Cost of running a tennis club

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Deleted member 23235

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For fun, was doing back-of-the-napkin calculations of the initial cost and operational cost, and ultimately ROI of running my own club...

ended up finding someone else who's done it already:
https://www.ci.oswego.or.us/sites/default/files/fileattachments/parksrec/webpage/16068/lotennisreport_092712.pdf

In general, it seems like a lot of risk for not so much reward... Seems like this is not a good business to get into...

Thoughts from anyone in business, real estate, tennis industry, or better... anyone here own their own club?
 
D

Deleted member 23235

Guest
make it in an area where land is not conducive for general buidings. Cheap land.
then it becomes also an area where there are not that many people... feels like tennis is already in decline
 

ollinger

G.O.A.T.
I live not too far from your area and see a number of tennis clubs converting into indoor soccer/lacrosse/basketball type places for general purpose use and kids' parties. Doesn't seem like such a good time to open a tennis club currently.
 
D

Deleted member 23235

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I live not too far from your area and see a number of tennis clubs converting into indoor soccer/lacrosse/basketball type places for general purpose use and kids' parties. Doesn't seem like such a good time to open a tennis club currently.
not at all, and yes, per square footage... team sports will bring in waaay more money (though it's outrageous IMO how much they charge for team sports/practices... what the heck happened to kids self organizing and "practicing" by themselves?)
i recall rotary-phone-dialing my buddies to organize football, basketball, tennis, bike riding, man hunt (tag), etc... soccer wasn't that big back then.
 
D

Deleted member 23235

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then it becomes also an area where there are not that many people... feels like tennis is already in decline
part of the study noted that folks are typically unwiling to travel >15m to play tennis... sounds about right,... i tend to go further, but probably get annoyed beyond 15m, and typically must be with a group of folks as good or better than me.
 
not at all, and yes, per square footage... team sports will bring in waaay more money (though it's outrageous IMO how much they charge for team sports/practices... what the heck happened to kids self organizing and "practicing" by themselves?)
i recall rotary-phone-dialing my buddies to organize football, basketball, tennis, bike riding, man hunt (tag), etc... soccer wasn't that big back then.
Wow. Old man river.

Me too. Rotary phone, haha. Had the numbers of friends and family in my head. Or in an address book. Would call friends met at tournaments for a hit on weekends.

Team sports, in my day, were semi-organized. Not quite as cool as in movies like the sandlot, lol, but sort of in my town with touch/flag football, soccer and baseball. Hockey if the ponds were frozen. Bikerides, man. No longer impromptu.... no longer a way of life for a middle school kid. These kids today, they arrange a time to meet someplace...to ride their bikes..and they ask for a ride there with the bike on a rack. So pointless. Is this for transportation, fitness, or exploring the town? Hopefully all three. Does it have a $12-$20 lunch attached to it? Kids are such poseurs now, man.

Ok, rant over\
Back on topic...
I just got off the phone with an old friend asking me for advice on a multi-use sports property. He is in commercial real estate, and played tennis in college...was asking me because i still play a fair bit at various places. His possible venture is already losing money on outdoor tennis, and doing well with indoor volleyball and trampolining. Wants to explore indoor tennis. I am not sure people are willing to pay for this great game anymore.

I feel like more people are playing in general, just not as often? Not sure. Even a guy like me, who started in the tennis boom of the 1970s is slowing down a bit (just playing for fun...no tournaments or league/team tennis).

Oh, and his perspective was similar to yours, nytennisaddict, that the parents shell out a lot more for team sports than tennis.
Also, he told me that tennis folks generally eat good food or go to a deli for salads and sandwiches, while the team sports crowd consumes a ton of convenient snack bar food, which sells at low food costs and very high margins. Said this place's pizzamaker is basically a money printing machine when there is a volleyball event.

Part of me understands it is not very profitable. A parking lot would do better. But a part of me wants to invest, and go help manage as a part owner. I actually believe, with good, positive management, it could really go! Delusional?
Lots of moving parts, lots of demographics and metric to analyze. Is tennis declining, really? Neighboring clubs look to be doing well.

Great thread. I hope some of the frequent players, tennis pros, and businessmen around this forum can contribute. I will. Heck in here every couple of days.
 
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sureshs

Bionic Poster
I would like to own a club, as well as play and coach in it.

A person I know runs a badminton club here with 3 courts, all in what is essentially a leased big warehouse in a commercial zone. Why not try to have 3 indoor tennis courts in a slightly bigger space? There is rain and cold weather in the Nov to March months even around here, and players might appreciate a uniform atmosphere year around to play tennis.
 
