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St Andrews: A Big Business
Breaking down the financials of the St Andrews Links Trust.
Every Monday, I write a newsletter breaking down the business in golf. Welcome to the 42 new Perfect Putt members who have joined us since last Monday. Join 3,626 intelligent and curious golfers by subscribing below.
Hey Golfers —
The 150th Open Championship begins this week at St Andrews — the home of golf.
Before we get into the business side of St Andrews — here are a couple of quick facts about St Andrews and The Open.
29 — St Andrews has hosted The Open this many times, more than any other venue.
239,000 — The number of spectators at the 2000 Open Championship, a record.
In 1974, the Town Council handed over control and management of the golf courses to a Trust — St Andrews Links Trust. The Trust operates as a charity and is exempt from income and corporate taxes on its charitable activities.
There are eight Trustees included in the St Andrews Links Trust.
The local Member of Parliament
One from the Scottish Government
Three nominated by the local authority
Three nominated by the Royal and Ancient Golf Club
The St Andrews Links Trust manages all seven golf courses — the largest golf complex in Europe. The best part? They are all open to the public.
The Castle Course
The COVID-19 pandemic was challenging financially for the Trust — revenues were down over $20 million, and total rounds dipped 72% in 2020. Because of this, let’s look at the 2019 financial filing to provide a better understanding.
The Trust managed to increase revenue each year from 2015 to 2019 — with a 10.6% increase in 2019, which is pretty impressive. Revenue in 2015 was $24.7 million, and in 2019 came in at $35 million.
Revenue is categorized into ten different buckets. The top three areas of revenue:
Golfing income represents 54% of the Trust revenue. Merchandise income comes in at 27.1% of total revenue, and Catering income represents 8.6% of the revenue.
Golfing income rose 6.7% in 2019 to $19 million — in 2015; Golfing income was $13.8 million.
Merchandise income has seen a significant jump from 2015 to 2019. In 2015, Merchandise income was $6.1 million; in 2019, it was $9.5 million. St Andrews operates a robust e-commerce platform — undoubtedly, e-commerce plays a role in Merchandise income.
For context — In 2019, there were 254,000 rounds played at the seven golf courses. An average of 36,000 rounds per golf course. If all merchandise revenue were completed on-site (and we know it isn’t), that would average $37 per round spent on merchandise, which is simply fascinating.
The most impressive financial metric is net income — and its growth since 2015. In 2015, net income was $1.2 million; in 2019, it came in at $4 million.
Visitors made up 54% of total play in 2019 — with most playing The Old Course, New Course, or The Castle Course.
While some may think $35 million is not ‘big business,’ it is important to consider that this is just the golf courses. The amount of economic activity the seven golf courses produce for the local area is significant. For example, the Kohler-owned Old Course Hotel did $22.7 million in 2019.
The Open will likely bring hundreds of millions of dollars to the Scottish economy this year. The 2015 Open at St Andrews was reported to bring $170 million to Scotland and $62 million to the Fife area alone.
The Open week is my favorite golf week of the year — nothing beats getting up at 3:00 am in the United States to watch the event. And with a newborn, that won’t be an issue for me this year!
Have yourself a great Monday. Talk to you next week!
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