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.

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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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.

June 28, 2011 |  Category: Business
Posted By The Original Golf Blogger

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Tiger Still Highest Paid Athlete

He hasn’t won in two years, but Forbes reports that Tiger Woods still is the world’s highest paid athlete.

Forbes counts not only winnings, but also endorsement fees and the like. Tiger’s annual income has fallen by $50 million over the last couple of years, but at $75 million annually, he still tops runner up Kobe Bryant, who clocks in at $53 million. LeBron James was third at $47 million, while Phil Mickelson was fourth at $46.5 million.

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

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Fila Buys Titleist

Fila has bought Fortune Brands’ golf assets, which include Titleist and Footjoy. It’s not exactly what I predicted—my choice was UnderArmor—but the principle is the same: a sporting goods company that, with the purchase of Titleist, would have instant credibility in the golf world.

May 20, 2011 |  Category: Business
Posted By The Original Golf Blogger

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Callaway May Buy Titleist

One report says that Callaway and the private equity firm Blackstone are combining forces for a bid on the golf assets of Fortune Brands: Achusnet/Titleist/Footjoy.

It has to be for the golf ball patents. They’ve already got a fairly well established “Callaway” brand in all the competing fields.

April 29, 2011 |  Category: Business
Posted By The Original Golf Blogger

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TaylorMade R11 Driver Foul Pole

image It’s a wonder no one has thought of this before: TaylorMade has turned one of the foul poles at the Padres’ Petco Field into a massive R11 driver. It’s 88 feet tall, and weights 950 pounds.

Natalie Gulbis was on hand for the ceremonies, and took some batting practice. Here’s what the Padres had to say:

The Padres announced Wednesday a partnership with the Carlsbad-based TaylorMade-adidas Golf Company, a unique enterprise that will be visibly present when the team begins a series against the Phillies on Thursday.

How unique and how visible?

Fans attending games at PETCO Park will see an 80-foot-high structure of TaylorMade’s new R11 driver affixed to the right-field foul pole, the first structure of its kind in the Major Leagues.

“I remember looking at the photograph thinking, ‘I don’t know how they’re going to pull this off,’” said Padres COO and team president Tom Garfinkel.

They did, though it took some work.

The two parties worked with Major League Baseball’s baseball operations team to ensure the design and installation of the R11 driver are in accordance with MLB guidelines—the foul pole is, of course, actually considered fair territory.

Also, Garfinkel said, all safety measures were taken as well to protect fans.

The structure, which is the first of its kind in Major League Baseball, weighs 950 pounds and the process of installation started on Monday and finished Wednesday with a total of 250 man hours needed to complete the project.

The redesigned foul pole will make its debut during the first game of a four-game series against the Phillies at 7:05 p.m. PT.

The shaft and grip of the R11 driver will run parallel to the existing foul pole. A 14-foot-wide by eight-foot-tall image of the R11’s white head will be displayed on the outfield wall.

“TaylorMade is a leading national brand, a thought leader based right here in San Diego,” Padres CEO and vice chairman Jeff Moorad said in a statement. “The Padres are proud to partner with yet another strong local company, and we are excited to showcase its presence at PETCO Park in such an innovative way.”

The three-year partnership between the Padres and TaylorMade will extend beyond the structure on the foul pole.

For every “drive”—when a Padres player hits a ball over the fence for a home run—TaylorMade-adidas Golf Company will donate $600 to a local charity.

“When we look at these new partnerships, we want to have an aspect of it that gives back to the community,” Garfinkel said. “We want something new for the fans ... and for it to have an element of San Diego in it, to celebrate San Diego.

“We also want to build awareness for the project and accomplish the business objective.”

For the Padres, projects like this add to their continued objective of building partnerships with local companies.

The Padres have added new local partners this season that include Frazee Paint, Torrey Pines Bank and Filippi’s Pizza Grotto to a roster of previously established local partners including PETCO, Sycuan, Jack-in-the-Box, San Diego County Credit Union and several others.

“We need the support of San Diego companies, and TaylorMade is a great example of that,” Garfinkel said.

I’ve said this before, but I’ll say it again in case anyone is listening: I want to be the first teacher with a major sponsorship. Just imagine it. I’d wear Nike (or Adidas—or whomever) apparel every day, and put the company logo in the corner of every one of my powerpoint notes slides. It’s the new frontier of advertising.

April 23, 2011 |  Category: Business
Posted By The Original Golf Blogger

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