It’s amazing to me that 227 years after the final ratification of the American Bill of Rights, we still wholly rely upon them as we navigate the trials and tribulations of living together in society. There is something evergreen about the specific rights that James Madison codified as the first ten amendments to the U.S. Constitution, which were written in part to address rights that were either overlooked in the Constitution or that needed to be clarified due to the ongoing debate about federal and state authorities.
While our issues in golf aren’t as “heavy” as the fundamental rights of man and woman, we are hoping the new “Golf Course Operator’s Bill of Rights for Marketing and Distribution of Tee Times” will offer clarity about how courses should be respected and treated by those we entrust with our customer information and tee time inventory, regardless of the shifting sands or changing winds of technology and marketing. At the most recent Golf USA Tee Time Coalition board meeting, we drafted and passed such a document, the body of which is as follows:
1. Operator shall have total ownership of his or her tee time inventory, including the ability to share access with or restrict access to any tee time agency.
2. Operator shall have full control of all pricing for all tee time inventory across all channels of distribution and online tee time agencies, which includes retaining the right to lowest price guarantee on his/her own website.
3. Operator’s tee time availability and pricing shall be accurately displayed and free from misrepresentation.
4. Operator shall receive comprehensive and transparent data related to all performance and activity with all distribution partners, agencies and affiliates, including but not limited to customer name and email address, tee time reservation data, revenue, price paid for tee times, impressions and clicks.
5. Operator shall have the option to pay cash for all technology and marketing services.
6. Operator shall retain all rights associated with his/her business brand, name and likeness, which shall not be used in marketing by any agent or affiliate without the Operator’s written permission.
7. Operator shall have the right to cancel any agreement with any tee time agency or affiliate without being subject to excessive fees, penalties or evergreen terms.
8. Operator shall have the right to enforce their own policies and procedures, including but not limited to cancellation or no-show policies, when such policies are in conflict with partnered or affiliated tee time agencies.
The NGCOA and the PGA of America founded the Golf USA Tee Time Coalition two years ago to help course operators manage their relationships with online tee time providers, which can be difficult to deconstruct and understand fully. To ensure this ecosystem works in symbiosis for all parties, the coalition shares guidelines and best practices, such as this Bill of Rights to use when partnering with providers (find more resources at teetimecoalition.org).
Just as the American Bill of Rights is regularly compromised or violated in some fashion by citizens and institutions (we are not a perfect society), we don’t expect that creating this document alone will change behavior. These are very complicated relationships. But it gives us a foundation upon which to craft our agendas and build technical standards for software companies and tee time marketers. It makes it pretty clear what and who we are advocating for.
What do you think? Comment below or find me on LinkedIn at linkedin.com/in/jaykaren and share your thoughts.
One of our members recently sent me a copy of an article written by the Wall Street Journal’s editorial board (“Google-Hotel Travelopoly”) about Google and hotels not playing fairly with online travel agencies (OTAs), such as Expedia, Travelocity, etc. Here is the gist from the WSJ perspective (my comments in parentheses), and please stick with this until the end. There is a message for the golf industry.
Hotels are complaining that OTAs, which make about 20% commission on each room booked, have begun squeezing profits from hotels, due in part to the rise of competition like AirBnB. (Wait…what? Seems the editorial board needs a history lesson. Considering that OTAs get 20% of the revenue of booked rooms and simultaneously facilitate discounting – and the resulting downward pressure on room prices – I’d say profit squeezing has been a permanent fixture in these relationships.)
OTAs place a heavy focus on discounting, even in high-demand situations.
Because of this squeezing, hoteliers are running to Google for assistance, since 60% of travel searches begin with Google, and Google is already a “frenemy” with the OTAs. Apparently now, Google and the hotels (the ones supplying the actual inventory to be sold) are both trying to use each other to benefit each other, possibly at the expense of bookings to the OTAs. The hope is that the hotels will yield more direct bookings from online search. (If you’re the hotelier, it’s hard to blame you for that.) Among other things, hoteliers are asking for Google’s help in preventing OTAs from using their hotel names in branded keyword advertising. (In other words, hypothetically, imagine Enchanted Evening Hotel in Springfield, IL, is trying to limit an OTA from advertising around the search term “Enchanted Evening Hotel in Springfield, IL.” A hotel, which might have to pay 20% to an OTA, doesn’t want the OTA to siphon off bookings from people who already know they want to explore and possibly stay at Enchanted Evening. Seems reasonable, no?)
