Risk vs. Reward

by JT McGee

“No way! I knew I remembered you from somewhere!”

A few months ago, somewhere between the fifth or sixth pitcher of beer I was sharing with a friend, we got to talking about the bad jobs we’ve had over our short lives with a friendly stranger.

As it turns out, this stranger wasn’t a stranger at all. He and I had worked at the same golf course together in high school. It was closing down, but not because of the reason you might think. Attendance had been relatively good – there isn’t much to do in my small hometown – but bad management squandered the place.

The golf course was owned by the pro who worked on site. He acquired it on a lengthy mortgage that spanned 25 years.

At some point, the new owner saw an opportunity to cut costs. The groundskeeper who had kept the grass vibrant for several years was a significant and unfortunate fixed expense. The owner quickly fired the veteran and made a new, less expensive hire.

Just weeks later, this new hire started the process of fertilizing the course’s many acres of pristine grass. He’d be back in the morning to start the sprinklers, fulfilling a requirement that the heavily-fertilized grass is watered on a strict schedule.

Except he didn’t go straight home to get some rest for what would be a very busy day. He went to the local bar, and in Midwest fashion, drank more than he could handle. His drive home would end abruptly at the hands of a sheriff, who arrested him on sight, clearly too drunk to drive.

The next day, the golf course’s owner and my new bar pal sat in the proshop looking over the course. Neither person had seen the groundskeeper that day, but both assumed he was busy at work finishing the job he started the day before.

By noon, the grass was slowly changing colors. By the afternoon, it was brown. By night, it would be dead.

They called the groundskeeper’s cell phone. No answer. Then they started calling anyone they could think of, until one of them had the bright idea to call the local jail. They found him, and the owner quickly rushed to bail him out.

Unfortunately, it was too late. Emergency action to solve a day of inaction yielded nothing. In just one day, the golf course experienced its worst day in history – a $3 million loss due to the death of every square inch of grass.

Ultimately, in an effort to save an estimated $20,000 in annual operating expenses, the new owner lost the entirety of his investment in the golf course. The previous owner, who had a clause that would allow him to take over the course due to mismanagement, similarly lost a fortune.

To the best of my knowledge, the course is slated to be sliced and diced into a number of lots for future home construction. Families who paid a premium for a home located on a golf course now own homes that are located in a construction zone for at least a few more years.

It’s a really unfortunate thing, but a really good lesson in risk management. Some risks just aren’t worth taking.

I took a cab home that night.

Leave a Comment

*

Previous post: