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Golf Canada loss shrinks, membership program falters

Golf CanadaGolf Canada held its AGM over the weekend in Montreal, and released its annual report at the same time. Always interesting reading, there are some items worth noting both on the positive and negative sides:

Membership:

Two years ago, GC ED Scott Simmons stressed how important the new membership drive was, especially since he’d asked the board to allocate millions in support of it. Since then the organization has gone through a couple of executives who were supposed to lead the initiative and ended up flat overall. It didn’t add to its membership base, but did keep fewer members from leaving and identified clubs that were perhaps fudging their numbers and not paying their share.

Here was Simmons’ remarks when the program was launched:

“If we aren’t successful with this, I don’t see any other initiatives that we can do to raise revenue to support our programs.”

He added at the time that he was betting his job at Golf Canada on the move. Two years later the program no longer has a standalone focus within the organization and revenue from membership was flat -over-year was flat, despite two years of heavy concentration. Simmons argues this is a success since Golf Canada had been haemorrhaging members and has stemmed the bleeding. That’s certainly one way to see it.
These are the organization’s remarks on membership:

During 2011, Golf Canada continued to focus on membership revitalization and growth as our key goal and
our number one priority. The membership initiative was implemented during the 2010 golf season and we have seen success with a slight increase in member clubs and public player membership. Our total spending in this area will be reduced, but the organization will continue to focus on delivering superior value to its current members and will increase membership levels by promoting the benefits of membership

During 2011, the Board approved a motion to eliminate the Membership Fund, which was allocated a total amount of $5 million in 2009, and realize spending in this area as part of normal operations. The plan to build a sustainable membership base through member club retention and recruitment and
growing the number of public golfer members has not changed, but the focus has been shifted based on marketplace learnings from the past two years.

Overall, the overall financial loss was cut significantly to $1.5-million, down almost $3-million from the year previous. It is a big improvement, but the organization can’t sustain any significant long-term losses.  The organization now has about $29-million, enough to keep it going while it tries to reach break even. But Simmons says he wants to stop the bleeding with $25-million in the bank.
It’ll be interesting to see what Golf Canada does to attract new members going forward, since the report implies they are backing away from making it a focal point of its strategy to raise revenue.
I also found this remark by Simmons to be telling:

The golfcanada.ca site also houses our Handicap Network and to the critics that say golfers don’t care about maintaining an official handicap, I respectfully disagree. The proof is in the numbers – in 2011, more than 340,000 golfers posted over 8 million scores. Those golfers that tracked their handicap joined thousands more Canadian golf enthusiasts in helping to make golf- canada.ca Canada’s most viewed source for golf news.

Given Golf Canada’s own figure from a few years back that suggest 5.95-million Canadians played the game, that would suggest only 6% of Canadian golfers care about maintaining a recognized handicap. Even if you cut that number  to the so-called “core golfers” it would mean 13% of golfers care about handicapping. That’s a pretty low figure and certainly not an area that is going to attract new players.
In his written note, Simmons had this to say about generating new members:

We are also committed to growing the Golf in Schools program, which introduces golf through the elementary school physical education curriculum. Our efforts in 2012 will be bolstered thanks to the support of Callaway Golf who has come on board as presenting sponsor.

It’s about exposure – getting clubs into the hands of children and providing a basic introduction to the sport. In less than three years, the program is in more than 1,300 schools. Our goal is to get golf into the majority
of the 10,000 Canadian elementary schools. With a world-class curriculum and the full endorsement of Physical Education Canada, Golf in Schools is helping to introduce thousands of children to the game. In 2012, we also plan to roll out a high school program so that thousands more young adults can maintain a connection to the sport.

 I can’t really tell how much of a success Golf in Schools has been. I’ve had some in the industry grumble that there aren’t metrics for measuring how well it is doing, but I tend to think anything that has a long-term perspective on the growth of the game is positive, while most in the industry are only worried about making their next quarterly targets. We have to think bigger than this.
Tournaments
Golf Canada’s professional tournaments also were flat on an operating basis, which is an improvement over the last time the organization took a tournament to Vancouver and blamed its financial failures that year on holding the Canadian Open at Shaughnessy:

The 2011 RBC Canadian Open was held at Shaughnessy Golf and Country Club in Vancouver. While the event operated at a small deficit, the presentation on site, the corporate support and the support of the host club all contributed to making the event an overall success. As a result of focused efforts by Golf Canada and its key partner, RBC, we were able to collectively contribute $1.14 million to charities in 2011.

It added:

For many years Golf Canada was able to rely on net revenues of approximately $2.0 million annually from the Canadian Open. However, since 2007, the changes in our agreement with the PGA TOUR and related changes to the value of TV coverage has made it difficult for the event to provide the same levels of financial support to the organization, but we expect the event will operate at a breakeven level for the foreseeable future. We strongly believe that the Canadian Open is an important event for Canadian golf fans and we are prepared to continue to operate it on this basis.

So what Golf Canada appears to be saying is a small loss is acceptable. Given that it has inked a new deal with RBC that goes to 2017, it would appear to prepare GC supporters with the suggest the financial figures aren’t a vast improvement going forward. In other words, the Canadian Open isn’t going back to being a cash cow.

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Robert Thompson

A bestselling author and award-winning columnist, Robert Thompson has been writing about business and sports, and particularly golf, for almost two decades. His reporting and commentary on golf has appeared in Golf Magazine, the Globe and Mail, T&L Golf and many other media outlets. Currently Robert is a columnist with Global Golf Post, golf analyst for Global News and Shaw Communications, and Senior Writer to ScoreGolf. The Going for the Green blog was launched in 2004.

4 CommentsLeave a comment

  • This is why they need an average golfer with perspective. Rather than hiring an agency to re-develop the logo they should have hired someone to investigate what golfers really want. It’s a great example of tunnel vision

  • So with a Golf Canada Membership, I’d receive: Savings on Insurance. Travel Advantages. Discounts on Merchandise.

    Cool, sign me up!

    Seriously, someone point me in the right direction where to join. Their website does not provide a link to join, nor does it mention the cost of membership. No wonder they are giving up on this initiative…

  • I would say the average golfer wants a fun, affordable place to play. One that could be walked, which is better for their health, and his or her game. A decent place to practice, not hitting off of a rubber mat. The developer, on the other hand, wants a 7000+ yard monster surrounded by a subdivision to satisfy their ego, and a delusion that their ‘masterpiece’ will one day host The Canadian Open. How many people play from the tips? I’d say less than 5% (of men), and out of that 5%, how many actually pay green fees? Are the men and women (and juniors), playing from the blues, whites and reds subsidizing those playing from the blacks? Yes. Does it cost substantially more in land, construction and maintenance costs for these monster courses? Of course it does. And Joe Average is the one paying for it. I would rather most courses max out around 6600 yards instead of 7000+. If the developer wants to keep the large budget and higher green fees, then build multiple tee boxes on each hole, at different angles and yardages. This gives the player a variety each time he/she visits, and not the same course, day in and day out. That is my average golfer’s perspective.

  • The only reason I use the RCGA errrr Golf Canada handicap site is that my club requires me to if I want to play in the tournaments. If not for that I would keep a handicap but I would use any one of the programs or sites available that do a much better job of it. Heck I bet most of the Green fee players that bother with a handicap use it as much for the stats that are available with these programs and which are for the most part missing from the RCGA site.

    As for other Golf Canada benefits as previously mentioned it is the usual insurance, travel deals exclusive to Golf Canada and and anyone else who wants them. Heck even the bag tag you get is a flippin’ joke, I don’t think more than a half dozen people at my club bothered to pick theirs up. More wasted dollars.

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