OTAs are complaining they can’t use Enchanted Evening’s brand in certain ways in the URLs and ad titles that appear in the search results. (OTAs have a long history of trying to redirect travelers, who think they are going to Enchanted Evening’s website, to the OTA’s own listing of Enchanted Evening to book. Even if Enchanted Evening doesn’t sell rooms on the OTA anymore, they still have used clever bait-and-switch tactics off of Enchanted Evening’s brand. Some might call this fair game, but others don’t like such practices of marketing partners.) The OTAs, and the WSJ, believe this is all stifling competition, because it may be tying the hands of the OTAs.
So, that is what the Wall Street Journal editors think. One thing is for sure. Even though the hotel industry is ten years ahead of the golf industry with regard to online booking, they still haven’t figured out how to play well in the sandbox together. Because, ultimately, the hoteliers are willing to pay 20% for marketing and booking services, but not for the bookings they would reasonably have received without the help of the OTAs. And another thing is for sure. The marketing ground continues to shift under everyone’s feet. Whether it is Google or the OTAs that capture the attention of the consumer – and dollars from the merchant – course operators need to “stay woke” on these matters in our own industry.
There was a day when marketing your business felt 100% in your control. But it seems you can’t even be in business today, unless you’re dancing with the big boys. Small businesses can feel subject to or victim of the march forward of the big boys in the online marketing world. My advice? Play ball only if the terms are advantageous for you…capture data and get OBJECTIVE professional help to determine if it’s a win-win for you…and develop the strongest possible, one-on-one relationship directly with your customers. To carry the analogy one more step, if you’re going to dance with the big boys, be sure you are the one leading.
I shared the WSJ article with a few golf industry opinion leaders and practitioners in the online space, asking them to complete the sentence, “And the moral of the story for golf course operators is…”
Here are are the responses. If you have thoughts on this, feel free to add your comments below.
Bryan Lord, TeeSnap
Only you care most about your business. Any marketing company, OTA or GDS will put themselves ahead of the clients they represent. OTA’s are tools, like anything else. If you solely rely on someone else to run your business for you, the results will rarely be as significant as you taking control of it. The key is to keep limited inventory on OTAs solely for new customer acquisition, then market directly to that consumer subsequently.
Scott Merchant, Golfbook
While online golf (tee times) and online travel (flight, hotel, car) isn’t an apples-to-apples comparison, there are good lessons to be learned through what is happening in their space. First, golf courses should spend more time and resources than anticipated on their online marketing strategy. Consumers are naturally migrating online for all of their purchasing decisions, and the golf course should be reacting to this change. Second, be prepared to adjust your strategy. What is true today might not be true tomorrow, as the travel OTAs and hotels are finding out. Third, Google is a powerful force in shaping consumer behavior. Their strategic changes will directly impact your business, so be alert to how their marketing platform works.
Jared Williams, Golf USA Tee Time Coalition
Pay close attention to Google. While all of the attention is on the business practices of online tee time agents, Google is and has already been exploiting its market dominance in the lodging and airline industry– we’ve seen that with Google Flights and Google Hotels. What is going to happen when Google becomes a competitor to the GolfNows and TeeOffs? Google could soon be a problem for both course operators and online tee time agents. If Google starts taking tee time reservations, they become rivals to the tee time distributors. Google already auctions ads to the highest bidder–typically a tee time distributor. The tee time distributors would probably rather not pay Google, but their business requires such. Golf courses don’t want companies bidding on their trademarks (whether they have contractual relationships with those companies or not). Perhaps this is an opportunity for the golf course and online tee time agent to come together and truly act like partners. Google isn’t doing anything to address these issues. Maybe we look to Amazon and eBay as an example– rather than competing against each other for adwords, they simply stopped giving money to Google (as it became more of a rival e-commerce site). Imagine what customer service and course management software would look like if the tee time companies took the money that they spend with Google and used it to make the golf course operation more efficient.
