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The Florenceville Curling Club On an unseasonably hot New Brunswick June day, it seemed odd to be discussing the winter sport of curling, but that's what Ray Brennan and Clayton Buckingham found themselves doing in mid 1989. The two men had met at the Florenceville Curling Club (FCC) to discuss the future of the 32 year old institution. Looking through thick glass windows at an iceless surface, Clayton realized that it would be October before the familiar sound of corn brooms beating against cold ice was heard again. Ray, too, found the club strangely silent as he sat down in a well-worn armchair opposite Clayton. Both men were longtime members of the club; Ray had also served as president in the early 1970's. He was blunt and to the point with his friend. 'The club can't survive another year with this kind of loss. We'd have to sell an awful lot of curling memberships to make up for this year's $12,000 shortfall." Both men realized that drastic changes were needed if the 1989-90 season were not to be the FCC's last. Executive members of the club's management team were to meet in two weeks for their annual summer meeting. As senior members of the executive, Clayton and Ray had been given a mandate to come up with recommendations to guide the future of the Florenceville community facility, and to lead it out of its financial difficulties. Curling in Canada Curling's status as a major Canadian sport is largely paradoxical. Many of the 753,000 Canadians who curl at least once a week are almost fanatically devoted to the sport. However, most other Canadians are either disinterested or lack information about this winter game. This case was prepared by Professor Peter D Sianchuk of Mount Allison University for the Atlantic Entrepreneurial Institute as a basis for classroom discussion, and is not meant to illustrate either effective or ineffective management. Copyright © 1991, the Atlantic Entrepreneurial Institute, an Atlantic Canada Opportunities Agency funded organization. Reproduction of this case is allowed without permission for educational purposes, but all such reproduction must acknowledge the copyright. This permission does not include publication. Curling is played by sliding 44 pound granite stones down a sheet of ice 14 feet wide and 138 feet long. Two teams, each with four members, typically play eight "ends" over a two hour period. See Exhibit 1 for rules and Exhibit 2 for a description of curling terms. The game originated on the frozen lochs of Scotland, but it was in Canada that it was developed and refined. In 1989 there were over 1,300 private and public curling rinks (or clubs) dotted across the Canadian landscape from the Inuvik Curling Club in the Northwest Territories to the Rattling Brook Club in Newfoundland. The majority of curling clubs were in the Prairie provinces and Ontario. Canada's national "grassroots" sport takes on an international dimension each year when the World Curling Championships are held. Although Canada has dominated the sport. other countries have enjoyed success including Norway, Sweden, Scotland and West Germany. The 1988 Women's World Championship team was from the Riessersee Curling Club in Garmish - Partenkirchen, West Germany. The two major Canadian championships are the Labatt Brier (for male curlers) and the Scott Tournament of Hearts (for female curlers). Held in February or March of each year, these two tournaments bring together the top competitors from across the nation. At that time, curling receives its greatest media coverage. In 1987, 1.8 million Canadians tuned in to watch the Labatt Brier on TV. Estimates cited a cumulative TV rating of 5 million viewers for all televised curling events during 1987 (Exhibit 3). The 1986 Brier in Saskatoon set an attendance record of 151,538 spectators for the weeklong event. Most participation in the sport is at the club level. In 1989 members typically paid between $100 and $300 for the right to curl for the season (each season usually lasts from October through early April). In 1989, the majority of curlers were in the 25-49 year old age group (Exhibit 4) and were mostly male (66%). Although the total number of participants in Canada had declined through the 1980's, there were increases in mixed competition. Mixed competition consists of teams of two male curlers and two female curlers. In contrast, competitive leagues often have teams comprised of only one gender or age level. Most curlers play for social reasons, to keep fit or for the competitive aspect of the game (in that order). Mixed competition seems to best satisfy all three of these criteria. A 1987 study conducted by the national curling body, Curl Canada, revealed that the majority of curlers in Canada (60%) were not members of a club, but played either as guests of a member, or in house leagues that rented ice to individual teams. The propensity to become a member tended to increase with age, frequency of play and length of time an individual had curled. History of the Florenceville Curling Club The FCC began rather modestly in 1957 with two sheets of ice (which allowed two games - a total of 16 curlers - to be played at once) and a total construction cost of $6,951.80. Twenty individuals donated $ 100 each, generating a building fund of $2,000. Many of the original contributors had never even seen the game played. Additional funds were raised through the issue of $25 shares. There were 65 members during the first year of operation, all male. On January 7, 1958, 38 women met at the rink and formed the Florenceville Ladies' Curling Club, thus expanding the membership