How Not to Conduct a Competition -II

The USGA goes to great length to explain “How to Conduct a Competition.”[1]  Unfortunately, the USGA does not warn of handicapping mistakes that lead to unfair competition.  Many of these mistakes involve competitors playing from different tees.  What tournament committees (TC) often neglect is that Course Handicaps from different tees should only be applied to net tournaments involving stroke or match play. Course Handicaps are not a cure-all that can be applied to every form of golf competition.[2]  This post examines a tournament where the limitation of the handicap system was not recognized and resulted in inequitable competition.

•  Giving Gross Prizes When Competitors Can Choose Which Tees to Play – In this tournament teams were allowed to choose which set of tees they would play.  Flights were then constructed based on the combined Handicap Indexes of each two-man team.   Flights could have teams playing from the back tees and the forward tees.  Each flight would have gross and net prizes.  In the gross competition, teams playing from the shorter tees would have an obvious advantage. The TC should have recognized that this format was unfair, but it did not.   The mistake probably stemmed from the TC tradition of always paying equal gross and net.  Unfortunately, putting “equal” in the title does not make it so.[3]  The remedy to ensure equity is to have all competitors in a flight play from the same set of tees and eliminate “equal gross and net payoffs.                                                                                                                                             
• The Mistaken Belief that Course Handicaps from Different Tees Make a Scramble Competition Equitable – The use of Course Handicaps from different tees in a scramble competition is not equitable as can be seen by example.  Assume we have two teams made up of a 12-handicap and a 15-handicap player.   Further assume one team chooses to play from the longer white tees while the other team chooses to play from the shorter forward tees.  Lastly, assume the move to the forward tees reduces the handicap of each player by four strokes.  The USGA suggests a team handicap should be 35% of the low player’s handicap and 15% of the high player’s handicap. The scramble handicaps for each team are shown in the table below:[4]

Team	Low Handicap	High Handicap	18-Hole Handicap	9-hole Handicap
White Tees	.35 x 12 = 4	.15 x 15 = 2	6	3
Forward	.35 x 8 = 3	.15 x 11 = 2	5	3

As the example shows, using Course Handicaps from different tees does not ensure fair competition.  If the competition was held over 18 holes, the white-tee team would only have a one-stroke advantage to compensate for over 600 yards in distance.  In the 9-hole competition both teams would have the same handicap.  In essence, teams opting for the forward tees instead of the white tees (or opting for the white tees instead of the back tees) incurred either no reduction or at most a one-stroke reduction in their scramble handicap for making that choice.   This demonstrates the uneven playing field inherent in the tournament format.   Again, this problem can be corrected by having all competitors in a flight play from the same tees.

•  Horse Race Format – It is difficult to handicap a horse race event that would level the playing field.  The TC avoided the struggle of having to find equalizing handicaps and simply had all players compete at scratch.  Not surprisingly, win, place, and show went to players from the first flight.  While the format was unfair, another problem was players were not told of the format before being asked if they wanted to play in the horse race.  To eliminate this problem, the TC should specify how all aspects of a tournament are to be run well before the start of competition.   
•  Participation Determinants – The tournament was not well attended with only 70 entrants but with a capacity for 96 players.  Moreover, given the total membership, at least 300 potential players chose not to enter.  There are many reasons for this.  It is doubtful players recognized the inequity of playing from different tees and decided not to play. The flight structure was not available until the eve of the competition and therefore could not have affected the participation level.  More likely, players chose not to enter because they believed tournaments have a history of getting handicaps wrong, player handicaps are not adequately policed, and/or they have tired of seeing the same players winning low gross.  Another reason could be economics.  It cost a player $175 to enter.  If the player was fortunate to win his flight and get one closest to the pin he would receive $140 in pro shop credit.  So, even the winner does not get his money back and must be satisfied with only paying $35 for tournament food.  For half the field who failed to place, they are paying for meals with a retail value of $100 at most.  It is possible many members may view tournaments as profit centers for the pro shop and the food and beverage department and choose not to participate.  How the TC resolves the participation problem is yet to be determined.  One thing is clear, the TC should not impose tournament formats that favor one group over another.  Such mistakes as were made in this tournament only gives players one more reason not to participate.  It also indicates  artificial intelligence (AI) may be less of a worry than a lack of intelligence (LI).

