It wasn’t quite bill shock. But it was surprising to see one item on the subscription renewal notice from my local Sydney golf club.
– Bronze membership . . . $396.13
– Affiliation Fee . . . $47.50
– Bar Credit . . . $100
– Golf Link Fee . . . $3.05
– Insurance . . . $30.32
Total . . . $577
Wait a minute. I’m being billed $47.50 for an Affiliation Fee? $47.50? It got me wondering.
Assuming every club member in Australia – some 400,000 registered golfers – pays $47.50, you don’t have to be Einstein to figure out that comes to $19 million.
Talk about rivers of gold. And the affiliation fee seems to be getting larger and larger each year: $36.30 … $37.40 … $39.60 … $41.80 … $43.40 … $45.45 … $47.50.
So where does it go? Well, $17 of my affiliation fee goes to Golf Australia as a ‘capitation’ fee (based on the number of playing members at a golf club). The sport’s national governing body received $5.72 million from club members last financial year – 43 per cent of Golf Australia’s total revenue ($13.31 million).
The remaining $30.50 of my affiliation fee is paid to Golf NSW, which governs the sport across my home state for men and women. It took $3.10 million from 146,174 members at 375 clubs last year.
Elsewhere, Golf Victoria collected $3.82 million from 109,822 golfers. Golf Queensland picked up $2.36 million from 66,496 golfers [see table below].
State associations collect these affiliation fees (including the capitation fees for Golf Australia) by sending out a tax invoice to each club in their respective state. Not everyone pays the same amount. Juniors pay half the adult fee, while members of multiple clubs are slugged with an affiliation fee for every club where they’re a member.
So what of my initial estimate of $19 million? Australian Golf Digest reviewed each state’s most recent annual report that was available. We added the state affiliation fees ($11.28 million) with the Golf Australia capitation fees ($5.72 million) to calculate a grand total of $17 million. SEVENTEEN MILLION DOLLARS.
Club golfers shouldn’t necessarily be concerned by the magnitude of the money generated in affiliation fees. They should, however, be interested in how the money is spent administering the game.
Justifying Costs
Golf Australia carries out all the functions that come with being the game’s custodian. It fulfils a role the R&A plays in Britain and that of the USGA in America. It manages rules and handicapping. It stages national championships for men and women from juniors through to seniors. The flagship is, of course, the men’s Australian Open. It also invests in elite athlete development. And, increasingly, Golf Australia sees its duty as game development.
“We say our No.1 reason for being is to try and grow the game and to get more people playing golf – and people playing more golf,” says Golf Australia chief executive officer Stephen Pitt.
Golf Australia recorded a surplus of $211,522 in 2015/16. Its total revenue for the 2016 financial year grew by 10 per cent from $12.05 million to $13.31 million.
Apart from $5.72 million in capitation fees, government grants make up $1.85 million. GOLF Link fee revenue raises another $1.06 million. (This money is collected and then paid out to a third party to provide the handicap service, including software, help desk, website, etc.) The Australian Sports Foundation – a philanthropic body – donates just less than $1 million. And commercial sponsorship of the Australian Open generates $1.77 million.
Golf Australia employs the equivalent of 26 full-time staff in its Melbourne office: CEO & administration (3), high performance (2), championships (3), rules & handicapping (2), commercial & sponsorships (2), digital & communications (3), Australian Opens (2), finance (2), game development (7).
It may surprise you to learn that game development has become a priority. When Pitt joined Golf Australia in 2008 the organisation had just one person designated to this area. Game development now receives more than $3 million per annum (including salaries and attached costs of staff).
The shift is a reflection of the need to address the participation rate. Golf club membership reached a peak of 500,144 in 1998 when Greg Norman last held the No.1 world ranking. That figure steadily declined over 15 years at an annual rate of about 1.5 per cent.
The good news is that club membership rose last year for the first time since 2000. Golf Australia believes that credit for this is due to Jason Day and Adam Scott for their outstanding play at the professional level, which it believes has driven participation.
It also claims it’s the result of two game development initiatives, MyGolf and Swing Fit. MyGolf targets children aged from 5-13, while Swing Fit is a program for women consisting of six weekly sessions, with each lasting 75 minutes.
It may not be run on the smell of an oily rag, but Golf Australia is relatively frugal when it comes to administrative costs. That wasn’t the case 10 years ago after the merger of the men’s and women’s amateur bodies when expenditure was extravagant.
