Most social clubs across Karnataka could be staring at an unprecedented financial problem, having been shut for more than two months, translating to zero income but high overheads.
Karnataka has about 200 clubs, including 90 top social clubs, with memberships running into lakhs. Several clubs are already digging into emergency reserves, as payments needs to be made to employees and others.
One of the main sources of incomes for the clubs, coming from the bar and the canteen, has stopped since March 13 when the State government directed them to stop vending liquor.
The guest quarters that brings substantial revenue too has closed. In addition, many clubs are now waiving, completely or partially, the monthly subscription fee for March, April and May as members could not use the sports facilities. Club sources say that these constitute 90% of revenues.
“We are anticipating business to be dull for another 6-8 months or at least till December. The monthly dip in revenue is expected to be anywhere between ₹55 lakh and ₹58 lakh a month for our club,” said H.S. Srikanth, secretary of one of Bengaluru's premier clubs, Bowring Institute.
At least for the next six months, clubs will not have entertainment or sports activities, which will also bring good revenues, he added.
The government decision to allow clubs to exhaust their liquor stocks from May 8 has also not augured well.
Mr. Srikanth, who is also the president of Federation of Clubs, Karnataka, said: “Allowing us to sell at MRP rate and treating us on a par with wine store was a bad move. Unlike a wine store, our overheads are huge and we did not benefit from the decision. It is not viable, and clubs also operate on credit system. So cash flow is also less.”
Clubs that have guest quarters are not expecting many people to occupy rooms as most may avoid travel. Among the few options before the clubs is increasing the subscription fee. While any such decision has to be approved by the general body, where members are likely to oppose drastic increases, COVID-19 has also made convening a general body a challenging task, Mr. Srikant added.