August, 2014: Golf Channel’s Acquisition Spree Continues

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This edition of “New News,” is written for the 8% of the golf course industry that is willing to embrace change and take individual responsibility for the financial performance of their facilities.  We take you behind the scenes of many conversations we have recently had with significant players within the industry.  We share these comments because you might want to be aware of the changing playing field in the business of golf.

Golf Channel’s Acquisition Spree Continues

With the recent partnership of Golf Channel and Crescent Systems and very preliminary discussions with Active Network, Golf Channels continues its thrust to extend its market share.  Here are three things that you, as a golf course owner, should monitor:

-The release date announcement for the G-1 tablet-based POS system.   The promises for the software to enhance customer service and reduce labor costs are fantastic.

-Benchmark the number of golfers, currently estimated at 7.5 million that are Golfnow.com customers.   As that number increases, it provides increasing opportunities for your to attract and cultivate new golfers for your course.

-Your “course times sold” versus “trade times sold” ratio.  With 10 to 1 ratio, Golfnow.com is a viable alternative.  If the ratio falls below 3 “course times” to 1 “trade time,” you should explore whether you are using the software properly or if this distribution channel may not be appropriate for your golf course.

The heavy negative resistance from many industry observers continues.  The question may be, as the expression goes, “Is the problem ‘with the archer or the bow’?”  Translated:  it is often easier for golf course operators to whine about uncontrollable factors than to understand that their woes lie in their inability to execute.

It is our opinion that if a golf course has integrated its tee sheet with the POS system and focuses on effectively building a customer database, Golfnow.com remains one of the many available alternative distribution channels to create incremental revenue.  The key benchmark is “REVPAR” = revenue per available round sold based.

Multiple Well Funded Players Now Looking to Take on Golfnow.com

Maury Gallagher and Tim Flynn (founders of Value Jet and Allegiant Airlines) have been beta testing for the past five months a new software solution at DeLaveaga Golf and Lodge in Santa Cruz, CA.  A leading PGA golf operator was flown to Las Vegas in July to vet the new concept based on an airlines commission model.  The code is being developed; we were told, by a Purdue University graduate in the MIS department of Allegiant Airlines.

Note that Tim Flynn was affiliated with Golf Switch, which changed ownership in January, 2014.   It is amazing that the Boulder, Colorado based buyer of Golf Switch did not insist on a non-compete clause.

PGA Tour Vetting Concept to Launch Tee Time Network.  Lance Stover at PGA Tour headquarters, on recent conference call with PGA Tour properties, we understand the concept developed for offering a national tee time network got rebuffed by their golf course operators.

Knowledgeable outsiders comment that the PGA Tour may be too slow and bureaucratic to figure out a meaningful solution to compete against Golf Channel.

We remain amazed that very wealthy and very smart people presume that because of prior business success, those models can easily be applied to the “business of golf.”  Oh, if it were that simple.

NGCOA Seeking Answers to Bartered Tee Times

While trying to rebuff Golfnow.com initiatives to sell their members inventory at discounts, in late 2013, the NGCOA formed a task force to identify alternatives and to select a preferred vendor through which their members could offer tee times nationally.

Before the four vendor presentations were conducted by the Task Force during Golf Industry Trade Show in February, 2014, management of the NGCOA met with Golf Channel leadership hoping to obtain financial sponsorship for the Association.

During July, the NGCOA resumed discussions with Golf Channel.

Do Associations Believe Only They Have the Answers?

Our goal is simple:  to provide insights and perspectives based on academic research and field studies to you, a golf course owner, and to students seeking a career in our profession.  We seek to create value for your golfers on a foundation that will optimize the financial performance of your golf course.

We remain chagrined that the PGA Education Department appears to seek answers to the industry’s woes only from within.

You would think to ensure that their educational programs are competitive, they would review strategic plans written by PGA Professional Golf Management Programs students, such as the one completed at Clemson University for the Trails at Chickasaw.  You would think that they would seek to review the curriculum, case studies, and test bank of questions used by 15 other educational institutions offering a professional golf management program.  The PGA Education Department has chosen not to download from an FTP site these documents provided to them that may strengthen their educational offerings.

Perhaps it is an inherent bias Associations have regarding the quality of their work as to why the PGA’s Education Department appears to operate with very “narrow input.”

To illustrate, Jim Singerling, departing Chief Executive Officer of the Club Manager’s Association in America told me in July, 2009 in the Congressional Building in Washington, DC during a sponsored golf lobby, “The only people qualified to teach CMAA members are those who have a Ph.D. from accredited large universities.”  Go figure.

We will continue to take the approach offered by Malcom Gladwell in his book David and Goliath.  Gladwell writes about a “Five Factor Model” for success is based on openness, conscientiousness and a certain amount of disagreeableness.  He writes, “All progress deepen on the unreasonable man.”   And so, we will continue our efforts to open the doors to improve your probability for success in managing a golf course.

On J. J. Keegan and JJKeegan+:

Rob MacGregor, CPGA Professional, writes,

“Absolutely a joy speaking with someone who has the same, albeit advanced, ‘mindset’ on our business/game/sport.  I thoroughly enjoy our chats and tapping into your knowledge and experience.  Your products are the best, without question and I read your latest edition book, over and over.”

For a preview of Rob’s course in Ft. McMurray, Canada, click here.

Peter Nyber, General Manager of Bro Hof Slott, writes,

“You are a genius!  Your brain can only be compared to another great one in Bro Hof.  Thank you once again.  Your book is great.  You know the business and there are many things in the book that make me smile.”

If you would like a copy of the book at a 50% discount, click here, and enter discount code, WHY50.  By the way, when you visit Sweden, Bro Hof Slott is a must-play course.  Finest greens I have putted on in a long while.  Fabulous work by Bruce Charlton of the Robert Trent Jones, Jr. design firm.

From late July through mid-August, we are traveling to eight countries in Europe studying their business models for golf courses.  The research will be publish in forthcoming newsletters and in our next book, “The Business of Golf – International Edition.”  Our goal is to publish by mid-2015.

We hope you join us on the path to success as a few spots remain in the Fall Webinar series.  Click here to register.

Thank you for taking a moment to read this slightly long newsletter.

J J Keegan Signature

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