base to over 100. By the early 1970's membership had grown to 150 curlers and there was a pressing need for expansion. In 1974, the building was expanded so that two more sheets of ice could be added, but it wasn't until the 1976-77 season that all four sheets of ice were fully operational. The small club, which had an $1,850 mortgage in 1958, owed the Bank of Nova Scotia $122,400 by April of 1977. Expenses for the 1976-77 year totalled $53,009. With a revenue of $50,754, the club faced an operating loss of $2,255. By the spring of 1979, the club was virtually bankrupt. Don Wishart, past President, blamed the financial problems on a lack of financial controls and too few curlers. The two problems were obviously related. Stopgap measures such as laying off both the bartender and the icemaker proved unsuccessful. This only put an increasing burden on the small contingent of volunteers who already kept the club in operation. In desperate need of cash, the club began an aggressive fundraising campaign in the autumn of 1979. A local company's $15,000 donation was matched through individual solicitations. New revenue-generating techniques such as "Club 2001", were instituted, and expenditures were tightened. No longer were free drinks given out by the club. Inventories were closely monitored and kept low. A better interest rate was negotiated with the bank. The club also invested $2,000 in a new electric duct heater which would decrease the electricity bill by an estimated $2,000 per year (a special air refrigeration system is necessary to maintain curling ice, and as a result the FCC incurred electricity charges of between $1,400 and $1,800 per month in 1988-89). 1 The 200 people put in $40 each. Prizes totalling $5,000 were awarded during the curling season. The club retained the $3,000 difference between revenues and prize money and used it to pay the interest on the mortgage. The second problem, too few curlers, was more difficult to overcome. A committee was formed to ask former members why they no longer curled. People complained that the club was too competitive, cliquish and that they didn't feel welcome. To overcome this perception, a Commercial or House League was established in 1980. Local companies, families, neighbours or fellow employees could put a team into the league at a cost of $40 per season. If 10 people were on the team, then the cost to curl was $4 per person, rather than the normal membership of between $70 and $100. Rules were relaxed and everyone was encouraged to change positions in order to learn the intricacies of the game. The league turned out to be a great success with 18 teams comprised of over 100 curlers enrolled in the first schedule and 26 teams in the second. By 1982-83, the FCC had reached its goal of getting more curlers into the club and showing them how much fun curling is. The FCC boasted 3002 members by 1984, an all time high. Taxes had been paid, and the mortgage, was ahead by $38,380. The club had successfully weathered the recession of the early 1980's. By 1989, the club once again found itself in financial difficulty. Memberships had decreased to 170 from the 1984 level of 300; this number still exceeded the 150 members (both social and curlers) who used the facilities in 1979. There was an increasing sentiment in the club that major operational changes were necessary. Volunteers had traditionally formed the backbone of the club, donating their time and energies to organize leagues, special events and tournaments. Volunteers also performed all necessary business functions, ensuring bills and taxes were paid. Volunteer "burnout" was evident at the FCC. In addition, operating expenses had exceeded revenues by $12,000. Members like Ray Brennan and Clayton Buckingham. who had been curling at the club for many years, realized the seriousness of the situation. The Florenceville Area Curling competes for consumer dollars with many other forms of entertainment. In Florenceville, competition includes other winter sports such as skiing, ice hockey and snowmobiling; social activities such as those offered by clubs like the Legion, Elks and Kinsmen; and in-home activities such as video rentals. Although Florenceville had a population of only 725, it was surrounded by a number of small communities within easy driving distance, and from which its membership was drawn. The towns of Centreville, Bristol, Bath and Stickney were all located within a 20 kilometre radius (Exhibit 5). Some membership was also drawn from Hartland, New Brunswick. These communities (including Florenceville) had a total population of 3,6933. Outlying rural parishes from 2 Heating problems at the Florenceville hockey arena (located next door) resulted in fans coming over to the FCC to warm up between periods of hockey games. This increased the number of social members at the FCC. Approximately 110 members of the 300 total were social and not curling members. 3 Statistics Canada documents 94,107 and 94,108. which the FCC might expect a few members included Aberdeen (population 1,192), Brighton (1,825), Peel (1,252) and Kent (2,248). Woodstock, the largest town in the area, was a half hour drive up the TransCanada Highway and had its own curling club so no FCC members were drawn from that area. In 1989 Florenceville had one ice hockey arena, one video store and one Legion Hall. In Centreville there was a Kinsmen Hall and an Elks Club, while a small Lions Club operated out of Bath. Snowmobiling and skiing were two popular sports for the residents of the Florenceville Region. People could choose from three nearby ski hills: Mars Hill, Maine (1/2 hour drive), Crabbe Mountain, Fredericton (11/4 hour drive) and Mount Farlagne, Edmundston (11/2 hour drive). The largest employer in the area was the McCain Food Products company which had its head office in Florenceville. From humble beginnings in 1957, McCain Foods had grown into one of the world's largest frozen foods producers with more than 30 manufacturing facilities in eight countries on three continents. Annual sales exceeded $1.5 billion. Other major employers were the Florenceville High School, Day and Ross Trucking Company in Hartland and Thomas Farm Equipment in Centreville. Agriculture played a major role in the economic viability of the area. Potatoes grown in the Florenceville area were sold worldwide. Florenceville had no radio station or newspaper. It was served by CJCJ-AM in Woodstock and WAGM-FM in Presque Isle, Maine. Besides large national newspapers such as the Globe and Mail, Florenceville residents read three local newspapers: The Woodstock Bugle, The Hartland Observer and The Victoria County Record (Perth). Club Management and Operations Like many other community-run, nonprofit organizations, the FCC was dependent upon volunteers for its existence. Members volunteered their time and effort in various capacities for the club's overall operation, sometimes as a club director. Usually a person with longstanding membership and experience would be elected president at the annual meeting. The president would be assisted by an elected vice-president, secretary and treasurer, and by several other directors who would organize leagues or special events. These directors were nominated at the annual meeting. The nomination process was informal; rarely was a vote necessary to ratify a new director. The Board of Directors was comprised of the elected officers and the directors nominated at the annual meeting. Directors had individual responsibilities (such as organizing the entertainment for the year), leaving operational decisions to the president. Ideally, the president was to be advised by other executive members but was often left in a lone capacity. This became especially problematic when a strongwilled, individualistic person was elected as president. The club often found itself propelled in a direction based on the desires of one person. The club's history suggested one person should not run the club alone, and that the club often suffered when presidents attempted to do so. The president had to carefully monitor the expenditures and revenues of the club. Revenues were generated from several sources. One of the most important revenue sources came from members' curling dues. See Exhibit 6 for a breakdown of fees. Income from dues declined from approximately $9,115 in 1988 to $8,708 in 1989. This reflected the declining membership figures for the club. Hall rentals also contributed significantly to revenues. Weddings, dances, bingos and other activities were held at the club, mostly during the summer. This helped to provide some cash flow during the off-season. However, revenues from hall rentals plummeted from $20,104 in 1988 to $9,800 in 1989, severely weakening the financial state of the club. 1987 figures were almost double those of 1989 at $16,614. Ray and Clayton agreed that this decline was a management issue, and that not enough effort had been put into utilizing club facilities. Other revenue was gained from bar services and the Ladies' club. Bar sales were a significant part of most small clubs' revenues since profit margins tended to be high. Financial statements for 1988 and 1989 are presented in Exhibits 7 to 9. Past promotional efforts at the FCC were limited - most of it at the discretion of the president. Early in the season, some advertising would be placed in The Hartland Observer and The Victoria Country Record to solicit new members and promote special events during the season. Flyers and local posters were also used from time to time. Like other curling clubs in Canada. the FCC benefitted from the high level of publicity generated in March by the Canadian and World Championships. Non-curlers' interest peaked at this time due to media exposure on CBC, CTV, TSN, radio and in print media. Very few clubs took advantage of this interest by having club promotions in the spring. Most clubs held promotions in the fall when the season was just beginning and interest was relatively low for curling. especially among non-curlers. The FCC also benefitted from the publicity generated by the McCain Super Spiel.4 Each year in early December, McCain Foods held this major national curling tournament in Florenceville. With prize money of over $15,000, the top names in Canadian curling came from across the country to compete for cash prizes in New Brunswick. In 1987 the Sports Network (TSN) broadcast the event, giving it national exposure. The Super Spiel gave the FCC an unprecedented level of publicity for a small town curling rink. 4 Spiel is a curling term to describe a tournament. The Problem Clayton Buckingham slouched down comfortably in his chair as he listened to Ray Brennan's detailed description of the problems facing the FCC. Although the problem was connected, Ray summarized the discussion by dividing the topic into two areas. He prefaced his summary by stating, "We may only be a small community-run organization but our problems are no different from those of large companies like McCain's or Day and Ross." "First, operations of the club need revamping; the executive structure of the club just doesn't work. We put too much reliance on one individual. I think all our presidents have been very capable but it's too much responsibility for one person. That's why we face so much 'volunteer burnout'. We heap too much on too few - there needs to be greater sharing of duties and responsibilities. I'd like to see us operate with a new structure - a board of directors that would replace our current structure of a president and an executive. The new board would be chaired by someone who would organize and delegate tasks but wouldn't have to be setting up tables before a dance. The chairperson could make sure the club is on course without making unilateral operational decisions and getting their hands dirty with mundane tasks. All decision making would be funnelled through the chair who would set regular meetings to deal with important operational problems. Smaller problems wouldn't have to be dealt with at the Board level." "A major part of this restructuring would be hiring a manager to run the club. I'm convinced the position could pay for itself through increased revenues and efficiencies. People would be more willing to help out if they knew there was someone else performing the bulk of the work." Ray passed Clayton a neatly typed list of the potential duties for a club manager (Exhibit 10). He then handed Clayton another sheet of paper covered with rough, handwritten notes. It was a summary of the effects that a manager might have on overall operations. Clayton squinted at it and asked his friend to summarize the content. Ray explained that the bar and canteen had traditionally been a strong revenue generator for the club and that extra effort was needed to ensure that it continued to generate a positive cash flow. A manager could supervise and administer this function. In 1987 sales were $11,215; they remained steady in 1988 at $11,014 but declined significantly in 1989 to $3,111. "In addition to other duties," Ray said, "the club manager could act as a bartender and ensure that the bar money is being carefully monitored. A return to 1988 bar sales alone would almost pay the manager's salary." "The Canada Employment Centre offers a one-time job development program. If we hire someone who has been drawing Unemployment Insurance benefits for at least 24 of the last 30 weeks then they'll pay us for up to 20 weeks of work at 40 hours per week. For 800 hours of work they'll give the club $6,000. I figure that the club would have to pay out approximately $9,000 in wages for the manager's first year. During the summer the manager could collect Unemployment Insurance benefits again." "Bar profits have traditionally been in the 30% to 40% range. I estimate an extra $12,000 to $15,000 can be brought in during the first year with a manager. Since we'd only have to spend $9,000 ourselves, it would seem like a good deal." "The manager would really help to take some of the pressure off the other members," agreed Clayton. Ray continued with his thoughts, 'The second problem requiring attention is the way in which we plan things. Other than our financial statements, we have no record keeping so we really don't know what has worked in the past and what hasn't. New people come and go on the executive and we don't have any continuity of ideas. What advertising has been done in the past? Why was membership higher in 1984 than it is now? Why do people stop joining after several years? I don't know how we'd go about doing it, but I think we should put something down on paper; something we can took at from year to year, revise and use for planning the following year. Sometimes I feel we're running around in the dark when the light switch is close at hand. A proper analysis would surely help us to promote the club better, I don't think we've been nearly as effective as we could be. A club manager could play a major role in this process." At the annual meeting in two weeks, Ray and Clayton would have to make the convincing argument that the future of the club depended upon their concrete recommendations to deal with the problems. Exhibit 1 Basic Rules of Curling two four-member teams compete against each other on a long narrow sheet of ice (138 feet long by 14 feet wide); at each end large circular targets are painted under the ice; the outer circle is 12 feet in diameter; the outer circle houses three smaller circles: the eight foot circle, the four foot circle and the button (the button is the centre of the target, and is approximately eight inches wide); each member of the team throws two rocks up the ice toward the circles for a total of eight throws; each team tries to put its rocks closest to the centre button; an offensive shot is one in which a team member tries to land his or her rock near the centre of the rings - a defensive shot involves trying to hit the opponents' rocks out of the circles, thus removing them from play; a team (or rink) is led by a skip who sets the team game plan and throws the last two stones; the vice, who throws the two stones before the skip; and the lead and second, who throw the first and second sets of stones, respectively; to begin play, the skip goes to the far end of the ice and places his or her curling broom on the circles as a target for the lead, second and vice to shoot at; after these three players have thrown their rocks, the skip returns to the throwing end of the ice to throw the last two stones; the 44 pound granite stones will spin to the left or to the right depending upon how they are released; by giving the stone a slight twist to the right or left (like turning the steering wheel of a car) the stone will "curl" to the right or left as it moves down the ice; the rock curls most as it begins to slow down (as it approaches the circles); by properly "curling" a rock a player can curl the rock in behind another