Category: Business
Golf is big business. The most recent figures shows that the golf economy comes to more than $60 billion. Compare that the movie industry’s $57 billion. That’s bigger than the Gross Domestic Product of Peru, Romania, Ukraine or Morocco. How big has golf become? In 1958, Arnold Palmer was the PGA Tour money leader, with $42,000 in winnings. In 2005, Vijay Singh won a little over a million in just two tournaments. This section is devoted to the business of golf.
Rounds Of Golf Still In Decline
Golfweek reports that the number of rounds of golf fell again in October.
The number of rounds played in the U.S. dropped 6.5 percent in October and contributed to a 3.8 percent decline for the year-to-date total.
Year-over-year, monthly declines have been prevalent in 2011, which is projected to post an annual decline. That would mark the fifth consecutive year the number of rounds played has fallen. In the past decade, the rounds-played total has decreased from 518 million to 475 million.
October’s declines were led by less play at private facilities, which reported an 8.8 percent drop in rounds played. Year-to-date, private facilities were down 4.3 percent. By comparison, public-access courses showed a 5.9 percent drop in October, and they were down 3.6 percent for the first 10 months of the year compared with the same period in 2010.
I predict a lot more courses closing in the next couple of years. But I think its no more than a market correction. We overbuilt in Tiger’s heyday and things now are returning to normal.
Posted By The Original Golf Blogger
Caddy Employment
The New York Times’ Karen Crouse uses Joe LaCava’s decision to dump Dustin Johnson for Tiger Woods to take a look at the hiring and firing of the Tour Caddy:
LaCava’s decision to leave Johnson for Woods surprised some caddies, who are like horsemen when it comes to picking their rides. They place great weight on recent performances, which makes sense since, in addition to a base salary for the week — roughly $1,500, a large chunk of which goes toward travel and lodging expenses — they also receive a percentage of their boss’s earnings: 6 percent for a made cut, 8 percent for a top-10 finish and 10 percent for a victory.
Over the past two years, Johnson has had 13 top-10 finishes on the PGA Tour, including three victories. Woods has no victories and four top-10s. Johnson is ranked fifth on the current money list, 113 spots ahead of Woods.
“Dustin Johnson’s an A.T.M. machine,” said the veteran caddie Ricci Roberts, who is two weeks into his latest tour of duty with Ernie Els.
The instability of these relationships makes the Mickelson/Bones pairing nothing short of remarkable.
Posted By The Original Golf Blogger
Tag Heuer Drops Tiger
Tag Heuer has dropped Tiger as its spokesman.
Guess they wanted to go with a winner.
I’m open for negotiations.
Posted By The Original Golf Blogger
Economic Impact of the Open Championship
Golf is good for business. A recent analysis says that the Open Championship says that it will generate more than £80 million (about ($127,544,000) for the surrounding Kent county. Press release follows:
Posted By The Original Golf Blogger
Is Callaway In Trouble?
I was at scout camp last week and missed much of the news, but a story about Callaway replacing its executives intrigued me. It seems the company is in a bit of trouble:
Callaway’s problems are evident across various parts of its business:
• Sales in the critical metalwoods segment, the high-margin category on which Callaway built its brand in the 1990s, continue to lag. That segment accounted for $305.9 million in sales in 2007, but fell to $225.4 million in 2010.
• Despite Callaway’s acquisition of Top-Flite in 2003, the company has struggled to gain traction in the ball business. Total ball sales were $176.5 million in 2010, the lowest level since 2003, before the integration of Top-Flite.
• Domestic sales have been in decline, falling to $468.2 million in 2010 from $597.6 million in 2007.
• Callaway’s efforts to build its international business have met with mixed results. International sales peaked at $563.2 million in 2008, but fell to $495.5 million in 2010. Annual sales in Japan rose from $103.4 million in 2005 to $166.5 million in 2008, but since have been flat, finishing 2010 at $164.8 million. European sales, which reached $193.3 million in 2007, fell to $130.1 million in 2010 – far below even the 2005 level ($166.2 million).
I’m going to suggest that Callaway get radical in its efforts. De-emphaize the traditional marketing via pro staff and focus on getting clubs into the hands of “rain makers.” As I’ve written before, I don’t know anyone who buys a club because Pro X plays them. I do, however, know people who buy clubs and balls because their friends like them, because their pro recommended them, because they liked them at a demo day, or because a blogger wrote about them.
Posted By The Original Golf Blogger
The “Hope” Is No More
The tournament formerly known as the “Bob Hope” has gone the way of the “Crosby Clambake” and the Glen Campbell Invitational. Corporate branding has killed yet another historic name. Now, the pro-am will be known as the “Humana Challenge.” The event also has shifted from a charity-based function to an “issue-based” event. The issue is health care, and former President Clinton will be the figurehead.
Larry Bohannan also has an interesting article on the difficult negotiations that had to be worked out to save the tour stop.
Posted By The Original Golf Blogger
Gen Y Increases Golf Spending
Although the final tally is not significant, Gen Y—those 18 - 29—increased their golf spending by 27% between 2007 and 2011, according to American Express. Seniors, in the meantime, spent 21% less. Gen X and the Boomers spent 19% less.
But those totals are deceiving. Even with the increase, Gen Y comprises just 1% of golf spending. Boomers account for 56%.
Still its encouraging. Now what golf courses and manufacturers have to do is to figure out ways to keep the Gen Y players they have and add to that total. I’m not at all sure how you do that, though. There are quite a few Gen Y guys in my golf league, and I get the sense that for them its less about golf than about hanging out, drinking beer and smoking cigars. Golf is just one excuse—they also camp, fish, and hang out at the Moose Lodge—for a little male bonding.
Posted By The Original Golf Blogger








