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.
Leave a Reply