Rick Robshaw and Tom Robshaw, Club Prophet Systems
As an owner/operator, you simply can’t do it all. Whether you outsource the entire thing to a management company or you outsource given tasks to service providers — you will always have 3rd party vendors (in addition to employees) to help you get the job done. You need to do a cost/benefit analysis for that service and don’t forget to factor in opportunity costs and if that service is helping or hurting your business. Sure, you may be at the top of the Google search page, but is it returning enough profit to exceed what you pay for the listing? Are your customers now being targeted with sidebar and pop-up ads for one or more of your competitors? It can be as obfuscated as the barter argument. Sure, it costs nothing to give up those two hard‑to‑fill tee times. Then you turn around a year later and find your $65 golf course is now a $35 golf course. You have given away hundreds or even thousands of rounds. You are twice as busy as you were before but you are making half the money. You look back at what appeared to be a great idea while you are forced to dig in further just to pay the bills and you still have another year under contract with no way out. Don’t get trapped in long‑term contracts that can put you in a death spiral. Do your research with others who have gone down this path. Make service providers accountable for providing a return on the investment you make with them. Do not sign term agreements if possible. If you have to, at least insist on a fair way out of any and every service contract if the deal goes upside down.
JJ Kegan, JJKeegan+
While I understand the relationship to the golf industry’s bandits, I pondered the degree to which there would be a direct statistical correlation to the individual golf course owner. At a macro level, there is a correlation but I think at a micro level it breaks down. National brand recognition, historical capital invested, availability of debt & equity sources, sophistication of technology utilized and the loyalty programs established are differentiators to the individual golf course operators. Meta searches and auction ads are far beyond the intellectual grasp of the individual golf course owner and most management companies (sorry).
Andrew Wood, Legendary Marketing
The moral of the story for golf course operators is and always has been that the most important thing other than your ability to grow grass, is building a large proprietary email database. Third party vendors who provide websites do a shockingly poor job of helping clubs build their databases because its NOT in their best interest. Owners who fail to realize this are dumber than a rock! Clubs that spend the vast majority of their marketing on building a large email list and to a lesser extent a Facebook following are in a far better position to drive revenue than those that spend their money trying to drive revenue in other ways. This of course assumes that the content they send via email is not just mindless discount offer after discount offer and includes some real value to the reader whether or not he wants to take advantage of the offer that day.
Laura Dihel, EZLinks:
Choose good partners. Do the math. Though parallels are often drawn, the golf and hotel industries are remarkably distinct. While we share challenges such as variable pricing and expiring inventory; our consumer behavior patterns, the variance in the number of global brands and our third-party relationships are fundamentally different. It is important that golf course operators do the math when evaluating marketing partners rather than assuming symmetry between industries. The Google meta-search program provides a great example of why doing the math is important. Commission rates in the hotel industry for online travel agents range between 20 – 35%. These rates make the 10% Google meta-search commission an appealing alternative despite the fact that hotel operators have to provide Google with their best website rates and that commission is charged on cancelled reservations. Golf’s leading pay-for-performance travel agent, TeeOff.com by PGA TOUR, features a commission rate of only 15% for rounds booked and played (no charge for canceled rounds). With online tee time cancellation rates hitting double digits for many courses, the fact that commission is only due for rounds played is an important variable. TeeOff.com’s business model ensures it functions as a partner to golf course operators. With each reservation made, TeeOff.com provides consumer data to the course, including golfer email addresses, and ensures course partners stay in 100% control of their pricing. Partners should drive value. Choose good partners and do the math are foundational truths to building a great business.
Harvey Silverman, Silverback Golf Marketing:
Google as the dominant search gorilla in the room makes golf’s dominant search entities – GolfNow, TeeOff, and Golfbook– look like embryonic chimps. However, both GolfNow and TeeOff take advantage of what Google offers by purchasing ad words and course names to elevate their own URLs in golf search functions. Just like the major hotel players, they have the capital to do so and most golf courses…don’t. A general rule of thumb is that golf courses should budget 5% of annual revenue to marketing. I’ll bet about that same percentage – 5% – or less actually do. The moral of the story is first – protect your brand by trademarking it. And second, find a way to budget 5% of revenue to marketing and find the right marketing partners to stretch those precious dollars for maximum return. To not do either is to succumb to an ugly fate.
