WSJ On The Year Of The Golf (Equipment) Free Agency

This is a nice big picture consideration by Brian Costa of the Wall Street Journal following up on post-Nike trend of players playing mixed bags either by force due to the Swoosh's equipment business demise, or going that route as club companies devote more resources to stars. (Thanks reader John). 

My ShackHouse colleague Joe House has noted on the show how the first three major winners this year are playing a mixture of clubs in looking for a wagering angle headed here to Bellerive, something Costa looks into and considers whether it's a trend. With purses rising and checks from companies flatlining or shrinking, the answer appears to be yes.

The math has also changed. Purse money continues to hit record highs each year, extending a boom that dates to the debut of Tiger Woods and survived his absence in recent years. At the same time, the market for equipment deals has cooled.

Agents and officials from the manufacturers say that a handful of star players—think Tiger Woods, Rory McIlroy and Dustin Johnson —still earn several million dollars annually on such deals. But the offers for most other players have dropped substantially. A midlevel Tour player who made $500,000 a decade ago might make $250,000 now.

Conde Nast Expects To Have Golf Digest Sold By Year's End

CEO Bob Sauerberg

The WSJ's Jeffrey Trachtenberg offers an update on Conde Nast's plans to have "signed agreements" to sell Golf Digest by year's end.

There was also this:

It’s possible that Condé could retain an interest in the golf business, depending on its future owner.

Why Are Golfers Less Prominent On Forbes Top Athlete Earners List?

Granted, we've seen the passing of Arnold Palmer, the injuries and struggles of Tiger Woods and the inevitable decline in endorsement dollars going to Jack Nicklaus as he gets older.

Still, golfers have always played a dominant role in Forbes' World's Highest Athletes list. But 2018's list only includes Woods in the top 20, followed by Mickelson, Spieth and McIlroy arrive next at 22, 23rd and 26th and Justin Thomas landed 66th on the back of his FedExCup win. 

No one will lose sleep over any perceived decline in golfer income given the number of millionaires in the sport. But it is fascinating that on the upper end of the endorsement pay scale, golfers appear less valued than athletes in other sports. 

My theories, substantiated by nothing other than observation?

They range from this being a simple transition period to strides made by many of the top athletes--particularly NBA players who take up 40 spots on the list--to improve their likability cache via social media, style and overall intrigue factor as golfers have become a little less accessible, less stylish and less willing to stand out. 

Bridgestone CEO Angel Ilagan Out...

Golf World's Mike Stachura reports that CEO Angel Ilagan is out after signing Tiger Woods and quickly guiding Bridgestone to the second spot in golf ball sales behind Titleist before slipping back 20% and well behind Callaway.

Ilagan was the only manufacturer CEO to endorse the idea of a distance solution involving the ball. 

Ben Alberstadt at GolfWRX.com has the full statement and wonders if Ilagan's stance on distance hurt his cause.

British-Based Group Working On $20 Million Purse "World Golf Series"

Andrew Both of Reuters reports on the British-based World Golf Group now a year into planning stages for a bold 15-20-event, $20 million purse series featuring top players and blue-chip sponsors. 

The players who join would likely say goodbye to the PGA Tour, a healthy retirement plan and world ranking points that help get them in majors and maintain endorsement deals.

“Every player’s deal is centred around world ranking points,” leading British agent Andrew ‘Chubby’ Chandler, who is aware of the proposed World Golf Series, told Reuters. 

“This series will never get world ranking points, so it will cost people money in the end. I think there are a lot of obstacles to get over." 

As Both notes, the proposal sounds "eerily" similar to Greg Norman's 1990's idea for a world tour of elite players.

What I can't understand: what need does this fill? Between the WGC's and Rolex Series, are fans clamoring to see the world's best get together more for double the purse size? If the venues and locales were special, there might be some intrigue initially. But there still needs to be some other twist that captures our attention. 

Developing...

Puffy Shirt Return: Phil Signs With Mizzen+Main To Allow "Move From The Board Room To The Golf Course"

The Forecaddie on Thursday-and-beyond's return of...the shirt. 