Today, $2.91 million from total income of $13.31 million is spent on staffing. By comparison with other national sporting organisations, Golf Australia has lower than average expenditure on administration as a proportion of total revenue.
In another sign of good management, the use of government funding is well directed. The Australian Sports Commission funds Golf Australia’s high-performance program for elite amateurs with an annual grant of about $1 million. As revealed in our December feature, “Punching Above Its Weight”, this HP program is world class despite such a relatively modest level of funding.
The usage of government grants, totalling $1.85 million, compares favourably with other national sporting organisations. Many sports rely on government for more than 40 per cent of their funding. For some organisations, two-thirds of their income comes directly from the Sports Commission.
But are club golfers getting value for money? Golf Australia thinks it is well spent on their behalf.
“The association fees are really quite cheap compared to a lot of other sports,” says Pitt. “And I do think, generally, the money is used well within golf.
“There is a philosophy of trying to get as much as we can into programs. But I think it also raises the issue about, ‘How can we make sure we have as much efficiency in administration as possible and lack of duplication?’”
Golf NSW Rolling In Cash
About two-thirds of your affiliation fees find their way to the state associations. All are in the black and Golf NSW – with 37 per cent of club golfers in Australia – is in a very healthy financial position with total equity of $10.3 million.
Golf NSW is currently in the process of collecting $30.50 from every adult club member in the state. Last year’s takings of $3,100,287 in affiliation fees made up almost 40 per cent of its $7.8 million in total revenue. That includes a $1 million philanthropic donation from the Australian Sports Foundation, which is solely used administratively by Jack Newton Junior Golf.
Golf NSW’s expenses were $7.7 million (up from $6.8 million) last year. It employs 17 full-time staff and three contractors. Expenditure goes towards state events, club support, marketing and game promotion, high-performance, state teams and development squads. It also funds Jack Newton Junior Golf and spends money and time rolling out national initiatives such as MyGolf, Swing Fit and Golf Month.
A large slice of activity involves event management. Golf NSW stages 35 state-based tournaments: NSW Open, Amateur, Mid Amateur, Sand Greens, Foursomes and Fourballs at men’s, women’s, boys, girls and senior level. This requires five full-time staff in the golf department. In addition, it runs metropolitan club pennant and women’s grade competitions.
Golf NSW’s purpose, as outlined in its strategic plan, is to efficiently promote, market and advance the game of golf in NSW in collaboration with Golf Australia, state golf associations and other industry bodies, ensuring a viable future for the game.
In that regard, Golf NSW sees its primary responsibility to clubs, also offering them operational support and agronomy reviews.
“Our members are our golf clubs. Golf Australia’s members are the states,” says Golf NSW chief executive officer Stuart Fraser.
“The states are operational and the deliverers of programs on the ground because their relationship is with the clubs. Clubs – generally when they’re looking for help – pick up the phone and talk to us because we’re in constant contact with them.”
So how much duplication is there between the operations of state and national bodies?
“It is widely accepted that across all industry stakeholders there are certain areas where consolidation could occur,” says Fraser. “In saying that, there are many aspects of a state’s operations that are – and should – differ to that of the national body when it comes to servicing our respective membership.
“Essentially we are two very different organisations. We are the deliverers and Golf Australia sets national strategy, participation programs, directional policy and rules administration.
“As you can see from the staff numbers here, we think we’re pretty lean when you consider we assist 375 clubs and 33 districts throughout the state.”
Much of the criticism of state associations comes from their preoccupation with tournaments – from state championships down to veterans’ events and pennant competitions.
“For all intents and purposes, the state associations do nothing more than manage events,” says one industry source.
“Ninety per cent of the staff they’ve got working in the office are running events. That’s what they do. Most of these state associations have turned into glorified events management centres.”
Such a comment raises the argument that affiliation fees should be more aligned to a user-pays system. Why should Average Joe stump up close to $50 for somebody to play in a state veterans championship?
It’s a growing concern from a club perspective, which is why the mooted ‘One Golf’ proposal from the Australian Sports Commission is gaining traction as the right step forward.
One Golf on the Table
If you were designing Australian golf from scratch, you wouldn’t use this current federated model. The existing structure is well over 100 years old and was set up at a time when it was the right model. But the world has moved on and the challenge is to come up with a structure that can serve the sport well for the next 50 years.
That’s the reasoning behind the One Golf proposal to bring the seven states (including the Northern Territory) and national body closer together. The proposal – similar to the changes adopted by Australian sailing – involves trying to wrap eight different companies into one operating body and centralise staff for better efficiencies.