I was a huge fan of Greek and Roman mythology when I was a kid. Clash of the Titans was my favorite movie, and I loved translating the Aeneid in high school Latin class. I know, I should’ve gotten out more. But I was on the golf team, so there’s that! Each year at this time, I remember the lesson of the Roman god, Janus, who was the god of beginnings and transitions and had two faces: One looking to the past, one to the future. As we ring in the New Year, it’s a chance for all of us to reflect on how our year went—personally and professionally—and make commitments and resolutions for the next year. Writing this column allows me to reflect on 2017, and share with you what we’re planning for 2018 at the NGCOA.
I’d be remiss if I didn’t give personal thanks and recognition to Rock Lucas, owner of Charwood Country Club in Columbia, S.C. Rock has been our board president for the past two years, and has done a masterful job living up to his name by leading the board and organization in a time of substantial change. He’ll soon pass the gavel to the ever-capable Dick Stuntz, owner and operator of Oaks Golf in Lawrence, Kansas. Rest assured, the NGCOA will be in capable hands for another biennium.
Here are some highlights from 2017:
- We started the year with the Golf Business Conference and Golf Industry Show in Orlando, where hundreds of operators learned, shared and honored some of the best in our business. Thanks to NGCOA member, Ron Jaworski, for kicking the meeting off with a reminder that success is in everyone’s reach.
- NGCOA partnered with ORCA to bring a key performance indicator and benchmarking program to the public course sector. Course operators are receiving incredible insights on revenue, rounds and channel mix (including analysis on bartered rounds). Members save upward of 50 percent off subscription rates. Click here to get signed up!
- We hosted a successful Golf Business TechCon in Las Vegas, where we saw a mix of tech companies and tech enthusiasts gather to discuss where golf operators can take their businesses.
- NGCOA had the biggest increase in attendance at the 10th annual National Golf Day in Washington, D.C., where we made the voice of our industry heard by our elected officials. Click here for a recap.
- The 22nd MCO Retreat was held in Monterey, California, where the nation’s largest owners and operators met.
- Several new Smart Buy suppliers were added to the family, offering discounts to our members. Those included DirecTV, Steele Benefits, ADP, GOLFZON, Capital One and Snagajob. Click here to see all the deals.
- Our Advocacy staff assisted badly-damaged golf courses in Puerto Rico and other locations after the horrendous storms by orchestrating assistance and resources. In addition, they published a helpful resource on how to wisely choose and work with merchant processors.
- We closed out the year with 5 percent more NGCOA members and 3 percent more courses.
With Joe Chastenay (Essex Country Club, Essex Junction, VT) and David Norman (Mid-Atlantic and NC Golf Course Owners Association) at the 2017 Golf Business TechCon.
Looking into 2018, I’m pleased to share the following announcements and plans:
- We are excited to announce a few senior staff changes at NGCOA, which will ensure the members and industry are well-served by passionate professionals leaning forward into our priorities. Click here to read.
- The annual Golf Business Conference is right around the corner (San Antonio, February 6-8), where we’ll have a greater number of workshops and networking opportunities conducted by successful peers. Don’t miss the golf outing or the pre-conference, hands-on workshop on customer service. And we’re pleased to honor the LPGA and other industry greats at the closing banquet, where LPGA Commissioner, Mike Whan, and LPGA legend, Nancy Lopez, will join us. Click here to register today!
- In the first quarter, we’ll launch the official Golf Business Podcast series, which will bring weekly interviews and content to membership on important operations and industry matters.
- The 23rd MCO Retreat will be held in Chicago in mid-July, which will include a visit to the Jemsek family’s famed Cog Hill Golf Club. The nation’s top resort officers, as well as top agronomist officers, will be included. We look forward to hosting this event in the Midwest for the very first time.
- Golf Business TechCon will return in October, again in Las Vegas. While we’re not sure this will be an annual event, more conversations must be had and more tech companies want to participate, so we’re happy to host this event once again.
