Progress in modern golf clubs comes in many forms. Increasingly during the past 30 years, Australian golf clubs are forming mergers with other golf clubs, rival sporting codes and external licensed premises.
A marriage of convenience would best describe the formation of Oak Point Golf Club through the amalgamation of the Kogarah and Liverpool golf clubs. The two Sydney clubs arrived at the altar from different journeys but with a determination to make the most of their recent struggles.
Kogarah had courted a number of suitors to form a partnership. Members of the 97-year-old club at Arncliffe alongside the Cooks River and Sydney Airport had been playing a 15-hole layout for a decade after the acquisition of part of their course for the WestConnex motorway project in 2015.
Kogarah owned almost half of the 39 hectares on which its course sat. The remaining 20.5 hectares belonged to Bayside Council, Sydney Water Corporation, Roads and Maritime Services and Sydney Airport. But volatile lease arrangements meant Kogarah would need to sell its land if members wished to ever play an 18-hole golf course again.
Kogarah will receive “north of $50 million” after the sale of its 18.5 hectares to John Boyd Properties, which is planning a commercial precinct on the Arncliffe site. The proceeds will be invested into the new Oak Point Golf Club on the former Liverpool site at Lansvale on the banks of the Georges River in Sydney’s west.
This recent trend of mergers and amalgamations gives rise to what may be termed a ‘superclub’. This pooling of resources and financial funds appears to be the future of golf in Australia.
A marriage of convenience: Oak Point Golf Club
The selection of Liverpool to partner Kogarah was the culmination of a lengthy process that considered as many as 20 golf clubs across southern and western Sydney. Of those potential suitors, 12 clubs didn’t own their own land – hence ruling them out of consideration. The remaining eight clubs were whittled down until Liverpool emerged as the best fit for a merger partner.
Apparently, the 30-minute journey from Arncliffe to Lansvale – a lengthy 90 minutes in peak hour – wasn’t a precluding factor. The reasoning behind choosing Liverpool was its capacity to take on new members. Liverpool had 1,015 full-playing members and Kogarah had approximately 600 members when it closed on March 31 this year.
“It was an amalgamation sought through opportunity on both sides. Kogarah was obviously getting eroded by all sorts of problems on all sides,” says Robin Taylor, Oak Point’s inaugural chief executive.
“Liverpool was decimated by the floods and the extreme wet weather of 2022. They lost 200-plus members as a result of the course being unplayable for a long period of time. It was more than 160 days of not being able to get the carts out to play golf. A number of members just walked away and left the club.
“So when Kogarah was looking for someone to amalgamate, the benefit of Liverpool was: here was a club that owned its own land. Which was important from their perspective. But the other component was, given the exodus of members they’d just had, there was capacity to absorb the Kogarah membership as well initially.”
In a competitive market – Bankstown Golf Club, Brighton Lakes Recreation & Golf Club and Georges River Golf Course are all within a five-kilometre radius – the Oak Point strategy is to become the premium golf facility in the area and make it an aspirational club.
As part of Oak Point’s rebranding, the existing Liverpool clubhouse will be upgraded, while a new maintenance facility and cart shed will be built. In excess of $20 million will be used to create a future fund that will be invested to provide regular returns for further improvements without having to impose a levy upon members.
Architect James Wilcher will undertake a full-course renovation and Oak Point will be unrecognisable from the current Liverpool layout that hosted the New South Wales Open twice (2004, 2005) and the 1974 Australian PGA Championship won by Billy Dunk. The redesign will feature contours and slopes so the course can drain faster and recover better from flood events. (Interestingly, any alterations must avoid causing changes to the flood pattern so as to not displace water elsewhere along the Georges River. Nor is Oak Point allowed to do anything that will intensify operations, such as a major increase in patronage to the venue on a regular basis.)
Superclub pioneer: The National Golf Club
The National Golf Club was the trailblazer for the Australian ‘superclub’. What began as an idealistic dream has morphed into a 72-hole behemoth at two locations: three courses at Cape Schanck on Victoria’s Mornington Peninsula and a fourth layout at the former Long Island Golf Club at Frankston in south-eastern Melbourne.
Melbourne entrepreneur David Inglis conceived of The National as a private golf club with a transferrable membership share model – a foreign concept in Australia at the time. The National’s original ‘Old’ course, designed by Robert Trent Jones Jnr, opened in 1988. The club had the opportunity and appetite to pursue expansion during the next decade and two duneland courses were added in 2000 – the Moonah by Greg Norman/Bob Harrison and the Ocean by Thomson Wolveridge Perrett (later renamed Gunnamatta after Tom Doak’s redesign).
