Pay Attention

A troubling new trend has newspapers and business journals combing through private clubs’ tax filings to find material for easy, hard-to-resist stories they can publish on clubs’ revenues—and on what individual club managers are paid.

When online publications go fishing with “click bait” (which helps them reel in readers, and thus advertising), they’re no different than the old anglers you see with lines hanging off a bridge—when they find something that works, they keep using it.

Joe Barks, Editor, Club & Resort Business

That’s why everyone in the club business should be aware of a troubling new trend that’s taken hold recently: newspapers and business journals combing through private clubs’ tax filings to find material for easy stories they can publish on clubs’ revenues— and on what individual club managers are paid.

While these publications have the right to access public information, it’s clear in most cases that they aren’t looking for, or then using, this data (which is often quite dated) because it has any real news value. Rather, they know it will be gossip-flavored “popcorn” that readers can’t pass up—and that will send their online ratings through the roof.

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And usually, the reporters who write about what they’ve come across are at best clueless, and at worst dangerously biased, when it comes to “interpreting” the meaning or importance of what they’ve found.

A recent series published by the Houston Business Journal captured all of the reasons for concern about where this type of “reporting” is going. After going through Form 990s from 2014 and 2015, the Journal first published an article headlined “Houston’s Wealthiest Non-Profit Country Clubs” that then reported revenue figures, not profits. (See what I mean about naivete and bias? Many of the clubs on the list actually operate at a loss and carry significant debt and could hardly be called “wealthy.”) The Journal also noted that the data was from a period that corresponded with the oil slump that affected the Houston-area economy during those years—but still, the clubs were all wrapped with the “Wealthiest” banner.

And the Journal’s first report clearly got readership, because the publication then quickly followed with two more: “Here’s How Much Local Nonprofit Country Clubs Pay Their General Managers,” and “Here’s How Much Local Nonprofit Country Clubs Pay Their Executive Chefs.” The gratuitous nature of these “reports” was bad enough—but the “analysis” that went with them was especially galling, clearly showing that the reporters had no idea of all that being a club GM or Executive Chef involves. The club GMs’ base salaries and total compensation were described as “more than double the Houston average for general and operations managers [using U.S. Bureau of Labor statistics],” leading to the conclusion that “local clubs are paying their general managers a pretty penny to oversee their properties,”

The basis of comparison used in the Executive Chefs report was even more absurd. The compensation packages of acclaimed chefs who run multimillion-dollar food-and-beverage programs were compared to “the average annual wage for a chef and head cook in the Houston area [of] $45,490.”

Yes, as full disclosure, we posted these stories on our own website, too—and got great click-through results when we did. But we did so largely as a heads-up that the same sort of “coverage” could be coming soon to a publication near you. If and when it does, you’d be wise to have your own stories ready in response.