- Our Advocacy staff anticipates publishing a golf course owners guide to the changing landscape of marijuana legalization and what it means for your business. And as the tax legislation in Washington becomes clearer, we’ll offer explanations and guidance for our members
We have more wonderful announcements and member benefits up our sleeve and will enjoy the element of surprise at the proper times.
The NGCOA remains committed to several industry-wide initiatives involving our allied associations, to ensure a collaborative approach to our industry’s issues—and to make sure the needs of owners and operators are shared and supported by others.
And on a personal note, as I begin my 45th year on this earth, my 19th year as a husband and 13th year as a father, I have several things I want to accomplish. Of course, trimming down to my fighting weight is on my list after a gluttonous season of feasting. But I’ll have a list of resolutions aimed at being the best man I can be to my family, friends and strangers. Here’s hoping you have a wonderful 2018.
Data. The word tends to elicit one of two responses out of small business owners. One is: “Give me more! Can’t get enough of it!” The other: “Who’s got time for that?”
On most days in the golf industry, it feels like the latter faction has the majority. And I get it—owners and operators are busy people, taking care of customers, tending to employees, watching the cash flow closely, and trying to make sure the product is as good as it can be. It’s hard to imagine time in the day to look at data on rounds, revenue, capacity, RevPATT and how your numbers may compare to a competitive set or your market.
But here’s the thing—we need to. The primary comparison operators tend to make now is when looking at what competitors are charging for tee times online. Unfortunately, that tends to be an exercise that results in a downward pressure, economically speaking. The pull and temptation is to consider lowering your prices to get customers when you see that your competitor’s pricing is lower than yours. This can no longer be the only exercise we do in comparative analysis.
Instead, imagine if the dominant conversation around data in our industry and at the operator level was about facility performance. I believe the result would be an upward pressure, economically speaking. Instead of feeling the effect of price pressures, operators might feel the effect of keeping up with the Joneses. If the conversation centered on revenue per available tee time and seeing competitors performing better than you, the question would be, “How do I achieve that?” That’s a better conversation than, “Shoot. They lowered their rates. How do I keep up with that?”
The hotel industry has its monthly STAR report, which allows hoteliers to see how they perform against the competition and market. Revenue, occupancy and revenue per available room data points are shared. This data drives behavior in a good way. It stokes the competitive fires among hotels to raise their performance metrics. Many general managers and sales executives are compensated on performance as a result. Golf could benefit from this consumption of data.
And that’s why we’re pleased to announce a partnership between NGCOA and ORCA, which offers course operators the opportunity to share in and benefit from robust data. In addition to the revenue, rounds and occupancy data, ORCA also offers unique insights into channel data for course operators, so you know where your revenue is coming from—including the opportunity cost of bartered rounds. We highly encourage all owners and operators to check this out and begin sharing data. There’s no downside. Your information will be protected.
There are days when this pursuit seems Sisyphean. But we all have to get over that and just do it. My hope is one day we will be able to automatically retrieve the data from our software friends in the industry. This is about a rising tide lifting all boats. Click here to get started today. There are free and subscription versions for whatever your appetite might be. Let’s do this!
When I was CEO of Select Registry, a portfolio of more than 300 upscale inns, we administered a secret-shopper, 200-point inspection of the guest stay. We knew a thing or two about the customer experience and what guests liked, loved, tolerated and hated. One thing I learned was the power of “dissatisfaction triggers,” which are arguably more impactful to the experience than those things people loved and wanted to experience. Examples might be finding a hair in the bathtub or being treated rudely by staff.
We had a lot of first-timers stay at inns and B&Bs, which meant thousands of customers going through our doors looking both for reasons they should love this and reasons why this might have been a bad choice. I believe first-timers in golf do the same thing. They’re already nervous, they fear embarrassment and wonder if they’ll fit in. They know how passionate people are about the game, so there must be “something” really great. At the same time, they’re hypersensitive to their surroundings and how people are treating them—both other golfers and the course staff.
Treatment by staff may be one of the biggest influences on customer experience. Just look at online reviews for the harshest responses.
