Golf clubs at 10 paces over planned Royal Sydney revamp

Illustration: Rod Clement

Corporate doyenne Jillian Broadbent has been enlisted to calm what some have uncharitably labelled the “aged-care” revolt at president Graeme Bailey’s Royal Sydney, the Harbour City’s most prestigious ­private members’ golf and sporting club.

It’s the latest parry by Bailey’s Royal Sydney board, which this year has come under attack by former club captain Tim Rankine (who was the talk of many eastern suburbs Devonshire teas thanks to his failed tilt against Bailey for the presidency in March), and Rankine’s allies, former club captains Denis Lenagan and Ivan Haege.

The centre of their angst: ambitious plans championed by Bailey for a reportedly $40 million-$70m redevelopment of the clubhouse and fairways at the Rose Bay institution.

Some members are upset about the apparently hundreds of thousands of dollars spent on the scoping work for the redevelopment.

Bailey did not respond to Margin Call yesterday before publication.

The prospect of a two-year closure of verdant fairways would be a shocking disruption to many of the club’s retired or semi-retired members.

“We call them the ‘aged-care’ members. They’re the people with the most time to spend,” says one member, indelicately, of the source of the angst.

Others call them the “silver soul” of Royal Sydney, who want little more than fair use of the ­facilities for which they have paid a joining fee of about $25,000 and full annual subscription of about $5000 and whose dress codes they dutifully observe (tucked in collared shirts for golf, all whites for tennis, flat-soled shoes with RSGC logo-ed “sockettes” for croquet).

Margin Call has obtained correspondence Bailey has recently sent to Royal Sydney’s roughly 6000 members informing them a new “governance review working group” has been created.

Allens lawyer Diccon Loxton is chairing the group. Joining him are four club members: Broadbent (who plays golf and tennis socially at Royal Sydney in between her directors gigs, which include a seat on Gordon Cairns’ Woolworths board) along with lawyer Richard Fisher (a Sunday morning golfer and general counsel of Michael Spence’s University of Sydney), James Inglis (a horse enthusiast and “far country” club member) and former New York-based Merrill Lynch banker Priscilla Windeyer (who was married at the club in 2014).

Bailey will hope that illustrious group can restore order to this playground of Sydney’s establishment.

A Royal exemption

While things have been fraught in Bailey’s clubhouse, the finances at Royal Sydney are in much better shape.

Company records obtained by Margin Call show it last year made a $2.6m operating surplus.

That was down on the $2.8m surplus in 2016.

But those numbers in 2016 were boosted by the hosting of the Australian Open, golf’s most prestigious competition down under (and an event for which Bailey has said the controversial and expensive course upgrade is required).

Total members’ funds have now grown from $42.7m to $45.4m. And, as Royal Sydney is a for-members sporting club, the loot is all tax exempt. A useful kitty to fund Bailey’s vision.

The loooong weekend

With just six weeks to balance date, Myer’s new imported boss John King is already pulling the levers towards saving the fallen retailer from disaster.

Last Friday, the British retail industry veteran King — who’d officially been in the top job only about a week — slammed shut the doors to Myer’s Docklands head office in Melbourne.

All staff were asked to take the day off as annual leave.

That meant a four-day weekend for the department store’s administrators, thanks to King’s Friday holiday and Queen Elizabeth’s Monday birthday.

The royal break for the worker bees will reduce the leave liability on Myer’s balance sheet as the once iconic retailer’s balance date looms at the end of next month.

Myer’s deteriorating trading performance means the department store retailer, which had been run by its chairman Garry Hounsell since February until King landed, is getting precariously close to its banking covenant thresholds.

Myer’s net assets must stay above $500m and at the end of the year’s first half had fallen to $580m after an almost $1 billion asset writedown at the last full-year.

Less leave liability reduces Myer’s total liabilities and so helps keep total net assets as high as possible.

All this comes as Myer’s market value sits at about $340m.

That places further pressure on management and its auditors to consider another asset writedown, which would further challenge the covenant.

King might be wondering what the hell he’s got himself into, while after four months in head office Hounsell might be pleased he’s finally got the hell out.

Libs’ family feud

One sleep to go until judge Jonathan Beach delivers his words of wisdom on the family feud between president Michael Kroger’s Victorian Liberal Party and its biggest donor, the $70m Cormack Foundation.

Both sides of the nasty dispute were last night represented at an event Nick Cater’s Menzies Research Centre put on for John Howard at Melbourne’s Hotel Windsor to launch the former PM’s new book of speeches, The Art of Persuasion.

Kroger was along with Tim Smith, the member for Kew, and something of a conduit between the president and his parliamentary leader Matthew Guy (who, now five months from a state election, has more interest than most in Thursday’s judgment).

One of the president’s key allies on the Cormack legal action, Richard Alston was also along, with Alston’s fellow Vapold director Stuart McArthur and Alston’s fellow former Howard minister Nick Minchin.

Demonstrating Howard’s broach church of supporters, foundational Cormack member Hugh Morgan — who briefly took the stand in the federal court case’s three-day hearing in March — was also along.

A shame the event wasn’t held on Thursday night.

After Beach has spoken, the Victorian Liberals are likely to be in need of Howard’s persuasive powers.

Wylie very much alive

Margin Call erred in our Saturday column, mistakenly referring to “the late Rodney Wylie”.

There’s nothing late about Wylie, as many of the Australian business legend’s friends and admirers have alerted us.

Rodney, father of investment banker and Australian Sports Commission chairman John Wylie, celebrated his latest birthday in January.

Our sincerest apologies to one of the country’s corporate greats.