The Value of the Gary Player Name in Golf Architecture For more than a decade the Golf Research Group has conducted specialised research into the business of golf world-wide. The Golf Research Group maintains a database of every golf course globally, currently tracking over 30,000 courses around the world. The Golf Research Group is the largest publisher in the world of business reports for the golf industry. A complete catalogue of current publications is listed in appendix A at the back of this report. The company provides consultancy services to many of the largest golf companies operating in the golf industry. A selected list of clients is included in appendix B at the back of this report. The Group’s findings receive widespread press commentary around the world. Consultants from the Golf Research Group frequently speak at industry conferences and provide interviews on business programs for radio and television.

Research Methodology
The Golf Research Group maintains a database of every golf course world-wide. This data is updated via an annual telephone surveys. There are currently 30,866 golf courses in 124 countries around the world.

As part of this survey detailed price information is collected for each golf course: green fee prices, membership prices, golf real estate prices. In addition, the number of memberships sold each year and the number of fairway properties sold each year are tracked.

Using this database it is possible to assess the value that a particular golf architect’s name brings to a golf project. All the projects by a particular name architect can be collected together to obtain an average price performance for that architect’s work. The average price for green fees, membership, membership dues and golf real estate is calculated for every leading golf architect.

The Net Present Value (NPV) Of An Architect’s Name
When a new golf course opens for play it may look forward to a series of four major future income streams from:

• The sale of green fees
• The sale of memberships
• The sale of membership dues
• The sale of real estate

The value of each of these streams of future income can be expressed in today’s money by discounting back income expected in future years to express the value of that money today. For example, a million dollars in the bank today is clearly worth a million dollars, but a million dollars that will be received one year from now is worth less than a million dollars. The difference in value is the discount rate. A discount rate of 5% may be used, reflecting the cost of a commercial loan, in which case a million dollars one year from now is worth $952,000 in today’s money. In other words, $1 million dollars in a year’s time is worth $952,000 in today’s money since $952,000 could be invested in a bank account today to grow to $1 million in a year’s time a ssuming the interest rate was 5%. The golf architect valuation model actually uses a seemingly more punitive discount rate of 15%. Using an 15% discount a million dollars, a year from now, is worth $847,000 in today’s money. The 15% discount rate is used by the US Association of Golf Course appraiser and is industry standard for golf development projects.

The net present value (NPV)of green fee income is the sum of all anticipated future income from green fees discounted back and expressed in today’s money. The NPV of membership sales, membership dues and real estate sales is derived in the same way.

The average performance of real estate for each architect is expressed in a variable called NPV RE 300. This refers to the net present value of the real estate for 300 houses. This adjustment controls for masterplan size allowing accurate comparison of the real estate performance of different architects.

The NPV of an overall golf development is the sum of the NPV’s of green fee income, membership sales income, membership dues income and real estate sales.

The NPV for an architect’s name is the average NPV of all that architect’s projects. Thus if an architect has fifteen projects, the NPV is the average value delivered by those fifteen projects.

Why Use a Recognized Golf Architect?
The major message coming out of the table below is that it is well worth using a recognised golf architect. The architect’s fee, whatever it may be, shrinks into insignificance when compared with the uplift in pricing and rates of sale that their projects achieve.

Given the obvious value of using an architect it is not surprising that around 85% of new golf developments are designed by a known architect. Other developers either design the course themselves or use a local pro. The phrase is heard again and again, “I’ve played golf for twenty years, I can design the course myself”.

Worldwide Performance

There is a very select group of name brand golf architects who have a proven track record of delivering top quality designs worldwide. These leading names with proven worldwide experience are ranked by value in the table below.

Note: The above table lists projects opened for play by Gary Player Design since 1987

USA Performance

The table below lists the fourteen leading golf architects in the US market. This table related to all golf courses opened in the US market in the ten year period 1993 to 2003. The table is ranked in order of average NPV value delivered by the projects designed by the different names.

Gary Player’s Recent Performance In The USA

The financial performance of the Gary Player courses that have opened in the US since 1998 has been exceptional. The table below summarises the performance of the five Player courses that have opened in the US since 1998. The average NPV of golf sales at these projects is $88.1 million, the average NPV of the real estate is $84.6. While Gary Player has not been as prolific in the US as other lead name designers the projects that he has designed have enjoyed exceptional performance.

Since 1998 Gary Player has opened five courses in the US: Glenarbor, Manhatten Woods, The Wolverine, TPC of Jasna Polana and The ACE Club. The average green fee across these five clubs is $210. Average joining fees and annual dues are $104,000 and $10,160 respectively.