Many of golf’s leaders are asking more and more these days what we can do about the experience that will help retain more customers. We’ve focused so much on player development programs, grip-and-stance, expecting proper etiquette toward the game from people who might not get why that’s important and so on. I wonder what will happen if we turn our attention—collectively as an industry—to etiquette toward the customer and eliminating the dissatisfaction triggers. And this is tricky, because as small business owners, you know what the customer wants or desires varies depending on who walks through the door. But we often shape our businesses around the experienced customer and what they want, rather than the interested, new customer and what they may need.
In golf, we should challenge ourselves to identify the triggers at the course that cause people to have a visceral reaction about golf. So much of this comes down to simple hospitality. We must remember all businesses should be hospitable, but we in golf are in the hospitality business. Do you have meaningful training with all of your staff about the do’s and don’ts of good hospitality? Did you genuinely express an appreciation for your customer’s business today?
It’s no coincidence the NGCOA is focusing more time and attention on delivering hospitality and customer service content to our members through webinars and conference workshops. Did you miss the webinars we hosted this summer on hospitality? Tell me, what do you believe are the strongest triggers of dissatisfaction, which leads to attrition? And what can we do about it? Let’s close the back door and embrace the people who chose to come through the front.
I saw Malcolm Gladwell deliver a keynote speech at an annual meeting of the American Society of Association Executives years ago. He was very insightful. I read Blink. I read Tipping Point. I read Outliers. I’ve enjoyed how he analyzes the world and its intricacies, patterns and phenomena from interesting points of view. After hearing his recent podcast episode of Revisionist History, in which he attempts to turn “golf” into a pejorative word, my admiration is wavering. I encourage readers to listen to the podcast. For someone who metaphorically hits the ball pretty well, Gladwell shanks this one.
The Revisionist Historian
With Revisionist History, Gladwell claims to journey through “things overlooked and misunderstood.” But this episode isn’t just an attempt to shed light on something obscure. He has a specific agenda. At the 2 minute and 44 second mark, he delivers the smuggest smuggery I may have ever heard about golf: “I hate golf…and hopefully by the end of this, you’ll hate golf too.”
The origination of Gladwell’s contempt for golf is his claim that all of the joggers in West Los Angeles are forced to run on a tiny, gravel path between the road and the chain-link fence that surrounds Brentwood Country Club. Gladwell comes to this eureka moment while staying in the pool house of his local friend, when he visits LA. This paucity of running space is apparently due to the fact that the fenced-in, private Brentwood Country Club has the audacity to 1) be fenced in, and 2) encroach on the space where joggers want to jog. He then wonders with podcast guests, after implying Los Angeles residents are suffering from some kind of park-deficiency syndrome, what it would take to make the golf club a public park. Gladwell fails to mention that over half of Los Angeles’ low-income and medium-income residents are within a 10-minute walk of a public park – a much better standing than many other major cities in America. Only the well-to-do of LA – and the well-do-guests of the well-to-do – suffer from this terrible plight of not being near a public park.
Gladwell goes on to lament that golf courses are wasteful: they take up too much land, drench themselves in chemicals, and can even use up to 389 truckloads of sand to rebuild their bunker complexes (a seriously hasty generalization, by the way). He stereotypes avid golfers by stating a “fact”: “Rich people really, really like it. They’re obsessed with it.” And that there “really is no parallel for ordinary people.” Ordinary people? What Gladwell overlooks (ironically, considering the purpose of his podcast) is that golf is an egalitarian recreational activity, 80% of which is enjoyed on public golf facilities (including 2,500 municipal facilities from coast-to-coast) by over 23 million Americans, and the average green fee in the US is $37. So much for golf being an elite, rich-man-only game. He also fails to mention that Los Angeles operates thirteen municipal golf courses and 92 miles of walking, biking and hiking trails. I’m not sure any local municipality in the United States operates more public golf courses than LA. So much for the need to turn Brentwood Country Club into public-use space.
