owners weary of addressing the concerns of often finicky golfers, having a management firm take over your course could provide some relief.
"The management company will have to deal with the complaints instead of you," says Zontek.
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