That “responsible but entrepreneurial spirit” was evident again when The National pounced on an opportunity to add Long Island to its portfolio. About 70 percent of The National’s 3,200 playing members reside on the Melbourne side of Long Island/Frankston and 30 percent on the southern, Mornington Peninsula side.
Some may describe The National’s behaviour as opportunistic in the manner it went after and acquired a ‘distressed asset’ such as Long Island with antiquated facilities. But at the time Peninsula Kingswood Country Golf Club had emerged as a rival superclub after Kingswood Golf Club sold its property in Dingley for $220 million, which lead to its members joining the cashed-up 36-hole Peninsula Country Golf Club at Frankston.
The National has 2,010 transferrable memberships across six classes of membership. They range in price from slightly more than $50,000 for an individual membership (C Class) through to a corporate membership (F Class) priced at about $400,000 with playing rights for two corporate nominees. Members pay an annual subscription fee of $6,000 while an additional $600 levy applies to all membership categories.
“The person who owns that share has a liability for the subscription until they sell that share to someone else. And from that moment it becomes someone else’s responsibility. So a share always has a subscription coming in,” says Matthew Corby, The National’s chief executive officer.
“Whereas take a club with 1,000 members. They lose a member, they get one fewer subscription. We have shares, and they are fixed and they’re always owned by someone. The only thing that changes is the value of the shares.”
Another point of difference with The National is that its reputation has been established on two key anchors: the quality of the courses and the dining experience. The ambition is to present both at the highest level.
“Golf clubs do operate in a challenging environment,” Corby adds. “It’s not easy setting up an equity model such as The National. A share model. We’re in a very strong position. We’ve got a very good model and we have some economies of scale. I think our model keeps our club better insulated from those threats than may be the case for some others, but like any club, the challenge to renew assets is ever-present.”
Forward thinking: Cranbourne, Huntingdale… and Metropolitan?
The recent merger between Cranbourne Golf Club and Huntingdale Golf Club appears to be a positive outcome for both. Cranbourne was faced with a forced closure while Huntingdale had been pursuing a major redevelopment of its storied Melbourne Sandbelt course.
The Cranbourne Golf Club was a lessee of Cranbourne Country Club, which was the holding entity for its parcel of land in Melbourne’s south-east growth corridor. Brown Property Group paid $190 million for the 70.4-hectare property with plans to develop it into a residential estate with as many as 1,350 homes.
For Huntingdale, the merger with Cranbourne allowed for an immediate injection of $10 million for a course upgrade by Ogilvy Cocking Mead (OCM) that will be completed late this year. In exchange, Huntingdale would gradually accommodate Cranbourne members over the coming years.
In a further development last year, Huntingdale and its neighbour The Metropolitan Golf Club have announced they are also considering a merger. The clubs share a common boundary and an under-used road separating the two courses.
Metropolitan has modernised its entire 18-hole layout with a greens restoration program/course enhancement plan during the past 18 months. The seven-time host of the Australian Open is now looking towards the future and considering the options of creating the first new superclub in the Melbourne CBD – or any Australian capital for that matter – with two world-class courses.
Metropolitan’s 2025-2028 Strategic Plan stated it is aiming to generate operating cashflow of $2 million per year by 2027 and grow the size of the club’s foundation to $10 million by 2030. It will: “Continue to explore opportunities to enhance the club’s offerings, strengthen the member value proposition and diversify the revenue model, which includes finalising the assessment of the opportunity to amalgamate with Huntingdale Golf Club.”
To an outsider, a Metropolitan/Huntingdale merger appears to be a match made in heaven. With two outstanding courses, it would offer greater variety than simply joining Kingston Heath Golf Club or Victoria Golf Club. The efficiencies at operational level also make sense. One larger clubhouse instead of two smaller buildings. One general manager instead of two. One maintenance crew with 30 staff instead of two crews each with 20 staff. One maintenance building instead of two sheds. In the kitchen, one top chef with four assistants instead of two top chefs with six assistants. However on the flip side, it might be 20 or 30 years before the majority of club members were never associated with either Metropolitan or Huntingdale. Hence it would probably be a generation before the division – the sibling rivalry that once existed – between the two clubs disappears.
Hence, if Metropolitan Golf Club – already one of the world’s finest golf facilities – is prepared to consider an amalgamation, then it stands to reason more superclubs may emerge in coming years. Less fashionable clubs – especially those with ageing facilities – may need to think about partnering with another golf club, rival sporting code or an external licensed premise.
“To become a superclub and look at the ongoing viability, all clubs need to look at their balance sheet and cashflow projections,” says Ray Ellis, chief executive of Century 21 real estate. “If 30 percent of their membership are going to [disappear] within the next 10 years, well that’s a reduction of $1 million a year. How are they going to replace those million dollars a year?
