The wolf in sheep’s clothing may have been exposed.
At GolfNow’s June Business Review Conference, Jeff Foster, SVP, New Media Group, introduces from the Golf Channel Set two apparent employees with stage names of Jay Buzzi and Saler Krout, who, in my opinion, offended clients who provide trade rounds. The video emphasizes GolfNow’s need to make sales quotas.
Now we know how they destabilize the markets and adversely impact the golf course owner’s ability to receive an appropriate green fee based on the experience provided as illustrated here:
|Rounds Sold||GolfNow Revenue||Yield Per Round|
|Transaction Fees and Other Ancillary Revenue||4,849,266||$18,190,602||$3.75|
|2016 Six Month Numbers||7,033,356||$67,587,042||$9.61|
The average trade round sold is at 50% of the average green fee price in the US. Of their 5,000+ clients, 2,200 clients generate 80% of their revenue and are designated as Tier 1, Tier 2 or Tier 3.
I find the video disappointing but insightful of their character. One has to question their intelligence in recording and allowing this sanitized version of the “skit” previously circulating in GolfNow’s offices to see the light of day. It reflects the arrogant ignorance of the culture at GolfNow. The 1 hour and 15-minute conference was recorded and posted to the Internet. You would think with the folly of their ways; the link would be deleted as it was still “live” when this blog was posted. Note: the video link (https://vimeo.com/172149889/043787c5e6) was deleted within 60 minutes after Golf Channel read this blog.
Here is the essence, “Are you getting value from your relationship with GolfNow?” Vote now. Here is a story where GolfNow is selling three trade rounds for every client round: click here.
An integrated technology solution with a website and email/text communication platform should cost the golf course no more than $10,000 per year. Fore Reservations, before being acquired by GolfNow, charged their clients $2,000 per year. GolfNow is earning about $24,500 from each client. To that one might add the opportunity cost of the rounds GolfNow sells that the course would have otherwise sold and the negative impact on a golf course’s effective yield from the price pressure trade rounds place in the industry. What they are making is unconscionable based on the value provided.
Watch the rap video and let me know what you think?
Here is what I believe. GolfNow is only interested in one thing and one thing only – their gross revenue. Though they have reportedly missed their business target for five consecutive years, they are on track to generate $135 million in revenue from transaction fees and trade rounds and have been recognized as one of the most profitable divisions within NBC Sports.
Does Ticketmaster, StubHub, Razorgator or other ticketing agencies double dip into their client’s pocketbooks? Don’t think so.
I have heard GolfNow’s senior leaders state on two occasions that all Associations involved in the golf industry, i.e., NGCOA, NGF, PGA, and the USGA are ineffective and contribute little to the growth of the game or the business of golf preferring to promote their self-interests.
One humorously ponders if their internal corporate image should be updated. The bull sitting outside of Jeff Foster’s office should be retired as they appear to fancy themselves as a lead character in Star Wars: Help me Ob-Wan Kobi, You Are My Only Hope.
In my opinion, they believe the typical golf course owner is naïve. GolfNow’s sales pitch that their primary mission is to help the golf course owner grow their business plays the golf course owner as a fool. Because they are very likable, personable and seem like they are your best friend, they get away with it. As Samuel Johnson, an English writer who made lasting contributions to English literature as a poet, essayist, moralist, literary critic, biographer, editor and lexicographer, stated, “We are inclined to believe those we do not know because they have never deceived us.” Alternatively, Niccolo Machiavelli stated, “One who deceives will always find those who allow themselves to be deceived.”
Their parent company, Golf Channel is a media company. All those involved in this video production should be suspended without pay if Golf Channel and GolfNow are to retain their credibility about sincerely caring about the game and the business of golf. If they reportedly fired executives who dipped their pen in company ink, isn’t making fun of clients who provide them trade rounds without a pricing floor a greater transgression? For these executives to provide kickbacks/commissions/rebates to at least one management company knowing those funds are not rightfully distributed to their clients may reveal their ethics. The only question Mike McCarley, President of Golf for NBC Sports Group needs to ask, “Would Arnold Palmer, a founder of Golf Channel, approve of these antics?”
You might ask, “Why do I care?” At JJ Keegan+ we create astute insights that provide meaningful value to the innovators and the early adopters that create value for golfers on a foundation that enhances the financial potential of a golf course. Thus, where we observe bullies commanding the pulpit that harm the economic prospects of our clients, whether they be municipal, daily fee, private clubs, or resorts, we will bring the matter to light.
If you want to know more about third party practices, order the 2016 Edition of “The Business of Golf – What Are You Thinking?”, available August 15, 2016. Click here or call me for some quick fixes. There is one thing as a golf course owner you should do today. If you want to distance yourself from your competitors with improved earnings in 2017, enroll in our Fall Webinar series. Click here.
These puppets (GolfNow reps) don’t even know what they are doing to golf courses. It’s truly sad. I speak to golf course owners and operators every single day who despise GolfNow and their tactics.
The way GolfNow treats their customers is saddening. Knowing their customers are frustrated caused by the imposed barter system, they do little to try to find a middle ground to please their customers. One good thing that comes out of this turmoil is that it creates opportunities for new startup vendors to come into the market and offer golf owners new options that dont cost courses $20,000+ annually for a course management system. For any golf course owners who are tired of bartering and devaluing their tee times and paying tens of thousands of dollars per year on a course management system, I suggest contacting GOLFSMASH.COM. They are a new solution that doesnt barter, has no long term contract, and offers the most comprehensive course management solution on the market today at the lowest price. The queue for golf courses waiting to convert is growing pretty long, but its definitely worth reaching out for more information. Find out why so many courses are moving to ‘Golfsmash – The Fairway to Online Booking’.
GolfNow cares only about making money and couldn’t care less about being good partners to the thousands of courses that drive their revenues. Their most recent slap in the face is a program called “ResAssist” where GN sells times that are no longer available because they have already been sold. GN is basically overselling tee time inventory similar to the airlines overbooking seats and then letting the course deal with the upset customers. They overbook so they can collect extra booking fees. When customer calls GN to complain they are told that the course overbooked the time and take zero responsibility. They then argue with the customer when trying to have the bookings fees returned. Sleazy business practices. I hope this video is the turning point for courses on the fence who have tired of their antics and were thinking of moving away from them or to all the courses GN is trying to recruit. Thanks JJ for exposing these thieves, long overdue.
JJ: Great exposure. Carpetbaggers. Feeding on the correction period of the golf course industry.
Believe-it-or-not, I helped write the first tee time re-seller plan in golf back in the early 90’s with Bob Johnson with (defunct) North American Golf Club in Carrollwood (Tampa). Back then our investor was planning to pay cash in advance for tee times. Our plan was to re-sell them, but only to be used during off-peak times, and cart fees were extra. Basically, we were buying normally unsold tee times. It really was a win-win, because a Florida 2/15 tee sheet lists close to 100 thousand rounds, so average Florida tee sheets were 60% vacant.
The plan eventually morphed into Paradise Golf, which Bob Johnson built and ran successfully in Jacksonville and eventually Tampa. But by they weren’t paying anything up front, rather, they were signing up courses to an iron-clad agreement (I had them at a course I managed in Tampa). Paradise became the precursor (I believe) to Golf Now, and some of the other re-sellers out there – praying on a hurting industry.
Golf in the mid 90’s was still fairly healthy.
The difference between our original plan and Golf Now today, was that we would put skin in the game. We were truly adding a benefit – money – to our participating golf courses.
I though everyone might like to know.