Sunday, April 3, 2016

The Week That Was, april 3, 2016

     Like a magician who distracts you with one hand while pulling the wool over your eyes with the other, the National Golf Foundation is trying to convince people that the “numbers remained strong” for golf in 2015 and that “interest in playing golf is at an all-time high.”
     In its just-released report on golf participation in the United States, the Jupiter, Florida-based trade group draws attention to some legitimate positives -- the number of rounds played increased by 1.8 percent in 2015, and 2.2 newcomers gave the game a try -- but by and large it pleads its case by relying on irrelevant data. For example, the NGF finds potential for growth in the fact that last year 95 million Americans either watched golf on television, read about golf somewhere, or “played golf on a golf course or alternate venue.” Seriously, does the NGF think that number of rounds played at miniature golf courses predicts anything about the future of our business?
     What’s more, the NGF is exploiting a trick it’s used previously, which is to highlight the enormous number of non-golfing Americans -- 37 million by the current count -- who are “interested in taking up the game,” perhaps as soon as tomorrow. “The interest is there,” the NGF argues.
     All these distractions are proving their value in some golf circles -- Pete Bevacqua has called the NGF’s report “overwhelmingly positive,” and Golf Digest has decided that “the game appears to be in a healthy state” -- but the report’s key data is cause for continued concern among those of us who count dollars and cents. The NGF now counts just 24.1 million U.S. golfers, down from 24.7 million in 2014 and 25.3 million in 2012. The group dismisses the decline, contending that it’s “confined mainly to those who never really got into the game” and within the study’s margin of error, but the losses can be measured in many significant ways, most particularly by the number of courses that remain on the endangered list.
     What’s more, it’s fair to question the accuracy of the NGF’s count. Even at 24.1 million, the NGF’s number is still substantially higher than the 23 million that Pellucid Corporation submitted for our consideration way back in 2014.
     No matter how much the NGF wants to keep hope alive, statistical sleight of hand can’t hide the cold, hard facts: Golf participation is still shrinking and golf operations are still in trouble.

     One of the golf industry’s most watched companies, ClubCorp, is touting what it describes as “another year of record revenues” and claims to be “positioned for excellent results again in 2016.” Thanks in part to numerous acquisitions (including the 39-property Sequoia Golf portfolio), the publicly traded, Dallas, Texas-based company says that it owned and operated 148 golf properties (and managed 10 others) when it closed the books on 2015. During the year, the company’s golf and country clubs division generated revenues of $694,680 (Correction: The number is $842.6 million), an increase of 21.3 percent over the amount posted in 2014, and if ClubCorp is looking forward to 2016 it’s probably because its new acquisitions haven’t yet contributed significantly to the bottom line. One concern: The number of total memberships in ClubCorp’s golf and country clubs division increased by 4.3 percent, but its “same-store” memberships -- that is, memberships in existing properties as opposed to acquisitions -- increased by less than one-half of 1 percent. No growth there. Another concern: A red flag is always waved when a company admits that some of its financial metrics “are not calculated in accordance with accounting principles generally accepted in the U.S.”

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