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[1] United States golf Association, How to Conduct a Competition, Far Hills NJ, 2012.

[2] For more examples of mistakes in competitions from different tees see “How Not to Conduct a Competition,” ongolfhandicaps.com, June 14, 2014.

[3] For an examination of the equity of “equal net and gross” see “Is Your Tournament Equitable,” www.ongolfhandicaps.com, October 22, 2012.

[4] The USGA does not specify how rounding to the nearest integer should occur.  In the tournament in question, each player was given an integer scramble handicap and the two were added together to get the 18-hole handicap.  The 9-hole handicap was 50% of the 18-hole handicap rounded to the nearest integer.

The PGA Tour Forgets What It's About

The PGA Tour’s move to more no-cut tournaments neglects one of the most important reasons viewers watch golf tournaments. There has to be a compelling story to draw viewer interest. If not, you just have another LIV event with its dismal Nielsen ratings. The recent Honda Classic is a good example.  The tournament came down to a contest between Chris Kirk and Eric Cole. Kirk is making a comeback after fighting alcoholism.  Cole, who has own health problems, had a world golf ranking so low you wondered how he got into the tournament—until you saw his swing. Both players accredited themselves well in an exciting playoff.  They displayed class in winning and losing and showcased what the PGA Tour should be about.  To paraphrase the NFL, "On any given Sunday" anyone can win and not just the top 70.

Rory McElroy, who has turned into a flack for the Commissioner’s office, has said, “You ask Mastercard or whoever it is to pay $20 million for a golf event, they want to see the stars on the weekend.” The counter argument is, “If you can’t be in the top 65 and ties after Friday, are you really a star?  And do you want to see Rory with an early Sunday tee time fighting to come in 49^th?  And if Rory is correct, what about the sponsors of non-designated events?  They are guaranteed to have few or no "stars."   Treating a tournament as a second-class citizen may have been the reason Honda dropped is sponsorship of the Honda Classic after 42 years. Will the Tour be better off if sponsors in a similar position head for the exits?

Then there are some statistical problems that need to be answered.  First, World Golf Rankings (WGR) are a lagging indicator of performance.  Jon Rahm, for example, can play like a dog for a year and probably not fall out of the top 70.  The new format sounds more like a closed union shop than a meritocracy.  Second, is the WGR really that accurate?  Are the top 70 really the top 70?   Probably not.  But if you have the top 156 playing, you will most certainly have the real top 70 players teeing it up.

Aping LIV by going to more no-cut tournaments is both hypocritical and bad for business. The PGA Tour owes it success in part to nurturing young players to replace aging stars. If young players see limited opportunity, they will direct their talents elsewhere.  That will not be good for the health of the game or for the Tour.    

Handicapping a Skins Game for Par Threes

 

A group of players participate in a gross skins game and net skins game. There is a wide range of handicaps with players receiving 0, 1, or 2 strokes on a par three.  In the net skins game, nothing irritates the low handicap player as much a seeing his natural birdie tied by a bogey made by a player receiving two-strokes.   To right this injustice, the low handicapper suggests that players only receive one-half of their handicaps strokes on par three. That is, a player receiving two-strokes would only get one-stroke.  The player receiving one-stroke would only get one-half a stroke.

What are the implications of going to the “0ne-half Rule”?  A rigorous analysis would require scouring tons of data and using a simulation model to estimate which golfers win and which golfers lose under the different handicap rules.  Even then, the result would be imperfect since results of skins games depend upon the mix of players[i], a hole’s difficulty, its stroke allocation, and the abilities of players (e.g., long hitter, short hitter).  The importance of this problem does not call for that much work.

In this post, a more slothful approach is taken.  It is assumed three players play a par three with the scoring probabilities of each player shown in Table 1.  There are 36 possible outcomes each with its own probability of occurring.  For example, the probability of all three players making par is (.6 x .2 x .1) .012. 

