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.

An Interview With The PGA Tour’s Chief Marketing Officer

Ad Age has an interesting interview with the PGA Tour’s Chief Marketing Officer, Tom Wade.

Wade has some interesting things to say about the younger players and globalization. And then there’s this:

Ad Age: How important is Tiger’s return?

Mr. Wade: Well, it’s very important. But the sport is not dependent on any one player, and never has been and never will be. And Tiger Woods will be the first to tell you that. At the same time, Tiger is arguably the greatest to play—an exciting player and exciting personality. He’s a huge asset for the PGA Tour.

Competitively, what we are most excited about is the young, new breed taking on the established stars. You have a situation where Tiger has work to be done—you know, he wants to win the most PGA Tour events, he wants to win the most majors—and he is highly, highly dedicated to that. And Phil [Mickelson] is not done. I’m sure he wants to put an exclamation point on a Hall of Fame career. And to have those established stars and these young guns battling it out for primacy is very exciting to us.

February 13, 2012 |  Category: Business
Posted By The Original Golf Blogger

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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.

December 14, 2011 |  Category: Business
Posted By The Original Golf Blogger

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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.

 

October 11, 2011 |  Category: Business
Posted By The Original Golf Blogger

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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.

August 10, 2011 |  Category: Business
Posted By The Original Golf Blogger

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Economic Impact of the Open Championship

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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:

Continued...

July 13, 2011 |  Category: British Open ChampionshipBusiness
Posted By The Original Golf Blogger

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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.

July 4, 2011 |  Category: Business
Posted By The Original Golf Blogger

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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.

July 4, 2011 |  Category: BusinessPGA Tour
Posted By The Original Golf Blogger

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