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« 2013 In Review: Memorable Moments, Best Majors | Main | This Can't End Well Files: Sergio Wins With GF On The Bag »
Monday
Dec162013

Scottsdale Developer To Members Who Play Too Much: Resign!

GoDaddy founder Bob Parsons has created quite the stir in the Scottsdale area with his email letter to members laying out his plans for Scottsdale National, which he purchased this year as the Golf Club of Scottsdale for just $600,000.

The letter kicks off like any other developer message to the members, laying out plans for a redesign of some widely reviled Jay Morrish-designed closing holes along with the addition of other new amenities, including a new clubhouse with underground parking.

It's all quite normal until the final third or so of the letter, where Parsons begins to go after the "members who use the club the most" and who "support the club the least." He then writes: "In fact, many members who are at the club each and every day spend nothing and do not support the club at all. This will not continue."

Hold on to your hats!

Parsons lays out how he will be charging members a $100 "service fee" for every day they use the course. Members will only be able to play 30 times a year without bringing out a guest at the golf-wonders-why-its-doomed rate of $200. He then goes on to offer a 100% on the dollar buyout of members paid, calling it a "resignation opportunity."

After this, Parsons lays out how he intends to start inviting and signing up "national" members who "will largely reside out-of-state and when they come to the club they will bring guests."

But, "I will be very selective with regard to who I invite to be members."

So for those of you out there who think benevolent dictatorships are the way to go, here's a little light Monday reading for you!

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Reader Comments (171)

Reading this I found Bob's letter somewhat ridiculous, until the part where he drops in the existing membership fee. I'm pretty sure anyone who can afford at least $25000 (or $110000!!!) to join a golf club isn't going to care one iota about a $100/pd service fee. I'm very thankful I live in the UK where golf seems to be far more accessible than at the over-priced elitist courses in the US.
12.16.2013 | Unregistered CommenterChris Campbell
Yeah Chris, the "the over-priced elitist courses in the US" are just that.
You can, alternately, play one of the thousands of non-elite courses here, or better yet, stick to your UK golf pastures
12.16.2013 | Unregistered Commenter3PuttAficionado
I am glad to know the owner has "style".
12.16.2013 | Unregistered CommenterTaffy
Well, should make for an easier year for the superintendent, assuming that his budget isn't slashed.
12.16.2013 | Unregistered CommenterRblades
So, a foursome of folks who 'play the most' should be able to job the system somehow, right? 2 resign and play as guests to help the other 2 avoid the 30 maximum rounds thing...No idea how much dues are, but there must be a way to have this work favorably for the people who actually like to golf.
12.16.2013 | Unregistered CommenterDsl
Resignation rates will astound Parsons, if the club was healthy no way he could have bought it for $600K
Whenever you can get 100% of your money back when resigning from a club, do it immediately, before the offer is pulled.
12.16.2013 | Unregistered Commentersmails
Was / is Go Daddy cash flow positive? Letter sounds like a dot.com hangover.
12.16.2013 | Unregistered CommenterGeorge Blunt
Well... we had a similar issue at my club, with an aging membership, a majority of which felt no obligation whatsoever to support the club one iota (outside of paying their annual dues). We had several groups who would literally go to the local pub after their rounds to drink and eat, only because the beer was $.25 cheaper per mug.

As much as the rest of us contributing members loathed their practices, we also realized that they were needed. Without their annual dues, our annual dues would skyrocket. As long as they played at a good pace, didn't damage the golf course and left it like they found it, and didn't do anything untoward to cause the club to be looked upon in a negative light - they were welcomed, at least in my book.

Every club has its tightwads. It doesn't matter what the average income is per member, where it is located, how prestigious the club is. Furthermore, there might be a legit reason why some members feel that they don't need to support the establishment beyond paying their annual dues. Maybe the food is bad and the service isn't good.

Or maybe they just figured that the day would come when their club would eventually become a victim of the economic recession and would be taken over by someone who wouldn't fix things for the better, that they would ride it out as long as they could until forced to find somewhere else to go.

I don't imagine that many of them ever anticipated having the option of getting their full investment back, but since it sounds like they will - the new owner won't have to worry about them anymore.

This is almost too stupid to believe, really. Parsons would give Jerry Jones a run for his money.
12.16.2013 | Unregistered CommenterPA PLAYA
Welcome New Members!!!!
12.16.2013 | Unregistered CommenterJT
1.) It would be interesting to know how many current members go for the refund by January 31, 2014.

2.) Would love to have follow up article on this club in 12 months.

3.) Why would a "local" join this club when the owner basically says he wants the non-resident members rather than the local guy unless he is bringing a $200 guest with him?

@ smails Agree I would be first in line to get my $$$ back. They may have the chance to rejoin later at a less expensive fee - This deal the owner is offering may 'kill' the club. He may go begging for new members after this letter is received by the current membership.

