The Pellucid Perspective - February 2020 - 5

to end well either for First Tee or Henrico County.
One of our local informants cites the fact that Virginia
State Golf Association attempted a similar "lift" 20 years ago
raising private money to build a Fazio course with a learning
center with altruistic intent and it failed miserably in less than
10 years. We have knowledge of and have worked with multiple of the CA Golf Associations who didn't have the benefit
of donor-financing for the build and they've remained afloat
but struggled in making that economic model work in a much
more "target-rich" environment. Suffice it to say that this isn't
a unique model and none of the previous 1.0 versions have had
any success or even longevity (i.e. avoid losing money over a 5+
year horizon). Colleague Stuart Lindsay has been involved in
this ongoing conversation and watching the various Facebook
posts of locals and writers and other interested parties (i.e. the
owner/operators of competing courses who will be impacted as
this plays out). As always, he kind of cuts to the chase in one
of his latest emails to me about the heart of this matter: "The
First Tee is a feel good rathole that has devolved into a money
raising business that had to deemphasize the golf orientation in
order to broaden their horizons for possible grant money. And
we wonder why the First Tee has done nothing to boost Junior
participation."
In summary, as I outlined in the State of the Industry presentation in Orlando, the solution to golf 's supply-demand

imbalance is more plows, fewer transactions. For those not
in-the-know, the challenge with transactions to "save golf, save
greenspace, save history, save [insert your own euphemism here]"
is that, in doing so, people make unreasonable assumptions and
bets about saving something that is, in the vast majority of cases,
beyond redemption by any entity requiring any type of return on
their investment. By pursuing transactions and financial structures that are as thin and low-odds as what we're observing here,
it's the equivalent of a local market Hail Mary for both parties
involved (operator and the municipality). In doing so, it forces
the capable, competent local operators to have to continue for
multiple years to content with an "aberrant competitor" in order
to stay afloat. What often happens is a double-drowning (i.e.
the Franken-financial course goes under and takes the previously
profitable operator with them). We'll get to watch this play out
over the next couple years and, unfortunately, the competitive local owner/operators will have a front-row seat to the madness
while they figure out how to compete against this "shiny new object" and the siphoning of rounds and golfers from what appears
to be a declining market of interest in the sport. The Facebook
posts around this subject are, per usual, as informative and often
more entertaining that the factual reporting that entities such as
Pellucid provide. My favorite in the string of locals weighing in
on the topic? "Without other people's money - the woke would
be broke." Mic drop...
n

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The Pellucid Perspective - February 2020

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