Insolvency expert says some golf club committees need to be more professional

Alistair Dunsmuir
By Alistair Dunsmuir February 25, 2020 07:02

An insolvency expert that has dealt with two golf clubs that closed down in recent months has said committee members of some clubs need to be ‘more business-like about running costs’.

Maureen Leslie, director of MLM Solutions, said there will be more closures unless this happens.

MLM Solutions recently managed the sequestration and sale of Eastwood and Mount Ellen golf clubs in Scotland, which both closed due to financial difficulties.

She said: “Golf and other sporting clubs run by volunteer committees are facing testing times. There’s significant evidence that subscriptions are falling, yet costs may be staying broadly the same. Office bearers need to be very careful to protect themselves, should operating figures no longer add up.”

Leslie told how the volunteers on one bankrupt club’s committee were pursued for money by a catering supplier.

She added: “This is not the norm and it would be tragic if individuals were to be put off volunteering on the basis of personal risk. However, it is a salutary lesson for office bearers, who need to be mindful of their personal standing under the law. A worrying run of insolvencies recently is a wake-up call for clubs to remember they must be run as a business in order to survive”.

MLM said clubs should not wait until all hope is lost before calling in restructuring and insolvency practitioners who can identify where costs, jobs and businesses can be saved.

Colleague Barry Mochan added: “The first signs of danger appear in cash flow – where falling membership or reducing subscriptions lead to difficulties in paying bills. At that stage, office bearers need to be tough and accept that they cannot keep offering services at traditional levels if income has been reduced.

“Many clubs resist the idea of restricting bar hours to profitable periods, for example, and see themselves crippled by unsustainable staff costs as a result. Similarly, there are deals to be done on leasing equipment, rather than buying it, which can save cash-strapped clubs a lot of headaches. Most of all however, clubs need to be creative in responding to changing social demographics. There’s plenty evidence that the ‘old’ norm of taking four hours on a golf course is less suited to the faster pace of contemporary life.

“Expensive memberships fall away as many golfers opt to spend larger amounts on playing elite courses occasionally, over buying annual subscriptions they might not be able to use. This becomes a vicious circle for local clubs who have less to spend on maintenance on facilities and can become even less appealing over time.”

Mochan said: “It’s been a torrid time recently for golf clubs. The fabric of society is undoubtedly changing but we would all be poorer without places which encourage fellowship, leisure and social interaction, as well as opportunities for exercising outdoors. This is a time for actively managing change – not for giving up on the game.”

A spokesman for MLM added that clubs should consider being creative with membership models to allow greater flexibility and using club facilities to the max, both to maximise income from social and leisure events and encourage wider and younger membership. They could also consider the value of land to developers if the course is in a prime location, and ask whether this might allow relocation and investment in a new course.

 

Alistair Dunsmuir
By Alistair Dunsmuir February 25, 2020 07:02
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9 Comments

  1. Stuart February 27, 12:34

    Couldn’t agree more!!

    Reply to this comment
  2. Pete USA February 25, 17:07

    Your thinking on the game is antiquated and not evolving with the times. Look, you want to attract new people, not repell them! That’s what is happenening by offering the same old boring, time consuming, expensive, difficult, etc. game of our fathers era. Today, to get the new generation involved, golf has to be streamlined for quick, enjoyable and affordable play, which means smaller course size, making the game inviting, time efficient, affordable, fun &
    conforming to the modern standards.

    Reply to this comment
  3. Martin February 24, 10:23

    Totally agree. In 5 years, Eaglescliffe Golf Club moved from a £53k loss in 2014 to a £40k profit in 2019. If you run a club as a business then you can turn it around. The key is to look at everything and anything; and if it makes financial sense to change something, then do it.

    Reply to this comment
  4. Svend February 24, 08:56

    There are great opportunities for our golf clubs to become community hubs that are more than just a place for golf. Many of them are in great locations and if they open themselves up to the wider, non golf playing community, they will become community hubs, embracing everybody.
    We are planning to run a Community Golf Enterprise Summit in England in September where we will bring together change-makers in community golf to exchange ideas and experiences on how to create vibrant, visible and viable community golf enterprises.

    Reply to this comment
    • Andy February 24, 11:57

      A mix of golf club, housebuilder, commercial golf range operator, family health club operator, drive through retail is the future of this as opposed to NGB driven process which on the whole creates a white elephant. Be good to see more of these events unfold so councils can spend their lending on adult social care as opposed to large new buikd leisure centres that are are still designed the same way as 50 years ago,

      Reply to this comment
  5. Tim February 21, 12:42

    If you work in the industry you know that however if as manager you allow it to happen under your watch then are you complicit in their failings as well? We are now professional managers not just retired people doing something to fill time.

    Reply to this comment
  6. Gareth February 21, 12:24

    A good read, but not one that would surprise most #golfclub employees who know the industry as a whole

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