“It’s not heritage, patriotism or loyalty. It just comes down to forecasts of membership and cashflow. So how are they going to solve their cashflow issues with not enough young people coming through with the time, money and effort to maintain a golf club the way it’s been traditionally maintained?
“The chances of a young person playing golf every week and buying lunch or dinner at the golf club with their friends afterwards is gone. So where are the clubs going to replace that money and maintain their club?”
Case study: Devonport Country Club
Once upon a time it was regional golf clubs partnering with a local sporting club or an RSL to secure their financial future. Historically, golf clubs in small country towns have struggled to survive on their own with a sparse population.
Increasingly, however, metropolitan golf clubs – many with ageing assets and infrastructure – are seeking ways in which to ensure their long-term viability. One solution is selling off their own land to fund a course renovation or clubhouse redevelopment. But that’s not an option for tenant clubs under a leasing arrangement. Bankstown Golf Club (with Bankstown Sports) and Campbelltown Golf Club (Campbelltown Catholic Club) are two Sydney facilities that have sought management from a larger club with deeper pockets.
Struggling golf clubs need look no further than Devonport Golf Club in Tasmania’s north-west. The club faced severe financial challenges given the population base of less than 30,000 in the greater Devonport region. It also faced competition from six golf courses within a 20-minute drive. Most of these predominantly volunteer-run clubs offer relatively cheap golf in one of the lowest socio-economic areas in all of Australia.
With a fight for its survival, Devonport Golf Club formed a steering committee in 2017 to explore the benefits of a potential amalgamation. With the urging of former Federal MP Brett Whiteley, it approached Devonport Bowls & Croquet Club and Spreyton Bowls Club with a proposal to join them at the golf club site in Spreyton just five kilometres from the Devonport city centre.
The proposed entity now known as Devonport Country Club secured $11 million in government funding to build a larger modern clubhouse. The conditioning of the grants from the federal and state governments was that a ‘superclub’ be formed to maximise the efficiencies of the infrastructure.
The two bowls clubs relocated to the grounds of the Devonport Golf Club to form a multi-sports facility that comprises three outdoor turf bowling greens, two croquet lawns, an eight-rink indoor bowls centre, 180-seat function centre, 120-seat sports bar, sports shop and administration offices. The Devonport golf course originally designed by Vern Morcom underwent a couple of tweaks to accommodate the larger clubhouse as well as the addition of a new irrigation system.
After some initial teething problems after the onset of the COVID-19 pandemic, Devonport Country Club is well on the path towards a vibrant future. It is turning over more than $3.5 million from sport and clubhouse operations – about three times the revenue of the former golf club. The golf course has never looked better and superintendent Craig Walker received the highest accolade in turf when he was the 2023 recipient of the ASTMA Excellence in Golf Course Management Award. Later this year Devonport Country Club will host the 2025 national bowls championships.
But in the absence of the merger it would be unlikely Devonport Golf Club would be anywhere near its current state. In fact, it may not have remained as an 18-hole golf course given the property is a valuable piece of real estate.
“This place has really benefitted from a government grant more than a sale of land,” says Devonport Country Club general manager Brett Kerr.
“While it’s taken a little while, members of the three clubs are integrating really nicely. Annually, we have a one-club event where the champions of all three sports come together and acknowledge the joint successes… The three sports genuinely share the facility within a very good spirit of camaraderie.
“What we are achieving here in the demographic is outstanding. We’ve bucked the trend and put something good together in an area that may not have been able to do it by itself.”
Strength in numbers when considering a merger
For a merger to succeed, the partner club would have to be interested in golf and willing to expand its offer. What the Devonport story reveals is how it’s essential golf clubs look beyond tomorrow to secure their long-term future.
“I encourage more to look at it while they’re in a stronger position [rather] than being in a weaker position. They’ll get a better outcome,” says Jeff Blunden, managing director of Golf Business Advisory Services who assisted with the selection of Liverpool to partner Kogarah in the formation of Oak Point Golf Club.
“If you designed this world again, you’re not having all these separate facilities. You’re going to have a golf club next to a cricket club, next to a netball club, next to a bowls club. And they’re all going to use one building.
“This is really the world realising that it’s about scale and strength in numbers. Scale is very important, particularly when you’re controlling building assets. A 1,000-square-metre clubhouse is going to cost you the same amount of money regardless of [whether] you’ve got 500 members or 1,000 members. But the 1,000-member club is going to have more money to spend because it’s got [more] customers.
“Park your ego and see what greater good can come of coming together.”