@ No Longer You are correct. Don't know many courses selling for $600K that has $110K initiation fees. This place obviously had fallen on hard times. Appears the downward spiral may not be over. Stay tuned.
A grand plan indeed. The hole must have been awful deep to acquire a Scottsdale property for $600K? Such a polite way to rid the club of the riffraff - those that joined the club to actually play golf regular. Don't go away mad, just go away. I guess he didn't see the need for a humiliating food & beverage monthly minimum. Best to go with the $100/round National Strip Burger at the turn model and charge extra for Rogue River Blue. I hope he at least has the dignity to have it catered by Mastro's.
12.16.2013 | Unregistered CommenterD. maculata
Was a member of a place once that charged walkers an extra fee, token amount, because they weren't "supporting" the club as much as the cart riders. Of course, the head of the golf committee was a rider. This sounds like this guy is really just trying to get rid of members and this is his way of forcing them out the door. I cannot believe someone really has this type of business model and thinks it will work. I have forwarded this on to some of my friends who manage facilities to see their reactions. Can't wait. I'm thinking twice about my GO DADDY website and email. This guy has really lost it.
12.16.2013 | Unregistered Commenterol Harv
Many many improvements to,this club and this guy has lost it??? How so? Sounds like the place was a mess he bought it now he wants the losers of the club to go away and giving them 100% od their money back when he did not have to do that. Whether he makes money in the future is mute. Seems like the whole idea was to piss off the loser members and get rid of them. Free carts better food, walking course easier. A 18 th hole that does not end in parking lot, new par 3 course, better service, better carts, better equipment, what is wrong with all this, nothing if you can afford it.
12.16.2013 | Unregistered CommenterVwgolfer
I respect anyone who puts their money where their mouth is and, in my opinion, a full refund is a good example of that . It's his club and he can run it any way he wants.
12.16.2013 | Unregistered CommenterLester
"Whenever you can get 100% of your money back when resigning from a club, do it immediately, before the offer is pulled."

Bingo, I would have personally delivered my resignation the next day and showed up before sunrise in order to be first in line. It just may be this fellow has so much money he doesn't care how much the club loses and for his sake I hope that's the case.

"I'm pretty sure anyone who can afford at least $25000 to join a golf club isn't going to care one iota about a $100/pd service fee."

Chris, you are incorrect on your $25,000 assessment (no pun intended). Now guys that are stroking a $750,000 check to join a club like The Bridge, they probably wouldn't care.... http://finance.yahoo.com/news/pf_article_103217.html
12.16.2013 | Unregistered CommenterDTF
I was going to get a membership here last year at $25,000 initiation fee. Monthlies were going to be over $1,000/month all in before I stepped foot on the property. Looks like buying a GMC Yukon was a better investment.
12.16.2013 | Unregistered CommenterChris
I agree with those who advocate rushing to get 100% of your $$ back. That offer might not last, however, I have to take the other side for the balance and say good on Parsons for running the joint the way he wants. His dough=his rules. Socttsdale is a very, very competitive market place for golf and his idea fits him.

PA Player had it partially right...there is tons of deadweight among many private clubs out there and this guy wants to reset things. Can't say I blame him.
12.16.2013 | Unregistered CommenterTalking Head
For those in the know, compare and contrast Scottsdale National/Go Daddy GC with the nearby, low key, non pretentious Desert Forest GC. Yes, it's his club and he can do as he wants. In this case, I would have preferred Trump as the new owner if I were a prospective member.
12.16.2013 | Unregistered CommenterSteven T.
Joins club
/gets free steak
//resigns for 100% cost
12.16.2013 | Unregistered CommenterStreaky Putter
To me, it sounds just like the old model of membership at Loch Lomond Golf Club, when Lyle Anderson ran things. Which Chris, is in the UK.
The guy has the dough to make it happen, he's offering a refund, he wants his club to be the way he likes it - can't really say there is much wrong with what he's doing. Now, if he was getting rid of members somehow and stealing their money, that would be a different story.
12.16.2013 | Unregistered CommenterPress Agent
I think he sees this club as an Augusta National in Scottsdale type experience. Anyone who has read some of the history of Clifford Roberts at that course will see some similarities. The difference is Roberts directives didn't end up on a blog for anyone to read. As my name tag shows I am a muni hack but living in Valley of the Sun and seeing the golf economy evolve here through recessions and booms the approach this guy appears to be taking is refreshing in its honesty and candor. He appears to be setting the target for members as folks for whom meney is no object and giving all the existing members a very reasonable out. When he starts charging complaining members the cost to revise the course because they don't like a ditch or tree location then you can think of him as Mr. Roberts.
12.16.2013 | Unregistered Commentermunihack
Probably need to add oxygen stations for all the "breathtaking " views. He sure is adding a lot of cost to the business , while driving off the source of some of the revenue.
12.16.2013 | Unregistered CommenterHackinator
Mr. Campbell,

I agree that to play at an ''elitist'' overpriced club, in the USA, or in England for that matter, is silly.

I rarely have paaid more than 15-40 for a rond with a cart, and I have played some courses I wuld put up against all but the top 5% as to condition, beauty, and overallenjoyment.

This guy wants to turn this in to a destination for world/US travelers, peole who are not local s in searh of a good deal. I would RUN to get my full refund. Those who stay are going to get slammed.