D

Deleted member 23235

Guest
Wow. Old man river.

Me too. Rotary phone, haha. Had the numbers of friends and family in my head. Or in an address book. Would call friends met at tournaments for a hit on weekends.

Team sports, in my day, were semi-organized. Not quite as cool as in movies like the sandlot, lol, but sort of in my town with touch/flag football, soccer and baseball. Hockey if the ponds were frozen. Bikerides, man. No longer impromptu.... no longer a way of life for a middle school kid. These kids today, they arrange a time to meet someplace...to ride...and they ask for a ride there with the bike on a rack. So pointless.

Ok, rant over\
I just got off the phone with an old friend asking me for advice on a multi-use sports property. He is in commercial real estate, and played tennis in college...was asking me because i still play a fair bit at various places. His possible venture is already losing money on outdoor tennis, and doing well with indoor volleyball and trampolining. Wants to explore indoor tennis. I am not sure people are willing to pay for this great game anymore.

I feel like more people are playing in general, just not as often? Not sure. Even a guy like me, who started in the tennis boom of the 1970s is slowing down a bit (just playing for fun...no tournaments or league/team tennis).

Oh, and his perspective was similar to yours, nytennisaddict, that the parents shell out a lot more for team sports than tennis.
Also, he told me that tennis folks generally eat good food or go to a deli for salads and sandwiches, while the team sports crowd consumes a ton of convenient snack bar food, which sells at low food costs and very high margins. Said this place's pizzamaker is basically a money printing machine when there is a volleyball event.

Part of me understands it is not very profitable. A parking lot would do better. But a part of me wants to invest, and go help manage as a part owner. Like, I believe, with good, positive management, it could really go!
Lots of moving parts, lots of demographics and metric to analyze. Is tennis declining, really? Neighboring clubs look to be doing well.

Great thread. I hope some of the frequent players, tennis pros, and businessmen around this forum can contribute. I will. Heck in here every couple of days.
gosh, there are some childhood friend #'s I will NEVER forget (from dialing it so much :p)
bikerides... how could i forget! bike tag, etc... i now have a shed full of bikes, and they barely ever want to go. sad.
yeah, alot of arranged playdates... sad. i guess i'm guilty of that too... scared of kidnappings, molestors, etc... so arranged play dates has been the way for my kids too.

regarding trampolining... i went through the #'s for a franchise a buddy of mine opened up... seems like a gold mine (anything where alot of kids can gather seems to be a gold mine)... too bad i didn't have the capital or partners to invest at the time.
trampoline parks, activity centers, etc... seem to be the place kids go to self organize it seems (and parents are willing to pay).

lol, from money making aspect (i don't want to run the operations), tennis club seems like a loser. but was still considering it, just because owning it would mean i could play for free :p but to me it's too risky... alot of capital will be tied up, that could make more money elsewhere.

regarding, neighboring clubs... i'd bet the clubs have been there for a while (ie. 80's)... ie. property paid for... which is a big factor in your ROI (ie. anytime you're borrowing). it's a big nut to be paying back every month.
 
D

Deleted member 23235

Guest
I would like to own a club, as well as play and coach in it.

A person I know runs a badminton club here with 3 courts, all in what is essentially a leased big warehouse in a commercial zone. Why not try to have 3 indoor tennis courts in a slightly bigger space? There is rain and cold weather in the Nov to March months even around here, and players might appreciate a uniform atmosphere year around to play tennis.
less courts means less shared resources (structure, electricity, front desk person, etc...)... it's actually better (IMO) to go slightly bigger... say 6 courts.
 
D

Deleted member 23235

Guest
I would like to own a club, as well as play and coach in it.

A person I know runs a badminton club here with 3 courts, all in what is essentially a leased big warehouse in a commercial zone. Why not try to have 3 indoor tennis courts in a slightly bigger space? There is rain and cold weather in the Nov to March months even around here, and players might appreciate a uniform atmosphere year around to play tennis.
lol, i don't even want to coach in it... i'd just want to run the business.
 

chikoo

Hall of Fame
then it becomes also an area where there are not that many people... feels like tennis is already in decline
ummm...what is that saying...ahh.. remembered

"Build it, and they will come"

It is evident you do not want to spend time in marketing, or awareness. All you want is people to see you and drop by.
Sure. Take the corner space in downtown westchester, and then charge $250/hr for court space. People should be happy paying for it. No?