The full, and frankly spectacular, press release here:

Mizzen+Main Announces Partnership with American Golfer Phil Mickelson

Dallas, Texas, May 10, 2018: Transformative menswear brand Mizzen+Main announces a new partnership with one of the most renowned golfers and professional athletes of all time, Phil Mickelson. The five-time major champion has signed on as an official Brand Ambassador of the hyper growth, performance menswear line that has transformed an industry with its “best damn dress shirt.”

The long-term partnership makes Mickelson an equity holder in the company, joining Houston’s JJ Watt as a major partner in Mizzen+Main.

“I was waiting to find the perfect apparel partner that allowed me to move from the board room to the golf course. Mizzen+Main’s performance dress shirts enable me to do that. A big part of why I’m so thrilled to partner with them is I know all my endorsement partners and the thousands of professionals that work at those companies will love this shirt for their day to day too. These dress shirts not only look incredible but are so comfortable and versatile I can actually play golf in them. It’s remarkable to have a dress shirt I can wear from a meeting to the course. The game has changed,” remarked Mickelson.

Mickelson made waves in the sports world after wearing Mizzen+Main in a practice round with Tiger Woods at Augusta in April this year. His record as one of the best golfers of all time who represents several of the world’s greatest companies, along with being a maverick who charts his own path makes him a perfect fit for the brand.

“I started Mizzen+Main six years ago to make a dress shirt that performed at the same level as athletic apparel. Partnering with Phil is an extraordinary opportunity as one of the most renowned global athletes puts our product to the test on the course in a fun and unique way. We’re thrilled to have Lefty lead the way in the years ahead,” said Mizzen+Main Founder and CEO Kevin Lavelle.

As Brand Ambassador, Mickelson will wear Mizzen+Main’s performance fabric dress shirts regularly in tournament play, kicking off this week at the Players Championship®.

Callaway's First Quarter Sales Rise 31% To $403 Million

The only down side in these numbers: Jim Cramer will be feeling good about himself for bullishly pegging golf stocks as buy opportunities.

Otherwise, great to see golf companies selling stuff, indicating interest in the sport.

Highlights from Callaway's earnings report where the company earned $63 million/65 cents a share in the quarter, compared with $26 million/27 cents a share in the year-ago period. 

The earnings call transcript.

Have New Course, Need Sponsor: Memorial Park In, GC Of Houston Out

As the Houston Open tries to remain on the PGA Tour schedule where it's been since 1946, Golf Club of Houston is out as the host venue.

The Houston Business Journal's Jack Witthaus reports on the potential move to the downtown muni going forward. (A Memorial Park change in operator to the Houston Golf Association has been proposed.)

The move to Memorial Park would return the PGA Tour to a course it last played in 1963. Even if no sponsor is found for 2018, let's hope this leads to a long term goal of saving the event and carrying on the Houston Golf Association's efforts to refurbish the Houston city courses.

What Has Wall Street Bullish On Golf Stocks?

We know about the bizarre correlation between Tiger Woods' play and market bullishness, but given the recent market fluctuations Luke Kerr-Dineen understandably tries to surmise what seems to have Wall Street placing buy ratings on Callaway and Acushnet, among others.

The Tiger factor is again in play, but it may also be something as simple as this:

The growth is supported by an encouraging uptick in overall equipment sales as reported by golf research firm Golf Datatech, including a 23-percent increase in woods sales (in dollars) in March year-over-year, and a 46-percent increase in wedges.

Costco Is Selling A 4-Piece Ball Again

Thanks to reader Brandon for the alert on Costco's return to the 4-piece ball market, the same construction as their disruptive original. Last summer they unveiled their second ball, but it did not test as well and was of different construction.

They are also currently selling a 3-piece ball.

And the wholesale-ish retailer is not shying away from the ball business as they continue on-going litigation with Acushnet.

Patrick Reed Says Masters Win Validates His Manufacturer-Agnostic Strategy

It's interesting to see Patrick Reed suggesting his Masters win validates a strategy to go equipment-deal free. I wonder if other players will forsake the money and full support of a tour team?

Wait, this just in, sources close to 300 of the world's best golfers just whispered in my ear and said no &^$#%* way. 

