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Proponent Group 2022 Comp Survey Selected Highlights

 

A Deeper Look at Coaches’ Instruction Revenue Sources and Averages

As has been the case for many years in our annual Operations and Compensation Survey and again in the 2022 results, about half of all member coaches’ revenues come from one-on-one private golf lessons. This year’s survey found that 51 percent of member revenues come from one-on-one private golf lessons as program offerings continue to broaden ($95,096 out of
$186,003 total average revenues). That is the exact same percentage as the survey found 10 years ago. Talk about steady. This number was also very similar among both Employees at 52 percent and Independent Contractors at 53 percent of their overall revenues.

As for overall revenues by position type, coaches who are employees averaged $161,030, independent contractors averaged 24 percent more at $200,124. Academy Owners with multiple instructors averaged 70 percent more than employees coming in at $274,132. All three averages were new record highs.

The $95,096 private instruction total was up from $67,373 10 years ago, or an increase of 41 percent, almost identical to the overall revenue increase during that time of 40.3 percent.

Among all of the 14 revenue categories we currently track, the largest increases over the past six years in average program revenues occurred in group lessons (up 294 percent since 2015 from $7,554 to $22,214) and long-term coaching programs (up 69 percent from $9,554 to $16,145.)

Ten years ago, long-term coaching programs and group lessons/clinics made up 9 percent of overall revenues (12,108 of $132,558). This past year they accounted for 21 percent ($38,359 of $186,003).

While coaches often talk about passive income (revenues produced for the coach when they are not personally teaching) have remained relatively small. Only $6,562 on average out of $186,003 or just 3.5 percent. (This included revenues from staff coach payments, endorsements, team coaching, tournament winnings, media and sales commissions.)

Online and remote teaching also gets a lot of attention these days but, so far, the average revenue from these internet lessons has stalled out at $2,982 per coach over the past year (up $63 per coach over a year ago) or just 1.6 percent of total revenues, although a handful of coaches reported more than $10,000 from remote lessons. The jury is still out on how big this
opportunity will become.

 

For Coaches Who are Employees, Pay Close Attention to Your Non-cash Benefits

As we reported in our 2022 Proponent Group Operations and Compensation Survey, cash compensation over the past decade has increased for Proponent Group coaches at twice the rate of inflation. Since 2011 our coaches have seen a 40.3 percent increase in revenues compared to a 20.5 percent increase in inflation over that time. Our coaches should be very pleased with these results, but for those who are employees, the non-cash compensation side of the equation hasn’t been quite as rosy.

Our survey has tracked 10 different non-cash benefits that employee coaches reported earning. Seven of them are down over the past 10 years while the other three were virtually unchanged. The biggest drop was in health insurance coverage dropping from 58 to 39 percent. Disability
insurance dropped from 39 to 21 percent. 401K facility matching funds slipped from 45 to 35 percent while 401K’s in general slid from 47 to 41 percent. Only 43 percent of clubs helped pay for training aids, down from 52 percent a decade ago. Education allowances dropped five points from 40 to 35 percent while club payments for PGA and/or LPGA dues dropped from 51 to 47 percent.

The three non-cash benefits that remained steady were coach playing privileges at 95 percent, family playing privileges at 72 percent and tournament entry fees paid by the facility inched up from 12 to 13 percent. Since most of our member coaches rarely compete in tournaments,
these three benefits have virtually no hard costs for the club.

Proponent Group strongly suggests that when negotiating an employee position that you specifically ask about all of the non-cash benefits listed above especially when the cash comp isn’t as strong as you were hoping for. Additional non-cash benefits may also include free or reduced costs meals during work hours, an apparel allowance from the golf shop and/or
equipment staff deals provided through the club’s manufacturer relationships. Many times non-cash benefits have very little hard cost to the facility compared to simply paying out a higher percentage of lesson income or a higher salary to the coach directly. This often allows for more negotiation than many coaches pursue before accepting a position.

For some of our members with beefy non-cash benefits the value can run well over $15,000 annually so it’s worth paying attention to any opportunity to boost your available non-cash compensation. This is especially true at a time when these benefits are generally eroding for golf instructors.

 

A Coach’s Largest Business Expense: Revenue Sharing or Rent/Lease Payments

The two largest expenses that golf coaches have to absorb in their businesses are revenue sharing and rent/lease payments. A coaches’ employment situation will likely determine if they pay one or the other. Usually revenue sharing happens when the coach is an employee often at a private club and rent/lease payments are for independent contractors who use space at a
public facility.

This year 49 percent of our coaches reported paying a revenue share with an average of 23 percent going back to the facility. This is an increase from an average of 21 percent five years ago. The average revenue share back to private clubs was 18 percent and to public facilities 26 percent. For those who paid a revenue share the average was $31,375 with the median at
$25,200.

For coaches paying rent or leasing (38 percent of coaches surveyed), the average annual payments totaled $17,941 with the median at $12,000. These payments were up an average of 9 percent from last year’s survey and are up 34 percent from a decade earlier versus inflation of 21 percent during that time.

Revenue sharing and/or rent lease payments were equivalent to 8 percent of gross revenues. Many factors could account for an individual coach keeping significantly more or less of their revenues such as facility type, guaranteed salary, teaching position type, business supports provided, etc.

 

 

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