Does The Golf Industry Deserve an Economic Bailout?
The banking industry, the automobile industry, the homebuilding industry, the golf industry. They all have one common bond: Many people made poor business plans. Some may have been created out of greed, bullheadedness, or just simply not paying attention to the bottom line during boom periods. Three of these industries are getting federal assistance in some form or another through President Obama’s economic stimulus plan, but how about the golf business? Does it deserve a bailout of its own? Most of the world would scoff at such a preposterous idea for such an “elitist game”.
Most of the world would ignore the fact that the golf industry is the sports and entertainment worlds' largest contributor to the U.S. economy, a few years ago generating $76 billion in direct economic impact (according to the 2005 Golf Economy Report, commissioned by the World Golf Foundation's GOLF 20/20 initiative). According to U.S. Census data, the $76 billion U.S. golf economy was larger than the motion picture and video industries in 2005. Golf facility operations generated $28 billion in revenue, exceeding revenues from all other professional and semi-professional spectator sports combined.
In addition to golf's direct revenues, the 2005 Golf Economy Report presented for the first time the direct, indirect, induced and total economic impact of golf on the U.S. economy. The report indicates that golf generated a total economic impact of $195 billion in 2005, creating approximately 2 million jobs and wage income of $61 billion. The study, which was completed in 2008, also found that golf generated more than $3.5 billion annually for charities across the country. Granted that is a few years ago, but the point remains: Golf is a major economic driver in this country ahead of more “mainstream” industries. Granted it is not the banking or automobile industry, but the golf business is more influential than most would give credit.
I’m torn. In one way, I would love my industry to be the recipient of some economic stimulus. On the other hand, I think the long-term health of the game would be much better if left out of the handout business. Who would even get the money and what would they do with it? Most of the golf business is reliant on developers who are in the business of creating facilities and jobs. Obviously some of the money could go directly to site improvements, but I am afraid that such easy capital could give some an easy reason to spike fees, which would be a detriment to growing the game. This is exactly the reason why the game is suffering as it is: Too costly.
One way to control how the money is spent is to ensure that greens fees and other expenses are controlled properly to ensure people do not take advantage of new found capital, but that just smacks of socialism, or something worse. The money could be used strictly to create ‘from the ground up’ facilities, yet that could create further socialistic problems by creating direct competition to existing, privately-owned facilities. The answer there would be to ensure that these facilities actually were legitimate stepping stones for beginners to move to regulation facilities that most private operators run. These facilities could also be placed in locations that were not within a certain distance from any potential competitors in this ‘from the ground up’ category.
Beyond this last suggestion, I would have to say no to any economic stimulus for my industry. Instead, our industry should learn from past mistakes, accept more reasonable business plans, and look to create facilities for the right reasons. What are those reasons?
What were those past mistakes? Here are five things the golf industry can avoid or strive for to ensure that the focus is on the game of golf and not something else:
1) Ensure golf is not a secondary proposition.
2) Stop building golf courses solely to sell back yards.
3) Focus on the golf experience first.
4) Eliminate the bells and whistles.
5) Continue to grow the game from the ground up and not from the top down.
In the next five weeks, I will focus on each one of these propositions in more detail. In the meantime, don’t expect any handouts from the government on the first tee.