Country Club Pitfalls: Golf Management Deals Too Good to Be True

Country clubs bringing in outside management do so in one of two major ways:

1. They recognize they need help and expertise to help them move forward optimally.

2. A firm offers to inject some capital over time in exchange for ownership stake in the club (equity vs. non-equity).

Problem with number 2 is that over time, when the capital improvement money “comes due”, the members are subject to cost cutting tactics that markedly deteriorate the quality of the experience and the club itself.

Members find that they no longer control the club. This is a far worse circumstance, and is often inescapable.