What ClubCorp's IPO Says About The Golf Industry

Brendan Mohler analyzes ClubCorp's decision to go public to raise $300 million to reduce debts and the rough going to date despite the company having a model that might help keep the country club sustainable.

While the details of ClubCorp's debt are somewhat vague (though a portion probably results from the overall stagnancy of the golf industry), one thing is for sure: ClubCorp needed to raise at least $160 million in net proceeds in order to pay a bond redemption. The initial price range for a share of ClubCorp ($16-$18) did not spark the demand expected, so the company was forced to sell more shares at a lower price ($14) in order to acquire the capital needed.
 
ClubCorp has a lot of assets, but the company has not shown significant profit growth, and thus its stock is not an enticing buy. According to Francis Gaskins, Director of Research for Equities.com, ClubCorp's top-line revenue has only grown four to five percent in the last few years, which is more of an indicator of increased prices rather than the type of growth that excites investors.

USGA Prez Liked That FOX Execs Were Not Golf Experts

The Onionesque revelations have only begun on the USGA's massive sellout to FOX Sports.

golf.com's Michael Bamberger praises the USGA for making a "populist move" by outbidding NBC by about $20 million per year.

Here's the best revelation from Bamberger, who directly quotes USGA President Glen Nager saying something other than what appears in the USGA press release. In other words he spoke to the President and what came out was a little scary.

Glen Nager, the president of the USGA, who worked on the FOX deal with Davis and another USGA executive, Sarah Hirshland, said on Thursday afternoon that golf wants, and needs, to reach those football fans and NASCAR fans and baseball fans and soccer fans. Sean Hannity fans, no doubt, too. Nager liked the fact that the FOX executives were recreational golfers and not golf experts. The USGA was looking for something else.

"We have golfing sophistication," Nager said.

Such sophistication that they rolled out an expensive slow play messaging campaign, now openly mocked by two-time US Open winner Lee Trevino, yet they chose not to address slow play at their most prominent championship by using their very-own and proven-successful time par system (once again). The campaign was undermined immediately to sophisticated golf fans.

What FOX brought, among other things, was a boffo proposal to promote the U.S. Open, the other championships and to help make golf more of the mainstream sporting culture.

Nager also thought highly of convicted lobbyist Jack Abramoff.

Also interesting that Bamberger names Executive Director Mike Davis as a key member of the FOX deal negotiating team. And that NBC and ESPN don't know mainstream but FOX Sports does.

And then there was Bamberger's analysis of who FOX will put in the booth. For those elated that they won't have Johnny to kick around any more, Nager feels your pain. Seems Johnny fits into the populist concept.

This will not be an easy job to fill. Nager did not rule out the possibility of Miller following the USGA to FOX.

As Bamberger notes, that's not happening after Miller's spot-on reaction to the news. And if you really believe Johnny is that important, why didn't you just re-sign with the NBC/Golf Channel?

Since it became clear Nager was going to be USGA President, I've listened to USGA insiders, some past committee members and fanboy types insist his appointment would be disastrous because he's relatively new to the sport of golf. I disagreed, thinking a fresh perspective would be a positive. But who knew we'd get someone so willing to appeal to the lowest common denominator that he'd be willing to alienate two very powerful media companies and potentially millions of serious golf fans for the almighty dollar?

"TaylorMade-adidas Golf Posts Record First-Half Sales"

Another billion-dollar first half of the year for Taylor Made-Adidas.

For Immediate Release...

TaylorMade-adidas Golf Posts Record First-Half Sales Despite Late Start to Golf Season

Footwear and Iron categories grow double digits to lead the charge to over $1 Billion through Q2

CARLSBAD, CALIF. (August 8, 2013) – TaylorMade-adidas Golf (TMaG), the largest and most profitable golf equipment, apparel and footwear company in the world, announced today, Q2 sales of $454M (EUR 348M).  Despite unseasonably poor weather across the globe leading to a late golf season start, TMaG reports sales of $1.012B (EUR 771.077M) with currency-neutral, year-over-year growth of +2% for the first half.  What’s even more impressive, this is the second year in a row that TMaG has recorded more than $1 billion in sales through the first six months.  Sales increases were led by the iron and footwear categories, which each saw double-digit growth YTD of +16% and +18% respectively.  Regionally, the U.S., which accounts for more than half of TMaG’s global sales, posted YTD year-on-year sales growth of +8%.

 “Reaching over $1 billion in sales for the first half of year, while taking into consideration the slow start to the season, proves consumers demand the superior performance and innovation that goes into our products,” said Mark King, CEO and President. “We never stop striving to push the limits for the golfer and I believe that’s why our numbers continue to be so strong.”

Leading the Q2 charge was the stellar growth in the footwear and iron categories.  Footwear was driven by the success of the ultra-light family of adizero products, including adizero tour and adizero sport for both men and women.  The adizero franchise has broken numerous company sales records throughout the first half of 2013 that have stood since 1999, when the adidas Golf brand was formed.  Ashworth also experienced a strong Q2, and the combined dollar-share of the adidas Golf and Ashworth brands for June 2013 was 19.3%, up from 17.0% last year.