Mergers and Acquisitions

The Masters Tournament tees off today at Augusta National and you can’t help but be sucked in by the sheer majesty of the event, the course and its clubhouse. Few things in sport come close. On Tuesday evening it was the Champion’s Dinner where the current title holder, Dustin Johnson, chose Filet Mignon followed by Peach Cobbler & Apple Pie for dessert. Past champion’s congregated, secluded on merit from the hoi polloi vying to try and make it into the most exclusive club in the world. Tales of rescues on the 12th and dunks into Rae’s Creek were swapped by the champions between courses with the greats of the sport and those that had ‘one of those weeks’ resplendent in their green jackets. Marvellous.

In tennis, Wimbledon is the event that every player wants to win and the All England Lawn Tennis Club strikes the same reverence with its utterly immaculate presentation, impeccable history and undoubted style. It’s a jewel in the world’s sporting crown.

And in sailing we have the Royal Yacht Squadron that, in my opinion, leads the way in the prestige stakes followed by the New York Yacht Club with its Manhattan and Newport clubhouses. The Squadron is a special, hallowed place akin to Augusta and Wimbledon where the chances of becoming a member are zero to none for most of us. Global clubs follow their lead in everything from race management to organisational structure with most looking on with envy at the way they operate and manage to stay ahead of the game. Throw the America’s Cup their way. No sweat. Just another regatta. It would be magnificent and brilliantly executed.

The New York Yacht Club certainly competes for grandeur and immaculate presentation whilst seeming slightly more welcoming on the membership front if you make the sailing grade and can hold a knife and fork correctly. Almost every other club in the world is a pay-your-fees and come and join us affair after a successful navigation of the membership procedures that are there to enforce a criteria designed to keep the supposed riff-raff out.

But club memberships around the world and at a local level are dwindling. The young coming through are eyeing some of the relics of Victoriana with suspicion. “So what exactly do I get for my membership fees?” is the common question. “Should I buy a gym membership or renew at that club which I barely visited even before the pandemic?” Big questions that have the great and good on the committees spluttering.

Model Room NYYC – ©KOS Picture Source / www.kospictures.com

And in the main, for the so-called prestige outfits that litter sailing, those are tough questions to answer. What facilities are we offering that are attractive to the time-poor, attention-less generation that don’t necessarily buy into or even recognise the social standing? At a dinghy level it’s a bit easier – somewhere to change, a spot of weekend racing and race training, the odd regatta, perhaps a shower afterwards, maybe a Diet Coke in the bar and a disco in the summer and a good set of people all with a common purpose.

At a yacht club level it’s all about the bar, social functions, sailing fleets and dining facilities – perhaps even accommodation akin to boarding school – and sailing is a social activity amongst friends and like-minded individuals. The Euro clubs started to take it to another level with a beach-club feel replete with swimming pools, sun loungers, gyms and waiter service but they charge a pretty penny for the privilege and I can see the attraction – whether that works in West Kirby or Largs is another matter. UK clubs are all vying for members with many now having a designated membership bod on the main committee. Tough gig. And for some, particularly the ‘Royal’ clubs, it’s becoming a case of merge or die. The fight for survival is real.

©KOS Picture Source / www.kospictures.com

The hardest job in sailing right now though is Treasurer. Shekels aren’t flowing. Regattas and socials are being cancelled. The building still needs repair and the furlough scheme, a lifeline for many, is slowly being reeled in. The clock is ticking. The strategy of getting them in young, keeping them into high earning middle years and slowly reducing fees into old age is a well-trodden strategic membership path. That was the model of old, married with an element of prestige and local community but is it enough now?

Clubs without a USP and with low acquisition rates are dying with their memberships. Vision is required and this is where the major clubs are eyeing capitalisation. If you’re the Royal Yacht Squadron, Royal Ocean Racing Club or the Royal Thames in the UK, buoyed by a committed rich membership, you can cherry pick right now. Need a clubhouse to put the juniors in or simply to have more accommodation? Buy the club down the street. Need a summer base for sailing on the south coast – take your pick. They are all open to offers. Just like in business, the current climate favours the big boys, the Amazons, Googles or Microsofts of sailing who, with a bit of vision can emerge from the pandemic not just strong but thriving with new or acquired members and new facilities. Consolidation is the name of the game in UK right now. It’s inevitable, unstoppable and there are some absolute gems on the market for those willing to be brave.

©KOS Picture Source / www.kospictures.com

But the euphoria that is about to be unleashed through the pent up demand for all things waterborne is real. The America’s Cup whetted appetites to get back out there and the mini-boom for the chandlers, sailmakers and all the related service businesses is like a tsunami wave waiting to crash on the shore. Yacht clubs have a golden opportunity of reinvention and it’s an opportunity that happens once a century, if that. I’ve been a member of a club where the past commodore used to say: “use it or lose it” and he was absolutely right.

For those clubs that survive, they are now at the mercy of their memberships to get back in and support. That means saying “yes” to the Tuesday night racing and the curry afterwards. That means saying “yes” to the delayed anniversary dinner or the Commodore’s lectures with the obligation to put money behind the bar. It means paying those subs that have sat in the ‘in’ tray since January. And at a local business level it means supporting your local chandler and to hell with the fact that you can buy that shackle for a dollar cheaper online. It’s buying that spinnaker from your local sailmaker or getting the hull polished by the local yard. If we don’t, we’ll lose those vital, vibrant services forever.

Be under no illusion that the sharks are circling eager to capitalise and consume anything that has a hint of shine. It’s up to all of us to support where we can and if consolidation is proposed, accept it with good grace. At the end of the day, those in power at Clubs are doing what any responsible company officer would do and that is to ensure survival. The past year has seen a welter of change in almost every industry and entity – the next year will witness unimaginable change in the structure and support of our sport. Change is blowing in the wind. What will emerge is a strong, vibrant sailing scene better insulated to weather future storms. Sailing will come together like it always does.

I’m predicting a golden era just up ahead. There will be bumps and there will be mergers. Some will fall by the wayside but fast forward a few years and we will look back on this period as a reset ahead of a grand explosion in participation, design, development, structure and organisation. Get ready for the ‘Roaring 2020’s’. Mark my words.

2 thoughts on “Mergers and Acquisitions

  1. Some interesting words on our Clubs here. However one thing seems to be missing, YACHTS NEED CREW ! What Yacht Club seeks to encourage crewing members. I would propose offering Special Crewing Memberships, and training, could well increase footfall all around our sport.

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