Right up front, we are not tennis players or big fans of tennis. Lets look solely at the numbers; for example, the 2013 tax return for the Worcester Tennis Club.
- total revenue in 2013 = 42,309
- profit/loss in 2013 = -26,010
- net assets on hand at end of 2013 = -6,084
Assuming that the numbers are the same in 2014 and 2015 and the club loses 26,010 each year, the net assets will be -58,104 at the end of this year. Actually, we think the losses will be greater since some members may have already left. A net operating balance loss of -75,000 at by the end of this year seems like a fair estimate.
Although Becker has bought the property for $750,000, there was some $39, 539 due in back taxes and water fees, add in a 10% broker commission fee and the net proceeds from the sale of the property may have been close to 625,000. Now take away the 75,000 estimated operating loss above, along with the 500,000 investment into the new facility with the City of Worcester, the best case scenario will be $50,000 balance when the new facility opens.
Our real life guesstimate is that there will not be much money at all to start with only 40,000 per year coming in in revenue. Will this cover the annual expenses?? We doubt it!! Our bet is that this will we need tax payer subsidies just like the golf course, which has lost over 1.3 million the past ten years.
Bottom line this will end up showing up on the annual city auditor’s report as the Worcester Tennis Club Enterprise account losing money each year just like Green Hill Golf Course Enterprise Account and the the way the Worcester Airport Enterprise Account use to, before the City of Worcester got out of the airport business. Purely from a financial view the City of Worcester should not be in non-core businesses like:
- Tennis
- Golf
- Parking Garages
- Convention Centers.
