A Market Transformed by Omission

In 1993, the U.S. federal government made a seemingly minor change to the tax code that would, over time, reshape the private golf industry from the inside out. As part of the Clinton administration’s Omnibus Budget Reconciliation Act, Section 274 of the Internal Revenue Code was amended to disallow deductions for dues, fees, and initiation costs associated with private social, athletic, and sporting clubs. This decision, driven by deficit reduction politics and populist optics, eliminated a financial engine that had sustained thousands of private golf clubs across the country.

For decades, private club membership—particularly in the corporate, legal, and financial sectors—was a sanctioned business expense. Memberships were subsidized by firms, justified as client entertainment or relationship development, and treated as a normalized cost of professional presence. When that deduction disappeared, the logic of membership shifted fundamentally from “strategic write-off” to “discretionary luxury.”

At first, the fallout was measured in resignations and attrition. Then, it metastasized into something larger: a structural reckoning that forced the industry to innovate, consolidate, and reimagine the very nature of what a private club meant to its members. What emerged over the following three decades was not just a more efficient operating model, but an entirely new playbook—one built around portfolio access, scalable lifestyle utility, and eventually, digital infrastructure.

This is the story of that transition—and a blueprint for what comes next.

The Structural Break: The End of the Subsidy Era

When the tax deductibility for private club dues vanished, it removed the invisible hand that had, until then, softened the perceived cost of membership. The psychological and financial impact was immediate. For many club members—especially those just below the elite tier—the economics no longer justified the experience.

Throughout the mid-1990s, private clubs across the United States experienced a marked decline in new enrollments. Member retention, once considered a formality, began to erode. The National Club Association reported that some clubs saw enrollment rates fall by 15 to 30 percent within three years of the policy change. Initiation fees, which once held prestige and premium status, became friction points. Corporate-backed memberships evaporated. Cash flows tightened. And member-owned clubs—often governed by aging boards and constrained capital reserves—found themselves unable to fund essential upkeep or strategic growth.

Simultaneously, the industry was digesting a supply-side overhang. The 1986–2005 period saw the addition of over 4,000 new golf courses in the U.S., many of them tied to suburban real estate development projects that had counted on continued demand from the baby-boomer cohort. Without the tax deduction to justify joining, the funnel of first-time members began to narrow just as inventories expanded. The result was a fragmented landscape defined by overbuilt supply, undercapitalized operations, and eroding member loyalty.

This set the stage for the emergence of the Multi-Course Operator.

The Managed MCO Model

Alongside these ownership-driven platforms, a parallel evolution has unfolded: the rise of managed-service MCO's, led by firms like Troon and KemperSports.

These operators don’t acquire clubs outright. Instead, they partner with owners—providing turnkey operations, digital systems, member engagement, and revenue optimization. This model has proven especially effective for resort destinations, underperforming private clubs, and global markets seeking modernization without ownership transfer.

Troon, managing over 825 properties across 30+ countries, has scaled a flexible, high-performance model that delivers global best practices while customizing local experiences. KemperSports, with deep roots across both private and municipal formats, often acts as a bridge between legacy operations and modern consumer expectations.

What these platforms illustrate is that scale doesn’t require ownership. Ownership and management are complementary levers—and when used strategically, they unlock flexibility, efficiency, and growth.

MCO’s as Orchestrators of the Modern Club Ecosystem

MCO’s today are no longer just aggregators of assets—they are becoming orchestrators of member ecosystems. Whether through ownership or management, leading operators are investing in technology, curating branded experiences, and expanding revenue layers across hospitality, real estate, content, and embedded services.

Their ability to operate across formats—equity, semi-private, resort, and residential—positions them as central players in shaping a scalable, experience-led future for golf. In a market that is fragmenting in some areas and consolidating in others, MCO's serve as integrators of infrastructure, brand, and member value.

The opportunity ahead is not just footprint—it’s orchestration. MCO's that can layer software, services, and strategic capital on top of operational excellence will define the next era of private golf infrastructure.

What's Next: From Access to Identity

The U.S. has more than 4.1 million private club members across approximately 3,600 clubs. Historically, these members were captured through exclusivity, location, and tradition. But the next generation of members—especially Millennials and Gen X—are behaviorally different.

They travel more frequently, consume experiences across channels, and expect digital utility alongside physical access. They are less loyal to single venues and more loyal to ecosystems. They don’t want to just belong—they want to be recognized, engaged, and unlocked.

This creates the conditions for a new class of platform: not defined by acreage, but by orchestration. Platforms that capture identity, not just membership. Platforms that monetize lifetime value through layers of affinity, loyalty, and lifestyle utility. Think Equinox, not Gold’s Gym. Think AmEx Platinum, not a punch card.

In this world, successful platforms:

• Curate bundled, affinity-led memberships combining golf, travel, wellness, and family programming
• Own the software layer that manages booking, CRM, member engagement, and analytic
• Unlock real estate yield through lodging, branded residences, and hospitality overlays
• Monetize engagement through events, content, sponsorships, and embedded fintech
• Create access networks that map social capital and build trust—not just throughput

Private golf becomes less about location and more about interface. The future isn't club vs. platform. It’s clubs embedded in member curated, value-add platforms.

The Stakeholder Perspective

The transformation of private golf over the past three decades has reshaped every corner of the ecosystem. Owners, operators, investors, and entrepreneurs now sit at a shared inflection point—each with distinct challenges, but also aligned opportunity.

Course Owners carry the weight of legacy infrastructure, often constrained by aging capital bases, member-governed governance, and limited reinvestment flexibility. Many are searching for new models that unlock growth while preserving the soul of their clubs.

MCO's have been the stabilizers and accelerators of the last era—bringing operational scale, professionalized management, and reciprocal access to a fragmented landscape. Their next chapter isn’t just about acquiring more—it’s about architecting more: richer digital interfaces, stronger data feedback loops, and more personalized, loyalty-driven member ecosystems. Operators like Troon and KemperSports are already leading this evolution—demonstrating how the managed model can deliver innovation without asset-heavy expansion.

Investors see a $20B+ addressable market where fewer than 7% of clubs are part of scaled platforms. Demand is durable, but institutional capital remains early. The opportunity lies in building platforms that don’t just own or operate—but orchestrate across hospitality, technology, real estate, and member engagement.

Entrepreneurs see a tech stack still defined by point solutions, legacy software, and limited integration. Friction remains across tee sheets, payments, member data, and event programming. The space is primed for vertical integration, embedded fintech, and AI-driven personalization—especially when paired with distribution through MCO and owner networks.