Table 1

Scoring Probabilities

Gross Score	Player 1 (0 strokes)	Player 2 (1 Stroke)	Player 3 (2 Strokes)
Birdie	0.1	0.05	0.0
Par	0.6	0.2	0.1
Bogey	0.3	0.6	0.5
Double Bogey	0.0	0.15	0.4
Average Score	3.2	3.85	4.3

For each outcome, one of three players earns a skin or there is no skin.  A player’s probability of winning a skin is the sum of the probabilities of occurrence where he wins a skin.  Table 2 presents these probabilities for three handicap rules (no handicap, full handicap, one-half handicap).

Table 2

Net Skin Probabilities 

Handicap Rule	Player 1	Player 2	Player 3	No Skin
No Handicap	.505	.055	.020	.420
Full Handicap	.030	.117	.435	.418
½ Handicap	.196	.353	.198	.253

If the competition was only net skins, the ½ Handicap Rule would appear to be best.  The No Handicap Rule gives the low handicap player a big advantage and the Full Handicap Rule gives the high handicap player a big advantage. But the competition under consideration has both a net skin pool and a gross skin pool. Table 3 presents the probability of each player winning at least one skin.  

Table 3

Probability a Player Wins At least One Skin 

Handicap Rule	Player 1	Player 2	Player 3
Full Handicap	.52	.23	.45
½ Handicap	.60	.39	.21

These numbers do not represent the actual probabilities in a skins competition.  With many more players than the three used in the example, the actual probabilities will be much lower.  The probabilities in Table 3, however, do indicate the relative advantage of each type of player.  The Full Handicap Rule appears to best in terms of equity and simplicity of administration (1/2 strokes can be confusing).  Moreover, this analysis was done for par three holes which the high handicapper typically finds the easiest (i.e., scores the least over par).  Therefore, applying the Full Handicap Rule over all holes would tend to equalize the chances of all types of players earning at least one skin.

In the long run, this type of skins game is an annuity for the low handicap player and he should not begrudge the high handicap player who chips in for a three and wins a skin. 

 

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[i] www.ongolfhandicaps, “Why You Win (or lose) in Skins,” June 25, 2012.

The Selling of a Country Club Part 5

This is the fifth is a series on the Selling of a Country Club.  It documents how errors by an HOA Board can diminish its credibility and impose costs on its members. 

There is no doubt serving on an HOA Board is a difficult job.  Board members can become defensive when they believe, often with good reason, they are being criticized unjustly.  In some cases, Board members realize it is easier to manage without transparency.  If members do not know what to complain about, criticism will be is diminished. An example of this is how the issue of the property tax exemption for the Club was handled.  As detailed below, the Board’s actions can only be explained by its hubris.

The Master Association Board published a sales brochure, Better Together, that asserted if the HOA bought the Club, the Club would be exempt from $241,000 in yearly property taxes.  As a former adjunct professor of State and Local Government at UCLA, this struck me as too good to be true and probably false.  To validate the tax-exempt assumption, the President of the Master Association was asked if the assertion of the exemption had been corroborated by the Assessor or by the tax treatment of similarly situated HOA owned clubs.  In an email dated 4/25/2021 the President responded:

·       Yes, both were done. We also checked with the HOA owned courses that were part of DRM (Desert Resort Management) as the management company. There were 2 DRM managed HOA’s that owned clubs, and both are tax free…[1]

The President was then asked (email dated 5/7/2021) if the Board had any documentation from the Assessor affirming the exemption from property tax.   No response was received.  My inference was the Assessor did not give the Board any assurance about a possible exemption.

 

 Second, the Riverside County Assessor (email dated 4/28/2021) was asked the following question:

·       If a privately owned golf course is bought by an HOA, does the property tax disappear or is it allocated to homeowners? 

The following answer was provided by the Supervising Appraiser, Total Property & Exemptions in the Office of the County Assessor-County Clerk-Recorder (email dated 5/3/2021):

In response to your general question…, the property tax does not disappear, the property is still taxable to the HOA.

There was also empirical evidence the Club would not be exempt from the property tax. The Springs Golf Club sold itself to the Springs HOA in 2019 under terms similar to the purchase of the Club.  Examination of the history of paid taxes revealed the Springs HOA now pays the taxes that were previously paid by the Springs Golf Club—i.e., the property taxes did not go to zero.

