Exclusive:Revealed: Private investors take control of famous Scottish golf club hit by funding woes

Plans could see financiers remain in charge of prized public asset until 22nd century

One of Scotland’s most prized sporting venues could be controlled by a group of private investors for the next century amid controversial plans to secure an injection of capital and transform it into a “world leading” tourism destination.

The historic Carnoustie golf links, which has been held in public ownership since the 19th century, is now being run on a day-to-day basis by a little known consortium of financiers as part of efforts to expedite the return of golf’s prestigious Open Championship.

Amid doubts over Carnoustie’s long-term future as a top-class venue and a lack of funds to make major improvements to on-site facilities, Angus Council, the cash-strapped owner of the links, has approved a short-term deal to hand control of the complex of three courses to a private company, Carnoustie Golf Heritage and Hospitality Group Limited (CGHH), arguing the existing model is “not financially sustainable.”

But talks on a longer-term deal are at an advanced stage, and could see CGHH manage and operate the courses until well into the 22nd century, raising concerns that one of the jewels in the crown of Scottish golf is essentially being privatised. Some critics have expressed concern the venue could ultimately fall into the hands of other parties, such as Saudi Arabia, or even US president Donald Trump.

Carnoustie has hosted some of the major flashpoints in the history of The Open. Picture: Warren Little/Getty | Getty Images

The changes at Carnoustie, detailed as part of Scorecard: The Business of Golf, a week-long series by The Scotsman scrutinising the financial side of the game in Scotland, mean that as well as bearing responsibility for the costs of running the links, CGHH is also receiving all the income from them.

Under the terms of that seven-figure deal, Carnoustie Golf Links Management Committee (CGLMC), a charitable company that has managed the courses for years, and which drew up the new proposals, has sold its intellectual property rights, including the ‘Carnoustie golf links’ trademark, to CGHH, with all its assets and staff transferring to the private firm.

The arrangement runs until 2033. But in what would amount to the biggest shake-up at the venue in living memory, the investors want a new, long-term lease to run until 2123.

Angus Council told The Scotsman it could not categorically rule out any future sale of land as part of the development. Documentation prepared for a public consultation makes clear the legal agreements underpinning the second phase of the plans would be “long term” and “akin to sale”, raising searching questions about the long-term future of one of Scotland’s golfing meccas.

The Scotsman is running a week-long series scrutinising the business side of golf in Scotland. | Scotsman

Talks underway over deal stretching into 22nd century

Carnoustie, an eight-time host of The Open, has been owned by the council and its predecessors ever since Arthur George Maule Ramsey, the 14th Earl of Dalhousie, sold the land to townsfolk in 1892 amid fears it was about to be acquired by the Army. Since then, its championship course has provided the setting for some of the most iconic flashpoints in the history of golf’s oldest major.

Although the developments at Carnoustie appeared to come out of the blue, talks between the council and CGHH date back to 2018 - the year it last hosted The Open - since which time the local authority has spent over £150,000 on specialist legal fees and financial advice.

The initial short-term deal was agreed in January, and negotiations about the longer-term agreement are well underway, with hopes that planning applications can be submitted as early as next summer. It is understood that a number of different development options are under consideration, including the development of a high-profile resort hotel.

CGHH made significant progress towards its ambitions in September 2023, when its subsidiary firm, Carnoustie Golf Links Properties Ltd, paid an undisclosed sum to secure the ground lease of the 96-room Carnoustie Golf Hotel, where it has already embarked on refurbishment work.

The consortium of investors want the long-term deal with Carnoustie links to be aligned to the venue's hotel lease, which runs until 2123. Picture: Phil Inglis/Getty | Getty Images

That lease runs until the year 2123, and documentation prepared for the public consultation, undertaken by the council, indicates the proposed long-term agreement surrounding the courses could be “perhaps aligned to the life of the lease of the golf hotel,” meaning the investors would effectively determine Carnoustie’s future well into the next century. The alignment option is favoured by CGHH, although Angus Council said tying the golf lease to the hotel lease was “merely a suggestion”, and that it had not taken a position.

Among community leaders in Carnoustie, there is a sense that CGHH’s plans represent the only viable avenue to ensuring the grand old links, and the facilities surrounding it, are rendered fit for purpose for the 21st century and beyond. “The international investors appear to be the only game in town as regards finance,” David Rorie, chair of Carnoustie Community Council, told The Scotsman. “To achieve the aim of again staging The Open, control of the town’s main asset has to be ceded to them.

“The suggested length of the future lease of the course is remarkable, and I suspect unprecedented. But presumably the investors require this length of time given the amount of capital they are prepared to put into the project.”

The scale of that capital injection has not been agreed as yet. But in a prospectus detailing the plans, Michael Wells, chief executive of CGLMC, pointed to investment of “up to £100 million. He told The Courier newspaper last year that without the changes, the esteemed venue would suffer a “managed decline”, and added the links was “not a commercial vehicle at its heart”, and existed to “protect local interests” and distribute funds to local good causes.

Carnoustie last hosted The Open in 2018, and Angus Council said its deal with the private investors is crucial to ensuring the tournament returns. Picture: Richard Heathcote/Getty | Getty Images

There have been multiple meetings between Carnoustie officials and executives at the R&A, organisers of The Open. The ultimate aim is to secure a multi-year agreement that will bring the event back to the Angus coast.

In a statement, CGHH said: “We aim to deliver plans for a modern, fit-for-purpose and sustainable golf tourism destination anchored by the continual improvement of facilities, including the Carnoustie Golf Hotel & Spa. The vision is underpinned by a commitment to protect and create local jobs, preserve local golf access, and benefit the people who choose to live, work, and visit Carnoustie and Angus.”

The statement added: “Angus Council will play an active and critical role as landlord and planning authority before any plans are finalised.”

Concern that involvement of investors is ‘too large a risk’ at prized public asset

Even so, the decision by the council, which is facing a funding shortfall of nearly £12m, to approve the initial changes in how Carnoustie is run comes despite numerous concerns raised by community groups, as well as season ticket holders at Carnoustie, surrounding the future management of the courses.

Jean Van De Velde's travails at the 18th hole at Carnoustie remains one of The Open's most memorable episodes. Picture: Ross Kinnaird/Allsport/Getty | Getty Images

Those doubts were laid bare in a survey commissioned as part of the public consultation. Once responses from CGLMC staff were excluded, a small majority of those who replied - some 50.8 per cent - said the proposed new arrangements did not provide Angus Council and CGLMC with “sufficient oversight and control” over future golf provision at Carnoustie, with a similar proportion (50.3 per cent) not supportive of the changes to the existing arrangements.

The community council had asked whether a community asset transfer might have been sustainable using charitable status to “attract funding” and “protect community interests in the links”, but said the option was not considered. The council, for its part, said it had looked at four alternative options which were deemed undeliverable or financially unattractive.

Amid wider concerns that CGHH will significantly hike up charges for visiting golfers to help fund their investment model, others have expressed concern about a lack of safeguards which mean CGHH could ultimately be taken over by other, more controversial parties.

“The transfer of a prized asset to a private company is simply too large a risk,” one respondent to the consultation said. “What if The Open does not return, hotel occupancy is below sustainable levels, the company goes bankrupt, or worse still is bought by Donald Trump. The land was donated to the town to benefit the people of Carnoustie and this proposal does not do that.”

Gary Player of South Africa holds the Claret Jug after winning the 97th Open at Carnoustie in 1968. Picture: Cowper/Central Press/Hulton Archive/Getty | Getty Images

The local authority has sought to address such questions, pointing out that “protections” will be included in a legal agreement to cater for a scenario where CGHH transfers ownership or control to parties who do not meet a “fit and proper” test. A spokesman said that definition meant “a person who is a respectable and responsible person of sound financial standing”.

He added: “As a private company, the council does not have a say on future investors becoming involved with CGHH, but further due diligence on all investors would be carried out before entering into any long-term agreement through phase two.”

As part of the deal, a specific Golf Access Rights Agreement has been struck to ensure any non-inflationary price changes or alterations in tee time allocations for season ticket holders require the prior consent of the council. However, CGHH is able to set the price of pay for visitors with no input from the council, which is not receiving any financial returns as a result of the changes.

Charity which ran courses hailed ‘most successful’ year to date

In addition to misgivings around the consortium taking control, there are wider questions over whether the changes surrounding Carnoustie’s future are necessary in the first place.

The accounts of CGLMC, which was ultimately incorporated as a company in 2011, and received charitable status three years later, show it has been performing well financially. In its first eight years, it brought in an average of £4.6m a year. And after the disruption of the Covid-19 pandemic, it generated revenues of £12.4m in the 12 months to September 30, 2022, £10.5m the following year, and £11.3m in the 12 months to September 30, 2024, with its reserves reaching nearly £6m. In its most recent accounts, its chairman, Colin Yule, hailed the trust’s “most successful financial performance to date”.

One source involved in the changes at Carnoustie, who did not wish to be named, said the council and CGLMC had little choice but to “gamble” on the investors making good on their promises, given the R&A, the organisers of The Open, had made clear the need for improved accommodation and visitor experiences surrounding the courses.

The links has been in public ownership since the 19th century. Picture: VisitScotland Airborne Lens | VisitScotland

“As a club with an internationally recognised championship course that’s in excellent condition, and as a charity with publicly-owned assets, Carnoustie is a success,” they explained. “The problem is the insistence that we have to scale up to Hoylake levels in order to meet the demands of the R&A. It’s not sustainable, it’s not right and it’s not what most members want. There’s real concern that the focus going forward is going to be attracting American tourists at the expense of the people who play here regularly.”

A spokesman for the R&A did not detail any specific works or the costs involved, but said the R&A had been approached by Carnoustie regarding its new structure and additional investment, and that it remained “supportive” of those plans. The spokesman added: “Carnoustie is an extremely important venue for The Open and we look forward to returning there in due course.”

Asked what improvements were demanded by the R&A at Carnoustie, and the costings involved, Angus Council said there was no “detailed specification as such”, but pointed out The Open as an event required a “full range of facilities which are of a sufficient standard for a modern golf championship”.

A spokesman for the local authority also said CGLMC had “limited assets of its own”, given the council owned the land used by the courses, and that while the council itself had considered acquiring the hotel and redeveloping it, this was “ruled out as a viable option from a risk perspective”.