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Home 2009 Archives Archives VOLUME 12, NUMBER 48


Web Street Golf Report


Monday, November 30, 2009

IT’S A SMALL WORLD: It’s been more than a year since the financial crisis first emerged. While most of the world was caught off guard by the impending financial disaster, the hope has been that the worst is now out of the way and better days are indeed ahead.

While the US enjoyed its annual Thanksgiving holiday, news surfaced in another powerful region of the world on the credit front that is disturbing. While some within the golf industry have been touting certain geographies, notably China, India and Latin America, as growth initiatives due to pending inclusion in the Olympics, Dubai, which has already invested significantly in golf, we now find out, is in financial trouble.

Dubai World and its many tentacles have announced a six-month standstill on the company's debt. The Dubai Department of Finance said in a statement, “As a first step, Dubai World intends to ask all providers of financing to Dubai World and Nakheel to ‘standstill’ and extend maturities until at least May 30.” In the near term the decision is believed to affect a $3.5-billion bond that Dubai World real estate subsidiary Nakheel (the world’s largest privately held real estate company,) was scheduled to repay next month. Dubai World may seem like a world away, especially for golf, but it is closer to the industry than what may appear on the naked eye.

Established by Dubai World in July 2006, Leisurecorp specializes in the development of premium golf and lifestyle destinations. In addition to Jumeirah Golf Estates, considered to be the world’s largest golf community, Leisurecorp’s portfolio includes Turnberry, one of Scotland’s premier golf resort and host of The Open Championship 2009. It is also involved with Pearl Valley Golf Estates, a South African residential golf community and home of the South African Open Championship. Jumeirah Golf Estates is considered Dubai’s premier residential golf community and home to Greg Norman, Vijay Singh, Sergio Garcia and Pete Dye golf developments. Norman’s Earth course was the venue for the recent Dubai World Championship and the season-long Race to Dubai on the European Tour. Leisurecorp is also a minority owner of Troon Golf, a global luxury golf management, development and marketing company, and investor in GPS Industries, which provides GPS-enabled technologies for the golf industry.

Dubai World, a state-controlled company, is believed to have $59 billion in liabilities. It is also a major sponsor to the European Tour.

Earlier this year Nakheel took over Leisurecorp, the development company which signed the original five-year contract to sponsor the European Tour, which has been reportedly valued at approximately $50 million a year. The figure is believed to include the $20 million prize for the Dubai World Championship/Race to Dubai, as well as marketing costs and other related expenses involved in the agreement. Lawrence Donegan explores in the Guardian the potential future of the financial relationship and what it may mean to the European Tour. As recently as November 18th, George O’Grady, Chief Executive of The European Tour, expressed his confidence that the prize fund for the Race to Dubai wouldn’t dip in a year’s time. The odds of that now happening would appear to have grown.

Since the news first broke, actions are said to already be underway to attempt to explore the sale of some of Dubai World’s assets. The Daily Telegraph in the UK has reported bankers have been appointed to work on the restructuring. Among the assets expected to be on the chopping block, according to the Telegraph, is the Turnberry hotel and golf courses.

CLUB CHECK: The R&A has developed an online club database with respect to the impending changes in the Rules of Golf relating to Grooves. Produced in conjunction with the USGA, the Informational Club Database is a searchable database of all irons and wedges, as well as hybrids and fairway woods with lofts of 25° or higher, which were in production prior to January 1, 2010 and have been submitted to, and evaluated by, either The R&A or the USGA.

“The purpose of the database is to assist golfers and Rules Officials in determining the status of their existing clubs, when evaluated against the current Rules of Golf and the new groove and punch mark specifications,” said David Rickman, The R&A’s Director of Rules and Equipment Standards. “It is important to remember that the new specifications do not apply to any clubs manufactured prior to 1 January 2010 and those clubs will continue to conform to the Rules of Golf for the vast majority of golfers until at least 2024. However, the new specifications will be applied at the highest level of professional golf next year, via a Condition of Competition, and it is important that we provide as much information as we can to players competing at that level and to those who administer these professional events.”

The database and full details of the new groove specifications and their phased introduction can be accessed in the Rules section on

IS THE GLASS HALF EMPTY OR HALF FULL? Given the ways of the world, there isn’t anyone who wouldn’t like to know what the future has in store. That vein of thinking never goes out of style, but now more than ever it would be helpful to know what lies around the corner. Clearly, the golf industry is coming off of its most challenging year with the exception of the PGA Tour. A year ago it would have been scoffed at, if someone had suggested that some private clubs members would simply walk away from their clubs or that play in this segment decline. Even the powerful equipment makers are facing double digit revenue declines from a year ago and even worse many are reporting losses to shareholders. Perhaps the good news is that is in the past and with an economy attempting to bounce back, it just might be the tonic to get the golf business back on its feet again. While the US was the first region to catch the equivalent of the financial H1N1 flu, it quickly spread to other pockets around the world. As the old saying goes, it’s a small world. That can be a good thing or a bad one too depending on the application.

Some golf companies that compete on a global basis are hopeful that other geographies outside of Uncle Sam’s domain will help lead to a recovery. Time will tell, but Bruce Charlton, the man behind the curtain at Robert Trent Jones II, a premier golf course design firm throughout the world, offered some thoughts on new course developments.