Here...this should help you

105 S. Columbus Avenue
Mount Vernon, NY 10553 ·

38,000 SF · Industrial For Lease
$17.11 /SF/Year

 
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Noveson

Hall of Fame
For fun, was doing back-of-the-napkin calculations of the initial cost and operational cost, and ultimately ROI of running my own club...

ended up finding someone else who's done it already:
https://www.ci.oswego.or.us/sites/default/files/fileattachments/parksrec/webpage/16068/lotennisreport_092712.pdf

In general, it seems like a lot of risk for not so much reward... Seems like this is not a good business to get into...

Thoughts from anyone in business, real estate, tennis industry, or better... anyone here own their own club?
Hey! Lake Oswego haha not too far from me. That's funny reading that study. Stafford Hills did end up being built, they have a super nice facility. Outdoor saltwater pool and everything. Spendy though
 
D

Deleted member 23235

Guest
ummm...what is that saying...ahh.. remembered

"Build it, and they will come"

It is evident you do not want to spend time in marketing, or awareness. All you want is people to see you and drop by.
Sure. Take the corner space in downtown westchester, and then charge $250/hr for court space. People should be happy paying for it. No?

Here...this should help you

105 S. Columbus Avenue
Mount Vernon, NY 10553 ·

38,000 SF · Industrial For Lease
$17.11 /SF/Year

ah, i see what you're saying... thx for the link.
i think part of me was also pigeon holing myself into buy an existing club (avoid build out costs, buy into an already established market, avoid needing to hire everyone, etc...) - presuming the opportunity arose.
 

chikoo

Hall of Fame
ah, i see what you're saying... thx for the link.
i think part of me was also pigeon holing myself into buy an existing club (avoid build out costs, buy into an already established market, avoid needing to hire everyone, etc...) - presuming the opportunity arose.
Yes. In my mind, that is a very rare opportunity. A club doing great does not provide an incentive for the owners to sell it - who wants to give an egg laying hen away? But if they are open to offers, they will generally be 1.5 to 3x the annual revenue.
Another reason could be change of ownership. Father is retired or dead, Son is a IT specialist with no sports inclination, no affinity nor aptitude to manage it. Chances are it is already going down the drain, and you would have to revitalize it, which would include most if not all the efforts required to start a new one.
 
D

Deleted member 23235

Guest
another popular option is bubbling public courts, and renting from the city... much yearly less overhead (lots of places around me have been doing that)
 

chikoo

Hall of Fame
just an FYI - the court I practice on, charges $2 for 1.5 hrs of play. It is an open air hard court.
The next best one charges $18/hr climate controlled indoor play.
 
D

Deleted member 23235

Guest
just an FYI - the court I practice on, charges $2 for 1.5 hrs of play. It is an open air hard court.
The next best one charges $18/hr climate controlled indoor play.
pouring salt on the wound? :p. 40/h by me.
 

Booger

Hall of Fame
Tennis is a dying sport. I shudder at the thought of attracting new players in a post-Federer world. Grandpa Fed has been carrying the tour and is responsible for millions picking up a racquet. We might all be dead before another American makes it to #1. Who is going to be excited to play once the tour collapses into nameless foreign mugs taking groundstroke practice for grand slam trophies? It'll be even worse than Murrovic.

If you want to own a club, I think your best bet is to buy an existing one that's shutting their doors. I think you'll be lucky to cover expenses in most circumstances, though.
 

chikoo

Hall of Fame
pouring salt on the wound? :p. 40/h by me.
They are not in the middle of downtown. Need to drive 15 miles to get there.

The ones in downtown are memberships only, and the memberships cost mucho $$$$,and another one is by invitation only.
 
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C

Chadillac

Guest
ummm...what is that saying...ahh.. remembered

"Build it, and they will come"

It is evident you do not want to spend time in marketing, or awareness. All you want is people to see you and drop by.
Sure. Take the corner space in downtown westchester, and then charge $250/hr for court space. People should be happy paying for it. No?

Here...this should help you

105 S. Columbus Avenue
Mount Vernon, NY 10553 ·

38,000 SF · Industrial For Lease
$17.11 /SF/Year

The problem with this is you can make more money turning it in to condo's. I played with a guy from DC (was here for a conference) and he said thats what happened to his, was also a great location

At otc we had to give the city 15% of total revenue (very good deal, 11 clay, 6 hard), then the city started to manage it and the pro shop rental alone turned into $500 a month. Another club (county) charges a flat fee of $2100 a month, no water/power bill etc.

