Accompanying Statement from Board and CEO of Scottish Golf Limited to accompany notice of General Meeting Purpose and Headlines The proposers of the ordinary resolution to increase the per capita to 14.50 ("Resolution") have asked Scottish Golf Limited ( SGL ) to provide some additional information to assist you and your constituents in your deliberations prior to the General Meeting. The purpose of this document is to provide information and further clarity regarding the strategic priorities of SGL: in relation to the investment choices that SGL will make if the per capita is increased to 14.50 in accordance with the Resolution and; in relation to the cuts that SGL will need to make for its financial year commencing October 1 2018 based on a per capita of 11.25. In the event that the Resolution is passed, SGL will: commit to freeze the per capita at 14.50 until 2022 to tie in with the strategic priorities. It is worth noting that any increase approved would be the first increase of the per capita charge since 2015; seek the support and co-operation of its members to work with SGL to provide relevant membership data that will allow a solution to be sought to the current per capita multiple membership issue that exists for golfers who are members of more than one affiliated SGL club; increase investment in key priority areas to assist clubs and grow income from the nomadic golfer for reinvestment in the game in Scotland; provide free of charge digital solutions to golf clubs that will assist with the management of their clubs and which will be optional to utilise; and limit the cuts that it is currently planning to make for financial year 2018/19. SGL s Financial Situation and Strategic Priorities At the AGM in March 2018 SGL Non-Executive Directors Malcolm Kpedekpo and Stewart Darling made presentations following on from the presentations they made at the Scottish Golf Future of Golf Conference in December 2017. Malcolm clarified the difficult financial situation SGL had faced since amalgamation including the drop of income (primarily due to falling membership and funding cuts) and the consequential staff cuts that had been necessary during that time. A link to his presentation together with accompanying notes is attached in the appendix to this note to allow you to understand further the backdrop to where SGL is now as an organisation and its financial situation. Stewart s presentation focussed on the new strategic priorities of SGL and, a link to this is also attached in the appendix should you also wish to re-familiarise yourself with this presentation. You will also find in the appendix further detail of the three main priorities of SGL through to 2022 (this ties in with SGL s SportScotland four year funding round). Investment and cutbacks If the proposed 14.50 per capita is approved and assuming that the monies received by SGL are based on a membership of 170,000 this would equate to an additional 552,500 of monies to allow SGL to increase its investment in certain key strategic priority areas and also to consider again some of the proposed cutbacks for financial year 2018/19.
Area of Investment Strategic Pillar and Specific Area of investment Game/Growing the Game: Junior Programme Game/Growing the Game: Additional Marketing and Communications Resource Game/Growing the Game/Improving Finances: A new non compulsory free of charge IT system to assist clubs with their needs and specifically to offer a solution for Scottish Golf Clubs in relation to nomadic golfers. Description Benefit Potential Annual Investment A number of junior programmes have been tried over recent years and there are currently many such programmes in existence both through golf bodies and commercial bodies, with varying degrees of connectivity. SGL would seek to create a national programme that would provide a strategic focus from the centre and harness the excellent work being undertaken by existing golf foundations. This collaborative approach would be rolled-out across the country to help juniors get into golf and remain as part of the Scottish Golf Family for the rest of their lives. Provide additional in-house marketing, commercial & communications capacity that can provide support in these key areas to golf clubs An optional digital platform provided free of charge that will provide a number of modules for clubs to consider, based on their needs. The full detail of this will be developed based on feedback following a trial period but could include features such as: Membership Management Tee & Facility Bookings Tournament Management Handicapping Communications Portal There is an ageing membership and it is vitally important for the future of golf that ways are found to encourage the next generation to try golf and thereafter to keep playing. Although there are many great schemes in existence a nationwide programme would help to create a consistency of message across the country and ultimately would help to bring more people into the game of golf in Scotland. Feedback from clubs has indicated this would be a welcome resource for many of the smaller clubs that are heavily reliant on volunteers. This is also a complicated fast changing area where SGL can assist clubs to keep up to date with the latest developments. This assistance will be important to clubs in maintaining new members and also in communicating more effectively to current members. This will be provided at no cost to clubs many of whom pay significant amounts for their current systems. It will not be mandatory and will be designed specifically to link with current systems should clubs wish to retain these. It will also be developed to allow it to be used by nomadic golfers as well as current golf club members. Currently the pay per play golfer has multiple ways in which to play golf in Scotland, with most of the money raised in this way leaving the game and going to 100,000 50,000 150,000