“There’s a difference between the U.S. and rest of the world. In the U.S. there are projects to be had out there with people who have the wherewithal and the cash. There’s a movement within the industry for people to say, ‘Hey, this is a great time to build because you’ll never get a project done more inexpensively.’ And these people will have product ready to go when the economy changes. Enthusiastic people are getting projects ready and even under construction during these down times because they recognize the advantages of building now and getting ahead of the rest of the market,” he said adding that he has several Native American projects going — Sequoyah National just opened in North Carolina and another near Niagara Falls. Also on the docket are

The Patriot Course in Tulsa with renovation work just completed at Makena and Princeville in Hawaii, and at Mission Viejo, known as “Mission Impossible,” in California.

Charlton, President of the American Society of Golf Course Architects and a supporter of environmentally responsible golf course design said the international markets are currently influenced by liquidity. “Internationally, I think there is more reliance upon typical financing models and going to a bank for a construction loan,” he explained. “But international banks aren’t releasing money very easily. We have seen a lot of projects fold their hands and say, ‘We’re going to wait,’ on even those projects already approved. Some international courses with financing components are having big problems because people will put an initial deposit down on a lot, but the banks won’t give them the money to finance the rest of the deal. International banking markets are in disarray and causing projects to be delayed. But we’ll see how things go in a few months,” he continued. “ Still, there’s action in India and South America, and I think Central and South America are currently untapped markets. There was a lot of action in the Middle East, but that goes up and down with oil prices.” Some existing markets, however, continue to pay dividends for Charlton and company. “ Our firm continues to be very active in Scandinavia, with a second course at Bro Hoff, in Sweden, GB4 near Copenhagen, and we recently announced another project with Poul Anker Lubker in Denmark. We’re also under construction in Portugal, Italy, Greece, Poland, South Korea and Vanuatu,” he said. “Money and projects are out there — you just have to be courageous, utilize your networks, and be more creative to find them.”

Next year, Charlton and the other members of the RTJ II design team will see one of their projects gain national attention as Chambers Bay Golf Course, outside of Seattle hosts the U.S. Amateur, which will be a preamble to hosting the 2015 U.S. Open. In recent years golf course design has been somewhat focused one dimensionally. The perception that the game has grown easier for the best players due to advancements in technology has seen many new courses attempt to overcome it with distance. Will this trend see the day where 9,000-yard courses come on line?

“I hope not! That would eliminate the skills not only of architects, but of players,” he replied. “Sure, we’re starting to see some 8,000-yard courses that border on the ridiculous. We were asked by an owner recently to create the longest par-72 course in Europe. He wanted flexibility in the way every hole could play in a major tournament, so we developed huge length differentials on every hole. But, in general, I don’t think that’s the way golf should go,” he continued.

“We should continue to put a premium on accuracy, not just strength. We should create situations that force players to make decisions and give them options. I think one of the lost arts in tournament golf is rewarding players who manage their games well, who can read what shots are required in a given situation and execute them. I believe courses will become more minimalistic in the future and use the landscape less aggressively. I’d hate to lose 103-yard par 3s that help give a course rhythm and feel, where you play a few holes and feel like you just faced Mike Tyson and then step up to a 300-yard par 4 and think, ‘Hey, I can drive this one!’ Or, you finish a grueling long par 5 and then come up to the 103-yarder.

The global economy has provided an adequate imitation of Mike Tyson in the last year. The golf industry could certainly use short par-4 or a manageable par-3 heading into 2010. The question remains; is there more of the same yet to come, or a break in the action that will allow businesses a chance to rebuild from the fall out that has been experienced to-date???

STOCK WATCH: American financial markets enjoyed a shortened week as trading was halted on Thursday in observance of the Thanksgiving holiday. Markets reopened on Friday but only for an abbreviated session. For the week, the Dow slipped 0.1 percent, breaking a three-week winning streak. The S&P 500 index rose less than 0.1 percent and the Nasdaq fell 0.4 percent.

Meanwhile, the American banking business is still a mess and yet not under control. The number of distressed banks in the U.S. rose to the highest level in sixteen years, according to a report released by the Federal Deposit Insurance Corp. (FDIC) last Tuesday. The FDIC said that the number of troubled banks rose to 552 at the end of September from 416 at the end of June and 305 at the end of March. This is the largest number of banks on its "problem list" since the end of 1993.

Perhaps in yet another instance of the rich getting richer, banks insured by the FDIC swung to a total quarterly profit of $2.8 billion, more than three times the $879 million they earned during the same period last year and significantly better than their combined $4.3 billion net loss in the second quarter of 2009. The FDIC reported that its Deposit Insurance Fund swung to an $8.2 billion loss, which the agency hopes will be made up by advance payments of $45 billion in fees.


NOTHING TO FEAR, BUT FEAR ITSELF: The Brunswick Isles Golf Trail, which stretches out along the coast of southern North Carolina and northern South Carolina, now offers 450 holes of championship golf to choose from with the addition of Cape Fear National at Brunswick Forest, which is located just outside of Wilmington, N.C., north of Myrtle Beach, S.C.

This 18- hole championship course by architect Tim Cate, stretches out to 7,217 yards. In addition to three giant waste bunkers that run tee to green, the course has more than 50 sculpted bunker complexes, which are filled with the same premium brilliant white SP 55 sand used by Augusta National.

“We're excited to have Cape Fear National join The Brunswick Isles Golf Trail,” said Jack Himmelsbach of The Glens Golf Group, which manages Trail courses Heather Glen and Glen Dornoch, as well as accommodations partner Village at the Glens. “With the addition of Cape Fear National, we continue to lead golfers along a Trail that offers the best of the coastal courses. We offer the best in the coastal Carolinas and golfers appreciate both our quality and affordability.”

For more information about the Trail and each of its courses visit



Last Updated (Thursday, 28 January 2010 11:43)