The Pellucid Perspective - February 2014 - (Page 11)

PRIVATE CLUB REORGANIZATION Scottsdale National owner to low-spending members: 'Go, Daddy!' Radical club restructuring, fee refund send 40 percent of membership elsewhere By Jim Dunlap M any of America's private country clubs have reinvented be willing to do so once future plans are solidified. Parsons did themselves in recent years to varying degrees and for state in his letter that membership is temporarily closed and various reasons, but GoDaddy founder Bob Parsons is would be by unsolicited invitation only in the future, at an iniin the process of raising that bar to unprecedented heights at his tiation fee yet to be determined. It's a pretty safe bet that no new Scottsdale National Golf Club in Arizona. Following a letter to memberships will be offered at $25,000, or any amount of less the club's members in December which outlined some drastic than six figures, and are more likely to exceed the $110,000 that revisions in the club's operating policies, 69 of the 178 Scott- long term members paid originally. sdale National members, nearly 40 percent, have left the club It is not known if by "members who play the most but spend with full initiation fee refunds in hand. the least," Parsons was alluding primarily to those members If Parsons is surprised by that development, it is probably who joined at Crown Golf 's bargain initiation fee of $25,000, as only that the number of departures was not higher. The De- opposed to longer tenured members who paid $110,000 to join. cember letter, which was subsequently published in the Phoenix Brennan did acknowledge that the discrepancy in the admission Business Journal (and which The Pellucid Perspective has had a charge was a potential source of conflict, saying "When you go copy of since it was sent), detailed some $35 from $110,000 to $25,000, there can be a lot million in improvements to the golf course of membership dissatisfaction issues." Parsons' radical and other club facilities that Parsons plans; Parsons' radical club restructuring plan it then went on to say that Parsons' review club restructuring was bandied about at some length during of membership spending patterns had rethe recent Golf Industry Show in Orlando, plan was bandied vealed that those members who played the particularly among Arizona owners and opcourse the most were actually spending the erators. Most speculated that Parsons, who about at some least. That, he wrote, would cease, and soon. pocketed a sum north of two billion - yes, length during the As of January 31, 2014, members would be that's with a "B" - after selling GoDaddy, was levied a $100 fee for every round they played, recent Golf Industry merely taking a dramatic first step to create guest fees would go up to $200, and members not only a spectacular golf experience but an Show in Orlando, would be limited to no more than 30 rounds elitist national club membership who will per year unless accompanied by a guest. That particularly among pay the fare, show up occasionally and bring was the stick to encourage the lighter spendfriends who will all spend with both hands Arizona owners ing members to consider moving along; the and enjoy a pristine golf course with virtually carrot was that although club bylaws only reno other golfers in sight. and operators. quired Parsons to refund half of the initiation Will the new club cash-flow, particularly fees to any resigning members, Parsons would after a $35 million course and facilities redeprovide a full refund of those fees, whether sign? Well, Parsons had a head start, having that was the $110,000 initiation charged to original members paid only $600,000 or so for a golf course and club that origior the marked-down $25,000 which former owner Crown Golf nally cost 8 figures to develop. And, if it runs in the red for a had instituted in the latter part of their tenure to entice new few years - or forever, for that matter - Parsons can afford it, and members. may well feel it's worth the occasional year-end debit to have Then, when the January 31 deadline had come and gone and the type of club he covets. virtually all of the departing 69 members had cleaned out their In the meantime, other upscale private or semi-private clubs lockers and left with initiation fee checks in hand, Parsons re- in the Scottsdale area are happily giving club tours to former warded those who elected to stay on by rescinding the 30-round Scottsdale National members with Parsons refund checks burnlimit, cutting the per-round charge to $50, and knocking $100 ing a hole in their pockets. As Troon Golf VP and Troon North off the monthly dues amount, lowering that to $750. General Manager Mitch Harrell told us, "As a matter of fact, Parsons' and Scottsdale National public relations spokesper- we have had a few of those folks contact us since that letter son Leela Brennan said that Parsons was not prepared to reveal went out." the full scope of his plans for the club at this time, but would As the saying goes, it's an ill wind that blows nobody good. n www.PellucidCorp.com The Pellucid PersPecTive 11 http://WWW.PELLUCIDCORP.COM

Table of Contents for the Digital Edition of The Pellucid Perspective - February 2014

TOC
The 2014 solution to Barter is… NGCOANow?
PGA Merchandise Show from 35,000 feet
Philosophy, sociology and epistemology lessons for Hackgolf
The way Keiser rolls
Scottsdale National owner to low-spending members: 'Go, Daddy!'
January golf weather impact: Downward trajectory from '13 continues
Developers' past excess plague DC area courses
ClubLink adds TPC course to Florida portfolio
USGA responsibility not to grow the game. Really?

The Pellucid Perspective - February 2014