"We should've done this 10 years ago..." - Board Member, MacGregor Downs Country Club

Should My Club Consider a Recapitalization?

Today there are approximately 3,300 member-owned, private clubs in the U.S. Experts agree that more than half are carrying dangerous levels of debt. That debt makes capital reinvestment challenging. Without reinvestment, clubs struggle to retain members and compete for new ones. In the face of these challenges, hundreds of clubs have transitioned to non-equity status in recent years.

Recapitalizing with a well-funded partner like Concert Golf Partners addresses the fundamental challenges many clubs are facing, even after more than a decade of economic expansion nationwide. Here are the top 10 signs your club may want to recapitalize.

  • Debt Hinders Reinvestment
    • We have capital projects to do, but we still have the debt from prior renovations. This commonly occurs when a club finances its capital projects through debt rather than a one-time assessment or annual cash flow. The club may be at full borrowing capacity or the new projects simply get deferred for a few more years due to the restrictive debt-service payments. As our friends at Club Board Professionals like to say, “Debt is a tranquilizer; not a cure.”

      Concert Golf Partners retires all of your club's debt.

  • Capital project wish list > funds available for reinvestment
    • As part of any recapitalization, Concert Golf will immediately fund the Board's wish list of projects, as well as maintain an ongoing capital reserve - to continuously improve the club's amenities. 

  • Assessments cause push-back from members
    • A proposed assessment gives members the chance to reconsider whether they are using the club enough to justify the cost. The bylaws may require only a 51 percent vote for a capital assessment to pass, but the club may lose 5-10 percent of its membership – and dues income – as a result of pushing through an assessment.

  • We don't have a wait list to join
    • Most private clubs, even 10+ years removed from the last recession, are not in this fortunate position. Aging demographics and a declining interest in golf may have created a permanent change in demand for clubs.

  • We do have a wait list to get a refund
    • Despite no longer offering refundable memberships, many clubs used to offer them – and now have a sizable, and continually growing, wait-list of former members who are owed some or all of their original deposit back. This can cause a long-term drain on cash flow and limit the club’s borrowing capacity.

      Concert Golf will remove any barriers to exit the club and resolve member refund liability.

  • Our monthly member bill (dues + assessments) has grown faster than 2-4% annually
    • Some clubs don’t pass a one-time assessment but rather spread it over 10-20 years so the monthly bill doesn’t increase dramatically. After doing this a few times, though, the annual cost just to put a tee in the ground has risen much faster than inflation – and the club may be “out of market” in its pricing.

      Concert Golf will typically freeze dues for the first year post-recapitalization, then contractually limit future dues increases.

  • Our average member age is rising
    • All clubs know they need to replace their resignations with at least an equal number of new members each year. However, unless you add younger members – the new generation of families that stays for decades – the club gets older over time.

      Attracting new, younger members is crucial for long-term financial stability.

  • The club is having difficulty finding volunteers for Board service
    • Some clubs restrict Board service to founding or equity members, thus the number of available people to serve on the Board is steadily decreasing. Four-hour Board meetings arguing over the price of the soup or color of the new tee markers are becoming increasingly less attractive.

  • Initiation fees are down and don't fund our capital needs
    • In good times, initiation fees generate enough cash to make continuous improvements. Many clubs are seeing lower initiation fees, so the club needs to assess its members or build a capital reserve from annual cash flow.

  • The Net Worth of our club is stagnant or declining
    • If your club’s annual depreciation amount is greater than the amount of capital being re-invested into the club every year – then the club’s Net Worth is likely declining; making it more difficult to maintain relevance in your market. Club Benchmarking is a valuable resource to calculate and monitor your club’s Net Worth over time.

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What's The Process?
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Investment Criteria
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Equity vs. Non-Equity
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How Does it Work?

Please click "here" for a how-to guide on recapitalizing your club.

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