Some see Ian Leggatt as admitting defeat. Leggatt sees it as recognizing the future. 
Leggatt, the former PGA Tour winner who has run Summit, a pretty terrific private golf club north of Toronto for the past few years, announced on Monday that he was cutting the initiation at the club to zero.
That’s right—he cut the cost join the venerable private club to nothing, when it has been more than $20,000 in the past. Some saw it as Summit struggling. Leggatt admits they are short members (“Every club in Toronto is basically in the same position,” he says), but says he’s just making an adjustment that other clubs will have to make soon.
“If you are sitting back and waiting for the market to come back, you’re going to be waiting a long time,” he says.
In fact, Leggatt says he feels the game is on the rebound. But for more than a year the former tour pro has insisted that cost is the big factor keeping people from joining a private club. They can afford the annual dues, which are typically more than $5,000 a year at a GTA club, but don’t have the wherewithal to pay $20,000 on top of that.
“Golf simply costs too much,” Leggatt says. “A majority of golfers would like to play at a private club if they could. They are already spending a lot playing elsewhere. But they don’t want to spend to cover the initiation. That’s the deterrent.
“So we just got rid of it,” says Leggatt.
Leggatt believes the move will bring in younger members and their families. He’s very vocal about the need to help create the next generation of golfers, and so Summit is allowing member’s children 16 and under to play for free.
“We’re trying to create a population of new golfers,” he says.
The 14th hole at Summit has one of the most dramatic tee shots in Toronto.
Leggatt proposed the move at the club’s AGM last weekend. He had quietly approached some golfers and asked whether the zero initiation would interest them and when the response was positive, he proposed it to the club who supported it.
“This is not a membership drive,” he says. “The model is fundamentally broken. This is what the market will bear. The days of people spending $30,000 or more to join a private club are over.”
Prospective members are still responsible for a $1,500 assessment relating to rebuilding the club’s greens, but Leggatt says he’s been flooded with interest.
One has to wonder if this model—more akin to what you typically see in the UK—will be adopted more widely in Canada as private clubs attempt to rework their business model.
Summit is in an interesting position to be the test case for the concept. The club struggled with winter damage to its greens, but made a massive investment in rebuilding a vast majority of them last summer to deal with ice issues. The club has removed a significant number of trees and rebuilt its seventh hole, which had issues with a neighboring road. In other words, new members will find a club in good shape ready to move forward.
Some feel dropping initiations will lead to transitory members who aren’t committed to the club.
Leggatt is convinced the new members will love Summit and will become long term members.
“People says time, difficult and cost are the barriers to the game, “ he says. “We’re trying to deal with the cost. The dynamic in the sport has changed.”
Sounds like they don’t even have a board of directors comprised from the membership. Are they to be commended for this innovation as well?
Would Leggatt have done the same thing at the Granite Golf Club?
Surprised he wasn’t fired by Summit
Peter, I agree 100% with you. Call me old school but I’m a big fan of the Balance Sheet, you know where we can take a snap shot look at the health of the company. I don’t know about you but the Shareholder Equity is now a big fat ZERO, millions written off just like that … I’d like to get a copy of the Note to Readers in the year end financials!
Fantastic idea! I spent my summers in high school cutting the grass at Summit and absolutely fell in love with it. I would play it every chance I could get – and a few times without the pro shop and the superintendent even knowing.
Summit and Leggatt should be applauded for changing the business model to respond to the market.
Retail and service industries are changing rapidly – who goes to car dealerships to browse anymore? – and adjusting your operations and policies to reflect this evolution is just smart economics. Any naysayers can go ask taxi companies how well they are doing by following the same old, tired business model. Uber and carsharing have made cabbies virtually obsolete. And don’t even get me started on newspapers.
If I lived anywhere near Richmond Hill anymore I would jump at the chance to join Summit. And kudos for extending free play to members’ kids under 16. Making golf affordable and accessible is the best way to foster a love for it in our next generation.
As a father with two very young sons, I will not join a club unless it has some similar free play option for my boys when they start playing.
I expect many more clubs to move to this model in the coming years. We already hear a multitude of advertisements for Beacon Hall just up the road from Summit. I don’t ever remember hearing that joint having to scour for members before.
Don’t listen to the wags, Ian. Good on you for creating possible solutions instead of playing the same old song and complaining when it ends.
Jackson,
You make a really good argument for the case of Summit and Leggatt changing course (pardon the pun).
Here’s why I think it’s a bad idea. Besides the obvious financial hit to the business (read earlier post) the change in the Club’s culture will forever be damaged.
Definition of culture – Websters Dictionary
1 : the beliefs, customs, arts, etc., of a particular society, group, place, or time
2 : a particular society that has its own beliefs, ways of life, art, etc.
3 : a way of thinking, behaving, or working that exists in a place or organization (such as a business)
Remember when you worked there? It was no doubt a Club. Do times change? Yes. Do Golf organizations need to adapt and change? Yes. But to turn the ship 180 degrees in the opposite direction will have many unintended consequences.
One of those will be most, if not all members who ponied up and paid the full initiation fee will become disenfranchised … we’re talking your core customer here. Oh and what are the odds that Ian will cut them a big fat cheque to reimburse them … well, let’s just say he’s a true Scot!
Quilchena G&CC in Richmond, BC had the same problem albeit it in reverse. Long time members who paid a few hundred dollars in initiation fees were teeing it up beside new members who paid $35,000-40,000 for the same privilege. Next thing you know, a new clubhouse was built so that the new members could entertain their business clients. Course renovation, yup they got that too.
End results, annual dues skyrocketed. Old members couldn’t afford to keep playing. A huge culture change. Business model broken.
How long before Mrs. Jones complains to Ian about all the F bombs she heard on the course? I give it until May.
while i agree that the current equity loss to members should have been dealt with, the state of the industry does not support initiation fees anymore. There are still options for those who wish to play with the elite. Mr.Legget has hit the nail on the head, golfer population is down. This happened through the golf boom when courses were lining their pockets with greens fees and ignoring the junior golfers. What we now lack is that generation of junior golfers we ignored, they are older now, and not golfing because we were greedy. Our course plans on introducing a father/son league ( or any mix of parent and child for the politically correct) and promote junior play a lot more this season.
Branding for any product is critical. If Titleist (a strong brand) gave away some of their product to ensure that their customers stayed with them and bought other products from their line, the ‘brand’ would be diminished. That’s what Summit has done. Leggatt has an amazing lack of business sense. The BOD at the Club are naive. What a joke they all are.
Only time will tell if this “business growth strategy” increases the club’s profitability. But if Summit maintained the status quo they wouldn’t have a club or course to play on within the next five to seven years. And sadly they’re far from the outlier in private golf. Truth is those that paid the $25K initiation do not and will not stand for 50% to 75% annual dues increases to make up for the negative cash flow. Healthy balance sheets are very important to the long term stability of a private member golf club (or any business for that matter) but cash is king and you can’t borrow against shareholder equity to fund substantial year over year losses. I hope this strategy works for Summit but every other club in the GTA is praying it doesn’t.
S.G. … well stated. Game, Set , Match to the Sales Guru!
not hard enough