You can bid on a country/city park or build your own. Building your own is very expensive. Fast dry is what i see of a lot of in florida charge 25000-40000 for each with no lights (probably a bulk discount though). No idea how much lights cost to put in or run per hour.
 

chikoo

Hall of Fame
The problem with this is you can make more money turning it in to condo's. I played with a guy from DC (was here for a conference) and he said thats what happened to his, was also a great location

At otc we had to give the city 15% of total revenue (very good deal, 11 clay, 6 hard), then the city started to manage it and the pro shop rental alone turned into $500 a month. Another club (county) charges a flat fee of $2100 a month, no water/power bill etc.

You can bid on a country/city park or build your own. Building your own is very expensive. Fast dry is what i see of a lot of in florida charge 25000-40000 for each with no lights (probably a bulk discount though). No idea how much lights cost to put in or run per hour.
or make even more money by becoming a consultant. Point is to play to your strengths and desires.
 
C

Chadillac

Guest
For fun, was doing back-of-the-napkin calculations of the initial cost and operational cost, and ultimately ROI of running my own club...
If you have a lot of lessons you can make it back. Womens and junior clinics are cash cows. You will make like $50 on every clinic for owning the court (depends on area), get a few courts going and your set.

You can also have events there, the problem with the public parks i mentioned, is you have rules like no alcohal and others things that limit the party.
 
C

Chadillac

Guest
or make even more money by becoming a consultant. Point is to play to your strengths and desires.
Ya, this guy seemed like he had a lot of money, we was a lobbyist for medial insurance i think. He gave me like $100 for an hour (i told him that was too much, he didnt care), he was really good too (former pro, but like you and he said, so much more money and much easier).
 
D

Deleted member 23235

Guest
If you have a lot of lessons you can make it back. Womens and junior clinics are cash cows. You will make like $50 on every clinic for owning the court (depends on area), get a few courts going and your set.

You can also have events there, the problem with the public parks i mentioned, is you have rules like no alcohal and others things that limit the party.
definitely... if you look at the link it shows that that is a big chunk of the revenues. followed by actual court rentals.
 
D

Deleted member 23235

Guest
ummm...what is that saying...ahh.. remembered

"Build it, and they will come"

It is evident you do not want to spend time in marketing, or awareness. All you want is people to see you and drop by.
Sure. Take the corner space in downtown westchester, and then charge $250/hr for court space. People should be happy paying for it. No?

Here...this should help you

105 S. Columbus Avenue
Mount Vernon, NY 10553 ·

38,000 SF · Industrial For Lease
$17.11 /SF/Year

lol coincidentally

http://www.onlyinyourstate.com/new-york/after-dark-ny/

my vernon, rated #7 on most dangerous places after dark in ny :p
 
C

Chadillac

Guest
lol, most interesting page is the end,... where they put revs and operational costs on one page :p
Wow, thats a lot of electricity and water.

I'd think the electricity would go down with led lights, yet the projection increases all the way to 2023.

There are a couple of things on there id question, but not a spreadsheet at midnight :)
 

every7

Hall of Fame
If you have the capital for indoor courts (done on the cheap) and teaching pros who are using the courts regularly, and can leverage court fees through the coaches, competitions, and social hitting, money can be made. Particularly if you live in an area with inclement weather conditions.

The most successful model is operating courts in a business park with affordable rent. You don't want to be paying retail or residential rents, but it still has to be somewhere reasonably pleasant to go.
 
D

Deleted member 23235

Guest
Wow, thats a lot of electricity and water.

I'd think the electricity would go down with led lights, yet the projection increases all the way to 2023.

There are a couple of things on there id question, but not a spreadsheet at midnight :)
didn't realize water costs is much,... probably for outdoor plants and stuff.

electricity is probably heat and air conditioning more so than lighting (guessing based on my home electric bill)
 
Here is an random idea. I've driven past houses with decrepit tennis courts on the property. What if you stuck a deal to rehab the court and use it to run clinics? Might be a lower risk way to dip your toe in the local market. I'll not sure what this would offer over just using public courts. Could you put a bubble in someone's yard?
 

movdqa

G.O.A.T.
For fun, was doing back-of-the-napkin calculations of the initial cost and operational cost, and ultimately ROI of running my own club...

ended up finding someone else who's done it already:
https://www.ci.oswego.or.us/sites/default/files/fileattachments/parksrec/webpage/16068/lotennisreport_092712.pdf

In general, it seems like a lot of risk for not so much reward... Seems like this is not a good business to get into...