third party commercial entities. SGL believes that it is incumbent on it to look for alternative models to allow this money to be kept in the game and reinvested in its key strategic pillars. Development of this system could be truly transformational to the game in Scotland. Growing the Game: Financial Support for Clubs Growing the Game: Improve the education offering for clubs Building on the early success of Buying Group, there is a potential to explore course specific spend and help clubs to take advantage of opportunities to share resource at local levels. Greater more focussed and relevant education opportunities for staff and volunteers in golf clubs, through face to face and e-learning platform delivery that can be undertaken at minimal cost and consumed at times to suit individual needs Clubs continue to tell SGL that they would like additional opportunity for savings in course related spend as well as club house related spend. By providing further support in this area SGL believes that clubs could make further significant savings to those already made through the Buying Group. Based on feedback from clubs SGL understands that education, training and development of staff are key to the continued success of their operations. Accordingly, SGL believes that focussing further investment in this area will be of significant benefit to clubs that choose to use the club services made available to them. 75,000 75,000 Other investment As well as the three key priorities there are a number of activities that SGL would look to continue including creating champions, staging events, overseeing handicapping and ensuring it has appropriate leadership and governance structures. As you would expect, SGL will refocus and refresh how these are done to ensure that best value for money is achieved. This includes the running of events and also a refresh of the SGL performance pathway. It is important that SGL has an appropriate events calendar for golfers of different abilities to participate in. In addition, it is important for the future of golf in Scotland that there is an appropriate performance pathway to allow the creation of future champions both at amateur and professional level. These players will in turn become the new role models for future generations of golfers to aspire to and to encourage new people to take up golf which is a key priority for SGL. Cutbacks If the per capita increase is approved, in addition to focusing on the investments set out above, SGL would also look again at the cutbacks currently proposed for financial year 18/19 with a view to determining whether some of these should be reinstated on the basis that they are important to assist with the delivery of the key priorities. The key points to note are as follows: Projected reduction in investment for financial year 2018/19 of c 320k. This will bring the cutbacks made since amalgamation to more than 1M and;
Staff overheads have been reduced by not replacing staff leavers or through redeployment of headcount into other priority roles in the organisation. Since amalgamation, SGL has lost a third of its staff and cannot afford any further staff cuts if it is to deliver on its strategic priorities and; Given the priority to assist clubs, SGL is looking to limit cuts in the Development area but will be making cuts for 18/19 across all teams including Events, Development, Marketing, Performance and Admin. The impact across the business is summarised as follows: Development c4% less investment; Administration, Marketing & Central Overheads c15% less investment; Events c25% less investment and; Performance c25% less investment. Additional Information/Questions The Board and Chief Executive Officer of SGL are aware of our duties and accountability to serve you as our members. If you would like any of us to further explain any of the above in advance of the GM or indeed at any time we would be happy to do so. It is vitally important to us that you fully understand what we are looking to spend your money on to help with the difficulties currently faced by the game in Scotland. To this end, should you wish to contact us on this matter then please use the following email address: info@scottishgolf.org Many thanks for your support to date as we look to drive Scottish Golf forward to a more prosperous future. Scottish Golf Limited, Board and Chief Executive Officer September 2018
Appendix to Accompanying Statement re General Meeting Links to presentations https://www.scottishgolf.org/wp-content/uploads/scottish-golf-agm-financial-overview-presentation-mk.pdf https://www.scottishgolf.org/wp-content/uploads/notes-to-accompany-the-finance-presentation-at-sgl-agm.pdf https://www.scottishgolf.org/wp-content/uploads/scottish-golf-agm-strategic-priorities-presentation-sd.pdf
Strategic priorities Game Objective: Increase national membership to 200,000 with a 15,000 growth in women and juniors Develop a club-centric national participation programme and partnership framework for juniors and adult beginners Establish a Women in Golf Charter to help create welcoming club environments for women and families Build an engaged network of volunteers to support the delivery of grass roots coaching Growing the Game Objective: 50% of participating clubs showing revenue, membership and/or participation growth Realign our development workforce to meet the needs of our clubs aligned to our strategic objectives Develop accessible education programes for Club Managers and Volunteers, delivered nationally, regionally and remotely Develop future Golf Club models across different categories of club Support clubs to develop a professional management workforce with digital and marketing capability Improving Finances Objective: Grow revenue to 6M with more than 50% of income from nonmembership streams Build a non-member digital platform to encourage afffiliation to Scottish Golf Secure sponsorship for the diversity and inclusivity initiatives aimed at driving growth of women and juniors in the game Use our national assets to grow advertising and access rights for suppliers Provide an option for clubs to utilise basic management software and potential national teetime booking system that would put clubs in control of their pricing and generate income from nomadic golfers We will continue to focus on: Creating Champions Staging Events Handicapping Governance & Leadership