Says Golf Australia chairman John Hopkins in the latest annual report: “There remains a strong and concerted effort to see the governance of Australian Golf become more efficient and unified and I believe this is an important initiative that must be seen through to its conclusion. To this end, work continues on the One Golf project and we hope to see State Associations start to come across to One Golf in 2017.”
Initial research indicates savings up to $3.5 million could be put into programs that are expected to lead to larger membership and participation numbers.
Five of the seven states and territories have agreed in principal to pursue the One Golf model. While supportive, a vote of their member clubs will still be required so it is far from a done deal.
But two large states are yet to even commit at board level. NSW is in a transitional period at board level and is still to be convinced of the upside to the model, while Western Australia is not supportive.
It’s more than a decade since Jack Newton, in a column for Australian Golf Digest, stressed the need for Australian golf to consolidate from the 26 bodies that were running the sport.
Since that time we’ve witnessed the merger of the Australian Golf Union with Women’s Golf Australia as well as the amalgamation of the men’s and women’s state associations. We’ve also seen the PGA of Australia and PGA Tour of Australasia come together. But there is little doubt wastage still occurs.
One Golf appears to be a solution for eliminating duplication and inefficiencies. But it will take more prodding of the recalcitrant states, NSW and WA, before they are convinced to come on board.
Then again, why should they? With total assets valued at $12.18 million, why would Golf NSW hand them over to a national body and its mandarins in Melbourne? And why would Golf WA trust the ‘wise men from the east’ to handle its affairs?
There’s always tension between state and national bodies as to who is more capable. Golf Australia says give us a chance to execute. The states respond by saying ‘put some runs on the board and we’ll give you some money’.
With the bounty raised from club affiliation fees, it’s imperative every cent is used wisely. Furthermore, the amateur bodies and professional golf must work together for the greater good. Consider this for a moment: Golf Australia and the state associations invest heavily in high-performance programs. Yet once elite amateurs turn professional, there is a dearth of four-round playing opportunities with sizeable prizemoney to launch an international career. Apart from Golf Victoria, the state associations don’t take a holistic view of the professional game and are reluctant to provide larger purses for their state opens.
So it’s all very well for Golf NSW to bemoan the fact the NSW Open was once a prestigious championship. Yet it only offered a meagre $110,000 in prizemoney in 2015. The purse only increased to $400,000 for last year’s tournament at Stonecutters Ridge as a direct result of the NSW Government’s desire to stage a sporting event in Greater Western Sydney.
And that’s another point. Amateur golf in Australia is the recipient of millions of dollars in government largesse (both federally and at state level). It also benefits from the generosity of white knights such as John and Jill Kinghorn, and Dr Haruhisa Handa.
A conclusion to be drawn is there’s a lot of fine people – salaried and voluntary – doing wonderful things for amateur golf. However, with combined total revenue of $35.8 million to administer the game, Golf Australia and the state associations don’t have a revenue problem.
Members |
Total Revenue |
State Affiliation Fees |
Golf Australia ‘Capitation’ Fees |
Staff Costs |
Cash |
|
Golf NSW |
146,174 |
$7,759,652 |
$3,100,287 |
$2,141,789 |
$1,743,254 |
$7,310,497 |
Golf VIC |
109,822 |
$7,262,118 |
$3,824,944 |
$1,542,871 |
$1,961,282 |
$1,330,192 |
Golf QLD |
66,496 |
$3,580,730 |
$2,366,847 |
$909,390 |
$1,045,048 |
$1,718,168 |
Golf SA |
25,822 |
$1,134,116 |
$642,000 |
$394,000 |
$492,422 |
$1,168,900 |
Golf WA |
33,439 |
$1,850,552 |
$810,686 |
$460,161 |
$723,827 |
$905,632 |
Golf TAS |
10,756 |
$567,589 |
$496,335 |
$161,905 |
$166,125 |
$551,756 |
Golf NT |
2,231 |
$370,951 |
$46,401 |
$32,241 |
$111,936 |
Not Recorded |
Total |
394,740 |
$22,525,708 |
$11,287,500 |
$5,642,357 |
$6,243,894 |
$12,985,145 |
Golf Australia |
397,063 |
$13,312,306 |
$5,726,046 |
$2,913,358 |
$2,858,837 |
Note: Golf Australia and the state associations have combined revenue of $35.8 million with total staff costs exceeding $9.1m