Thoughts from anyone in business, real estate, tennis industry, or better... anyone here own their own club?
I've discussed it with people that I play with and we generally come to the conclusion that it would be a money-sink.

Our local club charges $12/hour for indoor court time. They are able to do that because it was the YMCA that bought out a healthclub at bankruptcy for peanuts. They also offer preschool and K-6 afterschool programs without having to pay property taxes because they are a non-profit. So they have really low costs overall. They do not make money on tennis. They took one of the tennis courts and converted it into a hockey rink (street). They get about $5 per player per hour so I think that they make about $60 or $70/hour compared to $12/hour for tennis. There are other programs that generate more revenue as well. A tennis court is a lot of space for only a few people.

One of the nearby tennis club continually complains about the YMCA as they lose customers.

We have a high-end club about 30 miles away and they seem to do very well. They have outdoor clay, indoor hard and swimming. They are in an affluent area and membership is quite expensive and it works in that area.

I know another club that's about 40 miles away. It's basically like a Costco of tennis. Just a building with the necessities of a tennis club - and nothing else. They don't have a gym, pool, track. Just tennis. Excellent instructors and the people that go there seem pretty serious about improving. And, it's in a very affluent area and they charge a decent chunk of change for court-time too.

My friend with the clay court in his backyard seems most happy with his situation. He plays at my club in the off-season and has people over during the summer. It cost him and one of my partners a lot of time in building it and, of course, the cost of the materials but that was long ago.
 

max

Legend
I worked for a private investment banking firm. We once had a client trying to sell a substantial club. Not very attractive; only so much you can sell and there's only so much potential in most local markets. Not a business to get into, unless subsidized by lottery winnings.

so MY plan is: win the lottery, buy a nice tennis club, add a small but nice bar and grill, and turn it into Max's Personal Hangout.
 

Znak

Semi-Pro
For fun, was doing back-of-the-napkin calculations of the initial cost and operational cost, and ultimately ROI of running my own club...

ended up finding someone else who's done it already:
https://www.ci.oswego.or.us/sites/default/files/fileattachments/parksrec/webpage/16068/lotennisreport_092712.pdf

In general, it seems like a lot of risk for not so much reward... Seems like this is not a good business to get into...

Thoughts from anyone in business, real estate, tennis industry, or better... anyone here own their own club?
PDF is no longer working, out of curiosity do you happen to remember the TL;DR version? :)
 

TnsGuru

Professional
Solar power would help with cost of electricity. Norcal has these solar panel things popping up all over the place. Might not be good for east coast or mid-west weather though, not enough sunlight during winter time I guess. :confused:
 
D

Deleted member 23235

Guest
PDF is no longer working, out of curiosity do you happen to remember the TL;DR version? :)
pdf works for me... scanning the cash flow analysis... i ultimately deemed this a "money pit" because the expense:rev ratio was 3:1 (eg. 300k in expenses for 100k net profit)... or as high as 7:1 (after reinvesting in building infrastructure)... feels like the investment is 1 "incident" away from sinking the business... in general, i want my ratios to be reverse!

but like someone else already said... since this would be a "hobby" biz for me, i'd need it backed by a significant bankroll just in case... (seems like this is a city run facility, so the bankroll are the tax payers).
 

Znak

Semi-Pro
pdf works for me... scanning the cash flow analysis... i ultimately deemed this a "money pit" because the expense:rev ratio was 3:1 (eg. 300k in expenses for 100k net profit)... or as high as 7:1 (after reinvesting in building infrastructure)... feels like the investment is 1 "incident" away from sinking the business... in general, i want my ratios to be reverse!

but like someone else already said... since this would be a "hobby" biz for me, i'd need it backed by a significant bankroll just in case... (seems like this is a city run facility, so the bankroll are the tax payers).
GTK, thanks for the follow up! Could be my work connection I’ll try at home
 
D

Deleted member 23235

Guest
Solar power would help with cost of electricity. Norcal has these solar panel things popping up all over the place. Might not be good for east coast or mid-west weather though, not enough sunlight during winter time I guess. :confused:
true true... i've been researching solar quite a bit recently (bought a harborfreight solar kit and batteries to play with).... can save quite a lot (even in east coast or mid west) especially if you can sched peak electric usage (eg. laundry) during high solar hours (eg. noon)
 
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