The podcast moves on to criticize corporate CEOs for playing too much golf. Gladwell’s claim is buoyed by one person’s obsessive research about the frequency with which some CEOs play the game. The assertion is based on 20% of the top 1,500 CEOs of publicly traded companies being obsessed enough to keep a USGA handicap. Of those 367 CEOs, the average number of recorded rounds of golf is 15. The top ten percent of the sample play 37 rounds or more per year. Gladwell translates this to about 160 hours spent on the golf course. The equivalent of five and a half weeks of work (he says)! Gladwell implies this is a waste of time just through the tone of astonishment in his voice. Gladwell further misunderstands – again, ironically – that these rounds of golf could very well have been played on weekends, the days when avid golfers are more likely to play and outside the typical work week. And by the way, how many hours per week is a CEO “on the job”? I would imagine CEOs of large corporations, with endless functions to attend, countless emails waiting for response, tomes of reports and materials to read through, hours of presentations to run through or rehearse, staff meetings, board meetings, business meals, etc. are almost always “on the job.” Is it really a big deal that the most avid golfers may play every weekend?
Another thing Gladwell doesn’t understand is the fact that many business deals and connections are made on the golf course; that four hours spent on the course from a business standpoint is really no different than four hours collectively spent over lunches or dinners with clients, employees, etc. Also, I would bet a CEO’s salary that most golf played by CEOs has some business angle or component to it. His assumption is that these CEOs are apparently out for wasteful joyrides when they play golf. Many Americans find social and economic success in part due to the use of golf as a relationship-builder with clients, colleagues and bosses. I’ll argue there is no better method of engagement and observation of peers and business associates than through a round of golf, whether it’s a high-end private club, or on a daily-fee course during a charitable outing.
And finally in this segment, Gladwell calls golf a “dangerous habit,” due to a correlation (not causation) he draws between rounds of golf played by CEOs and poor performance of the company. Is golf really the culprit when it comes to poor performance, or is it that the CEO is just ineffective? That would be like blaming the video game for the poor academic performance of kids who like to play video games. He calls golf “crack cocaine for rich white guys,” contending that golf is a self-destructive addiction. To complete his profiling, Gladwell makes example of one CEO among 1,500 CEOs of publicly-traded companies. The crescendo in this segment is when he nearly falls off his chair in shock that the worst “abuser” of this study of CEOs played 148 rounds in a year.
Gladwell then questions property tax law that applies to golf courses, in particular Proposition 6 that passed in California in 1960. He attacks non-profit golf clubs for the audacity to band together and seek tax reform to prevent them from being forced out of existence, due to the “highest and best use” standard at the time for tax assessment. By 1960, dozens of golf courses had been taxed out of existence for being taxed as high-end residential or commercial instead of park or recreational. Gladwell makes it seem as though all the California bourgeoisie made this happen through clever lobbying (calling in Bob Hope to help the cause), when in fact it was a constitutional referendum, voted upon by the citizens of California – and by a margin of 68% to 30% in favor. And it was Hope’s wife, Delores, who was making the case to the legislature and voters to pass Prop 6. She cited the need to protect the greenspace that also doubled as an effective stimulus for the California economy.
Eighteen years later, Proposition 13 was passed by Californians, which preserved tax assessment values at 1% of the cash value of the land at the time and capped tax increases. Under Prop 13, assessment value would only change if there was a change in ownership of the land. Prop 13 wasn’t just for golf courses – it was for all California property owners. Furthermore, in 2010 a court addressed the argument that the local private clubs had indeed changed ownership, because the members or shareholders of the clubs in 2010 were not the same members or shareholders in 1978. The court denied that change of ownership claim, and Gladwell calls this a “third gift from God” for the private clubs.
Gladwell brings in a philosophy professor and invokes the Ship of Theseus paradox, to attempt a pretty creative explanation as to how a club’s ownership changes as the members change. The paradox of Theseus asks the following question: while sailing across a sea, if Theseus replaces each and every plank of his ship, is it the same ship when it arrives at the destination, or is it a new ship? Gladwell implies that because the members of a club in 2010 were not the same members of the club in 1978, the ownership has essentially changed – and the club should be reassessed based on Prop 13. But, what Gladwell misses is that the members of the club do not own the land themselves – the non-profit entity of the club (i.e. Brentwood Country Club “non-profit inc”) is the landowner, and that hasn’t likely changed since the original purchase.