rock, thus providing protection from the other team, who may try to remove it; after both teams have thrown their 8 stones (for a total of 16), points are added up; the team with the stones closest to the button counts the points; only one team can score in one "end"; an "end" consists of 16 total rocks being thrown down the ice in one direction; after each end, the curlers come back down the ice in the opposite direction; curling games usually consist of 8 or 10 ends; when a player throws a stone, two team members "sweep" down the ice (in front of the stone) with a brush or corn broom; the sweeping motion in front of a stone causes the ice to heat up very slightly - this in turn causes the rock to slide more; proper sweeping can carry a stone an extra 8 to 12 feet down the ice surface - this allows more precise shots by sweeping when extra distance is needed; sweeping also causes a stone to go straighter (as opposed to curling more) adding to the strategy of the same. Source: Company files. Exhibit 2 Basic Curling Terms Burned stone - if a player sweeping a stone down the ice happens to touch it with their brooms then it is "burned" and the other skip can take it off. This rule exists because the broom will cause the rock to change directions. Button - the center target of the curling circles. Each team tries to put their rocks as close as possible to the button. Delivery - occurs when the person throwing the stone releases toward the circles on the opposite end of the ice. End - occurs when each team has thrown their rocks in one direction up the ice. Points are tallied and then another end is played. Games of eight ends normally take two hours to play. Hack - rubber blocks in the ice similar to the starting blocks in a sprint race. The curler pushes off from the hack in order to slide upon the ice and deliver his or her rock. Hog - after a rock is delivered, it must go a certain distance down the ice in order to be in play. The rock must cross the hogline. If it doesn't the player is said to have "hogged" the stone and it must be removed from play. House - another term for the circles or target area. Lead - the first person on the team to throw two consecutive stones. Rink - a team, or a curling club fielding a team, are often referred to as rinks. Skip - the last person on the team to throw two consecutive stones. The skip calls the team game plan. Stone/Rock - terms for the 44 pound granite stone which is the key piece of equipment in a curling game. Sweeping - the brushing movement in front of the stone which causes it to either go further, go straighter or both. Vice - also referred to as a "mate", this is the second last person to throw stones, and often assists the skip with team strategy. Source: Company files. Exhibit 3 Television Viewership of Major Curling Events1
1 Annual viewership impressions reach approximately 5 million for all curling events on all channels; 1.1 million viewers are regular spectators. Source: Curl Canada – Three Year Promotional and Public Relations Plan, March 1988. Exhibit 4 Demographic Profiles of the Average Canadian Curler 1987
Source: Curl Canada – A Profile of the Canadian Curler, July 1987. Exhibit 5
Source: Adapted from the Atlantic Canada Vacation Guide Map. Exhibit 6 Membership Rate Structure Florenceville Curling Club 1988-1989
Source: Company records. Exhibit 7 Florenceville
Curling Club Ltd
1 Unaudited. Source: Company records. Exhibit 8 Florenceville
Curling Club Ltd
1 Unaudited. Source: Company records. Exhibit 9 Florenceville
Curling Club Ltd
1 Unaudited. Source: Company records. Exhibit 10 Proposed duties and responsibilities of the manager of the Florenceville Curling Club To operate the club within the budget set down by the Board of Directors. To supervise staff and assure that required help is at hand to carry out any special functions. To control incomes, expenditures and inventories. To utilize all ice available for rental. To oversee the services provided by the kitchen and bar. To promote activities within the club during the on and off season. To assure the building and premises are well maintained. To assure proper records are kept; to keep committee chairpersons advised on progress made toward objectives; to advise the Board of Directors of committees' progress. To see that sufficient supplies for the bar, kitchen and building are on hand. In coordination with the Club Treasurer to ensure that the operating statement is made available to the Board of Directors. To keep the Board of Directors informed of activities within the club. To advise the Board of Directors or Committee Chairperson of any deficiencies or wrongdoing etc., of which they should be aware. To select and train new staff members as required. To meet all new members and give them guidance as required. For each new curling season to provide charts of different committees with corresponding chairpersons. Provide posters etc, to help members become aware of all future activities. Advise committee chairpersons of special events and the financial and social results as soon as possible so chairpersons in turn can report to the Board. To contact and inform prospective new curlers. Co-ordinate the activities of committee chairpersons so as to avoid duplication of effort and misunderstandings. Booking of the club for social functions; ensure the function is properly prepared. Approve all expenditures and ensure that all income is accounted for. Ensure all monies are properly deposited each day in the bank. Make note of member and customer complaints, and advise committee chairpersons where necessary. Source: Ray Brennan's rough notes, June 1989. |