Also, in an area with thousands of square miles of desert, WTF on underground parking? Mor money thN SENSE, IT WOULD SEEM. oops..
12.16.2013 | Unregistered Commenterdigsouth
@ Digs. The parking is for the few who venture there in the heat. I once saw a honda's back window fail from the inside out because the owner didin't open a window on a 117 deg day. The door seals were so good the window failed first from the expansion forces from the air inside. If you are appealing to the Bill Gates' of the world you have to consider this. This is nothing compared to Augusta's decisions and it is a seasonal club. I will never live in that world- the one where you own your own jet, yacht, island, etc.
12.16.2013 | Unregistered Commentermunihack
Sounds like he wants to make an Ultra-exclusive Club out of a Private Club. New owners can do that. Doubt he cares if he loses money on the front end if he gets what he wants 2 years from now.

Is the letter a "Dickhead" move? No question. Really rich people do things like this all the time when taking over companies. I do give him credit for the 100% buyout of members, and, yes, I suspect a large % of current members will take him up on it, which is exactly what he wants.

As to turning in your resignation ASAP, I would use the course until January 30th, and then turn in my resignation.
12.16.2013 | Unregistered CommenterSportsDoc
such a warm -fuzzy feeling, esp around Xmas!
12.16.2013 | Unregistered Commenterchicago pt
Geoff, a benevolent dictatorship requires benevolence.
12.16.2013 | Unregistered CommenterTillyHorn
I mean, if he's really going for a ANGC-type model, good luck with that one - he wouldn't be the first tech company chief to lose his marbles this year.

And if Parsons wants to be another Cliff Roberts, who will be his "Bobby Jones"? Let me guess - did the guy recently lose a sponsor because he likes Glenn Beck?
Wow...talk about missing the point of running a golf club which I always thought was to have people play the course regularly.

According the the article they are carrying 160 members which is borderline when running a club. With this 100% money back "PFO & Leave" offer, they will see an exodus for sure...and most likely will not get the extra new out-of-state members needed to run the club at anything other than an operating loss. Yes, the greenkeeper will have an open course to work on for sure!

@VWgolfer: "loser members"...REALLY?! That kind of talk would result in the door hitting you in the butt at most reputable clubs. Members are the lifeblood of any social sporting club. No one is above anybody else since the game treats us all with the same cruel indifference regardless how deep one's pockets are.

Now if this GoDaddy dude's goal is to create another Sagebrush GC type experience...good luck!
12.16.2013 | Unregistered Commenterjohnnnycz
According to the Phoenix Business Journal, Parsons "sold a portion of GoDaddy.. for 2.25 Billion". I guess he can run everyone off and make it his own private club if he wants, which may be his intention.
Wouldn't there be contractual performance levels in place for the owner which the 'deadbeat' members are likely in compliance with? If they don''t want to sell out I would think they could sue this 'classy guy' for 'failure to perform' his contractual obligations.
Sounds like Caddyshack II
12.16.2013 | Unregistered Commenterdave
At this rate, he'll probably be begging for people to book via golfnow.com by next Christmas.
12.16.2013 | Unregistered CommenterBill
I kind of respect the way he generously offers a full refund, but still calls them out as tightwads at the same time.

If I were that rich I suspect I would also indulge in such petty disputes.
12.16.2013 | Unregistered CommenterTighthead
I don't know about the rest of you, but I really enjoy whizzing in the fresh air when I golf.

Restrooms are for the ladies and number 2.
12.16.2013 | Unregistered CommenterManku
What everyone is missing is :
The club is losing 1.5-2 million a year
He wants a small and exclusive membership
He believes he can sell new memberships for 500,000 or more
Any buy backs he can resell for much more
He wants his own personal course. He's not in it to make money
He wants his friends in. Not strangers.
There isn't a lot of market for these clubs but there is some. He'll still be out of pocket each year but its his place to hang out.
12.16.2013 | Unregistered CommenterRobbie
Not sure what is bad about this approach...other than it's directness.

If I paid $110K I'd be more pissed at the people that ran the club in a way that let recent members get in for $25K than this guy offering me the options laid out in the letter.

What will dues look like going forward?
12.16.2013 | Unregistered CommenterJS
Just spoke with a friend who works at another prestigious club in AZ. They said that they have already received some of the members from Scottsdale National. And I'd expect more to come.

I worked in the golf business for 4 years as an assistant and my dream was to open up a club that was walking only, guaranteed rounds under 4 hours, and was only open to people with a 10 handicap or lower. Once I realized the utter difficulty it would take to make a club like that successful, I gave up on that dream.
It sounds like Parsons is trying to form his dream club. He has the money to survive if it fails. And I'm guessing he's more than willing to take a good size loss if he is wrong.

Is the letter rude and unconventional in a private club setting where things are usually buttoned up? Sure. The people that want to leave won't be hurting for options. There are so many good public courses that I don't quite understand why one would committ to joining just one club, but then again I'm not a millionaire so perhaps I should stop that thought exercise.
12.16.2013 | Unregistered CommenterChicago John
The owner can do whatever he wants, especially when he is worth about 1.5 billion dollars.
12.16.2013 | Unregistered CommenterGolfboyz3.0

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