When confronted with the Springs example, the General Manager of the Master Association argued (email dated June 10, 2022) the Springs example was not relevant and continued to vouch for the Board’s claim that Club would become tax exempt:

 The statements contained within the Better Together brochure are accurate, and no one was misled.[2] Further the statements contained in this brochure were confirmed by two separate legal firms, CPA firms as well as by employees of the County Assessor and Tax Collector prior to distribution as it (sic) not the association’s practice nor habit to distribute misleading information to the membership. 

 

When the General Manager was asked to produce any statement from the Assessor about being tax exempt, she refused writing (email dated June 13, 2022): 

You are welcome to “doubt” any statements; this does not place the association in a position of having to provide you documentation to “end the issue.”

 

It is doubtful any documentation exists.  

 

So where does the property tax stand?  The Riverside County Tax Collector issued a 2021 tax bill for the Club property.   The first and second installments went unpaid and late fees of 10 percent were added.  After July 1, 2022, interest on the outstanding balance was also added.  As an example, parcel 60211003 (i.e., most of the Clubhouse property) had an initial property tax of $10,844.02.  On August 31, 2022, the property tax bill had risen to $12,328.17 and was paid by the Master Association.[3] The late fees and interest accounted to a 13.7 percent in the property tax bill.  Assuming the total property tax bill for the Club was $245,000, the delay in resulted in penalties of $33,655.

The way the property tax issue was handled illustrates the governance problems at the Club.  When questions about the exemption arose, Board members should have been more aggressive in seeking the truth. Instead, they let the General Manager continue the charade in an effort to bluff and bully their way through the predicament.  The evidence is clear the Board erred in both not alerting the members about the property tax and not paying the tax on time.  

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[1] DRM’s experience may be with clubs that were always owned by the HOA.  In that event, the value of the common property would have been embedded in the price of housing and the HOA would not be subject to property tax.  This scenario was affirmed by the appraiser cited in the email dated 5/3/2021.  That would not be the case at the Club, however, since the Club was being purchased after the sales of homes.

[2] The Better Together brochure was misleading primarily by omitting key facts.  Missing was 1) any mention of the $300,000 the HOA would lose with the departure of the previous owner, 2) any mention of capital replacement costs for the golf courses, 3) the loss of cart parking at the Cantina, and 4) the loss of golf dues from 68 Premier members.   

[3] The Tax Collector wrote (email dated 10/12/2022) “The Master Association paid the prior year 2021/2022 taxes on 8/31/2022.”  Previously, the Master Association’s Treasurer was asked (email dated 9/21/2022) if the Master Association did in fact pay the 2021 property tax bill.  The Treasurer did not answer. 

Bradley S. Klein and the Fallibility of Experts

 

In April of 2020 Bradley Klein wrote an article (SI, Morning Read, April 29, 2020) predicting the long-term effects of the Covid outbreak on the golf industry.  This post examines the accuracy of Klein's predications.  It turns out that he was wrong on just about everything.  At the time, I wrote that his predictions were overly pessimistic, but I would evaluate the evidence after two years to see who was right.  Here is some of what he wrote so you can be the judge:

Based upon extensive conversations with industry professionals during the past few weeks, I found that these long-term trends are likely to emerge.

For Golfers

* Establishment of stringent measures for preserving social distancing, to be communicated clearly throughout the course.

* Provision of casual health-care stations, including hand washing and hand sanitizing.

* Removal of multiple touchable points on the course, including ball washers and towels, drinking fountains, benches, scorecards and pencils.

* Wider spacing of tee times– to 10-15-minute intervals or more – to allow for greater separation among groups.

* Significant reduction in aggregation of golfers before and after rounds, with attention paid toward less socializing in parking lots, patios and 19th holes.

* Restricted use of motorized carts, including limitations on shared use by non-family members.

* Increased tolerance of push/pull carts and widespread adoption of lighter carry bags, all designed to encourage walking.

* Gradual and limited return of caddie programs, emphasizing forecaddies and single-bag carriers, with players handling the clubs and caddies masked, gloved and expected to limit duties to yardage, ball hawking and conversation from a safe distance throughout the round.

* Limited availability of on-course bathrooms, subject to stringent measures of multiple cleanings per day.

