One of the north’s most prestigious golf clubs has asked each of its members for a £1,000 ‘loan’ to raise enough cash to stave off potential administration.
And Balmoral Golf Club in south Belfast is also considering flogging its clubhouse and greenkeeper’s sheds and even reduced the course to nine holes as it continues to service a £1 million-plus debt on which is it paying tens of thousands of pounds a year in interest.
The club, founded in 1914 and which is most famous for its association with Fred Daly, the first Irishman to win The Open in 1947, wrote to its 450 members last month to lay bare its precarious financial situation.
The letter also gave three stark options to its membership (they already pay an annual subscription of around £1,400) as follows:
- Option one – Immediate appointment of an administrator;
- Option two – Members each lend the club £1,000 to cover the immediate cash shortfall; or
- Option three – Immediately sell around 25 acres of land to a third party developer.
In correspondence with members, which has been seen by the Irish News, the club admitted it has been burdened with “very high levels of debt from legacy projects”, and the requirement to service that debt has hindered its ability to invest in the course and its facilities.
It said increases in Bank of England base rate over the past three years have dramatically altered that debt burden and plunged Balmoral into a loss making position in 2023.
“Our inability to grasp the seriousness of the situation in a timely fashion led to a loss of confidence from our bankers, who made the decision to sell our loan to AB Carval in 2023,” said the letter, which is signed off by the Balmoral club council.
“However, we have made some progress in discussions in recent weeks and have some expectation that they may be prepared to accept an amount less than par value for the £1 million debt we owe.
“At the same time as seeking to negotiate on our legacy debt position, council sought to ensure that the core trading business returned to profitability so that any remaining debt was able to be managed/repaid and to provide some surplus for reinvestment in the course and facilities.
“Key areas of focus have been retaining or indeed increasing membership numbers, driving income from our bar and catering facilities, enhancing revenue from visiting clubs and societies and enhanced third party income from advertising and other sources.”
But the letter says that, despite its strenuous efforts, improvements in bar revenue post-Covid have been “negligible” while there has also been a “significant decline” in membership, which has had a material impact on our revenue and on the club’s ability to continue trading.
The three scenarios put to the members come with a number of caveats and uncertainties.
The £1,000 loan option could, it says, “deliver a credible plan to turn around the business with a realistic prospect of success”, but would include an option to sell the existing clubhouse, greenkeeper sheds and adjoining land to a third party developer in return for a new smaller clubhouse near the 18th green, new sheds on surplus land at 13th hole, and £600,000 in cash.
The land sale option would help with a recapitalisation of the balance sheet, but could ultimately see Balmoral become a 15-hole, 12-hole or even nine-hole course.
The club – which has for many years spurned lucrative offers to vacate its 85-acre parkland site between Finaghy and Balmoral, most recently in 2020 – is currently considering the response from its members.
In September it emerged that the Dublin-based Merrion Property Group, which bought a 149-acre estate at Drumbo in 2020 as part of a bid to relocate Balmoral Golf Club, has now put the site on the market.
Merrion, which is owned by property developer Michael Roden, evend commissioned former Ryder Cup captain Paul McGinley to design a new championship course as part of efforts to convince Balmoral members to vacate their course.