It seems Gladwell would not be so frustrated about this, if there was more or ample public park space for the citizens of Los Angeles. Los Angeles County has 37,405 acres of parkland (this includes the 16,000 managed by the city of Los Angeles), with Griffith Park being largest with 4,282 acres. New York’s Central Park is only 843 acres. Nevertheless, as noted by a podcast guest, the green space in the most affluent areas of Los Angeles are either golf courses or cemeteries, and this grates at Gladwell’s sensibilities. It struck me as quite elitist of Gladwell to even be arguing his case – a rich guy, jogging in a rich area, wishing he could jog on the pretty property across the street and behind the fence. By the way, Will Rogers State Park (only a couple of miles from his friend’s house) has 4.1 miles of trails on which Gladwell could enjoy a jog.
Gladwell might be careful about what he seems to wish for: that Brentwood Country Club and those like it become public space, or be taxed at highest and best use. First, while the property tax revenue from the clubs might be lower than desired by Gladwell, the land would surely be a financial burden to the local government, if it became parkland. As government-owned land, it would likely cost six or seven figures to maintain every year. Will the city or county raise tax rates on the rich, middle class or the poor to maintain more acres beyond the 37,405 it already has? And if you’re going to argue that Brentwood Country Club should be taxed at “highest and best use,” then the landowner should have the zoning that would allow it to sell for commercial or residential purposes. In other words, if you’re going to say a country club’s land is worth $5 billion and tax it as such, then the members of that club should have the ability to actually sell it for $5 billion to a commercial developer. And there goes your public space idea, because there is no way the county or city would pay billions to have a neighborhood park. Also, all the property that abuts golf courses could kiss their heightened values goodbye, if those golf courses were sold to commercial or residential developers. Additionally, it’s not uncommon for large landowners of green space to receive some kind of unique treatment under tax law or conservation easement programs as incentive to preserve in perpetuity the land as open space, even if sometimes access to the land isn’t public. Such programs allow for valuable pieces of land to be permanently preserved and never developed in a landscape that is progressively being turned into condo buildings, shopping centers, housing developments, corporate parks, etc.
Imagine this scenario: a group of local residents comes together to create a non-profit, community garden association. They acquire five acres of land on which to farm the tomatoes, asparagus and kale they and their families would enjoy. Would Gladwell argue the land should be taxed as though a $15 million mega-mansion or a $500 million skyscraper was sitting on the land? I doubt it. It’s a harmless, fenced-in garden, after all. In fact he seems astounded, in his own hypothetical example earlier in the episode, that planting a garden on a one-acre plot in Manhattan would yield a tax bill as though a high-rise building was sitting upon the land. “Highest and best use” taxation policies can drive homeowners and certain types of businesses off the land. Land valuation, assessment and tax laws are very complex for a reason: they bend and swerve to allow for continuing use and ownership of land with regard (not without regard) to what might be happening on that land.
What Gladwell is doing, by arguing against the tax laws that apply to golf courses in Los Angeles, is playing judge and jury to what is highest and best use of land. And this without regard to the positive impact golf has on communities and economies. As an example, through the game of golf, more money is raised for charities ($4 billion annually) than the NBA, NFL, NHL, and MLB combined. The industry impacts 2 million jobs in the United States. But he hates golf, so Gladwell will find it hard to see land used as recreation by “rich white guys,” (which he says repeatedly) who care for and benefit from the property, as best use.
After further contemplation and wider inspection of the issue, I wonder if the revisionist historian would ever revise his own perspective on golf. Better yet, Mr. Gladwell, let me know when and where your travels take you, and I’ll meet you at a course for a round of golf together. We can subsequently discuss the virtues of spending four hours together, in a beautifully preserved surrounding, getting to know each other in ways you might not expect. Then multiply that experience by over 23 million, for all the Americans who play the game each year. Then, you might get a better sense of how egalitarian and pretty wonderful this centuries-old activity is. Maybe we’ll even discuss philosophy and tax policy.
The Trust for Public Land, ParkScore Index http://parkscore.tpl.org
Southern California Golf Association http://www.scga.org
UC Hastings http://repository.uchastings.edu
California Tax Data http://www.californiataxdata.com
California Department of Parks and Recreation http://www.parks.ca.gov
We Are Golf http://www.wearegolf.org