For Private Clubs

* Private clubs positioned to enhance their non-golf services, including gym, health club, swimming, tennis, spa and child care, will be able to offer the kind of comprehensive experience of safety, nesting and family comfort that is likely to prove highly attractive in a post-pandemic culture.

* Private clubs that position themselves carefully can provide a wide range of comprehensive services that, individually, are struggling to survive in the marketplace. Movie and stage theaters will continue to struggle with reopening, as will gyms, hair and nail salons, and many restaurants. A great number of those businesses will disappear, thus creating a market niche for carefully planned club offerings.

* Likewise for private real estate golf communities, residents will come to value the onsite provision of functions formerly dispersed, from post office and shipping to medical and pharmacy, grocery shopping, hair and nail salons, massage and personal health training. Facilities that can provide these services will have a tremendous market advantage in the years to come.

In anticipation of that gradual return, the industry has aligned with an effort that entails a series of carefully specified steps designed to provide an environment at the golf facility that is safe for players, employees and the non-golfing public at large. Golf is uniquely positioned to make a comeback. It’s also a great opportunity to sell the game as fun, good for the environment and conducive to public health.

At the time, I thought Mr. Kelin was wrong about the long-term effects of Covid and wrote (5/1/2020):

Every item in your description of the future (Golf positions...Morning Read, April 29, 2020) implies less profitability for courses and less enjoyment for players.  Taken together, you are predicting a death spiral for the industry.  But you conclude "Golf is uniquely positioned to make a comeback.  It's also a great opportunity to sell the game as fun, good for the environment, and conducive to public health."  If I were your English teacher, I would red flag your ending as a non-sequitur and give you a courtesy C+.

Mr. Klein responded (5/1/20200: 

Thanks for writing. I appreciate the note. 

I'm not predicting anything other than that things will need to change for courses to thrive.

That's long been the fault of an overcrowded market; now add to that completely altered conditions of public health. Some will lose out, but all have a chance to be creative in adapting. You seem to want to attribute that to sensible changes to longstanding practice. Not changing is a sure fire way to go bankrupt.

Good luck in managing golf as we move forward.

I still disagreed and wrote (5/4/2020)

I see you take criticism as well as I do.  In your next article, write about how you sell the game as "fun" when:

1. Stringent social distancing is enforced that reminds a player his partners pose a death threat.
2. Flagsticks and other objects should be treated the same as toilet seats if not a third rail.
3. Motor cart use is restricted. 
4. There is limited availability of bathrooms.
5. There is a mandated reduction in aggregation of golfers before and after rounds.
6. My caddy is dressed like a long-term care nurse

I hope your model of the future will not come to pass.  Various levels of government are certainly pushing for it.   The history of pandemics, however, demonstrates that in the long-run business reverts to the mean.  I'll check back within couple of years (hopefully) to compare notes.  

Your fan and mid-tier club member (for now),

Mr. Klein responded (5/1/2020)

So what would you suggest for golf, then?

Here was my response (5/4/20200)

We seem to differ most on our level of optimism about the future.  You argue a new business model is needed.  I am not so sure.  In the short-run a club has no choice but to follow government mandates to assuage the fears of its customer base. The new motto for America is "We are all in this together but keep the f... away from me."   In the long-run (two years away), there will be either herd immunity or a vaccine.  Golf courses need to act prudently to see themselves through this period.  It would be presumptuous of me to prescribe how this can be accomplished. I would think, however, any survival strategy would not include hiring sales staff for membership and banquets that "will be less relied upon," creating an on-site mini-market, or adding additional staff for nail care.  Those actions would not be "simplifying the employee flow chart."  An important objective should be to convince the customer base to remain loyal.  "Hang with us and we will get back to the golf we all love" should be the daily mantra. It goes without saying keeping the restrooms' open should be an important part of any loyalty program.

Thanks for the interesting article.  You may be right on all accounts.  If in two years I find myself playing pickle ball, it will be an admission of your omniscience.

So, in the end who was right.?   Here is a test.  Go to any club and try to find any evidence a pandemic occurred.  Maintenance practices, food service, and playing procedures are back to what they were in 2019 contrary to Mr. Klein's predictions.  It does look like the pandemic increased the demand for golf resulting in higher daily fees and membership costs.  But that is the one thing Mr. Klein failed to predict.