Bill Speros with a roundup of Reed's New York visit following his Masters win.

“This has freed me up to use whatever equipment I want. On the equipment side, I’m just out there doing my thing. I’m using whatever I want to use,” Reed said. “I’m able to put 14 golf clubs and a golf ball in the bag that I feel are the perfect fit for me. To do that and come out with a my first major, it was a risk. But it was a risk that was the right one.”

Rapid-Expanding PGA Tour Superstores Moving Into Vacated Retail, Claim Better Attendance Than Tournaments!

As the retail sector struggles and my distant relative Geoffrey The Giraffe is retired, the burgeoning PGA Tour Superstore chain is actually looking to expand, including into old Toys R Us locations.

Thanks to reader FS for Brent Schrotenboer's USA Today feature on the appeal of the stores and their amazing foot traffic owed in part to having an indoor range experience.

Since 2011, the chain has more than tripled in locations, from nine to 32 now. It plans to open around five more this year alone and hopes to increase to 50 locations by the end of 2020.

The chain’s CEO, Dick Sullivan, even told USA TODAY Sports that he’s been scouting several old Toys R Us and Babies R Us locations that are up for auction after Toys R Us filed for bankruptcy last year.

“There are hundreds of them out there that are available and the perfect size for us, usually around 37,000 square feet,” Sullivan said.

This number on foot traffic, attributable to the ability to rent a range stall, get fit or take lessons, is rather amazing given where retail is going.

The PGA Tour is a minority owner of the chain and has a 50-year license with it that expires in 2060. About 7.5 million customers visited the Superstore in the last year, Sullivan said, exceeding the attendance at Tour events.

Taylor Made CEO: "We stand with Titleist."

It's fascinating on several fronts to hear that the CEO of Taylor Made is anti-bifurcation, oddly joining him with Titleist and...by the people he's imploring not to bifurcate: the anti-bifurcation USGA and R&A.

The potential for splitting the rules or playing tour-only specs prompted Taylor Made's David Abeles to issue a statement both reinforcing the importance of the rules while declaring that they should not change. 

"The TaylorMade Golf Company opposes any potential roll back of product performance or bifurcation of the rules in any form as we believe these movements will be detrimental to the game at every level," Abeles said. "Any separation from the rules or any step backward in performance would be disadvantageous to the growth of the game."

The full statement:

.@TaylorMadeGolf releases a statement from its CEO, David Abeles, regarding the USGA Distance Report.

“TaylorMade firmly opposes any potential roll back of product performance or bifurcation of the rules in any form…" pic.twitter.com/ueuc6QYNN5

— David Dusek (@Golfweek_Dusek) March 13, 2018

Titleist Rebuttal To The Governing Bodies: Distance Is Flat

It's always a fascinating thing to watch a company advertising more distance and then arguing against distance gains taking place. But I digress...

Noteworthy here is the CEO of Titleist making a more restrained argument than the PGA Tour Commissioner, and even a less misleading case than the PGA of America CEO in communicating his organization's likely stance on something not even proposed by the USGA and R&A.

Wacky days!

For Immediate Release...and again, revel in the even-keeled tone used by Acushnet CEO David Maher, a nice change from Wally Uihlein's alarmest rhetoric. I don't agree with his points but Maher presents his rebuttal in a way suggesting he would be a productive voice at any distance discussions. 

Distance Study 2017: Equipment Regulations Remain Effective 

FAIRHAVEN, Mass. (March 5, 2018) – As a proud stakeholder in the game, Acushnet Company is deeply committed to golf’s future health. Following today's publication of the 2017 Distance Report by the USGA and The R&A, it is important to ensure this topic is considered with balance and through a wide lens. 

"As a leader in the golf equipment industry, our team is conditioned to evaluate data to best understand contributing factors and root causes," said David Maher, CEO and President of Acushnet Company. "It is with this intent that we analyzed the 2017 Distance Report, and our findings continue to support the fact that equipment regulations have been effective. 

“A closer look into the numbers in the Report underscores the complexity of making any meaningful year-to-year comparisons,” continued Maher. “There were several contributing variables in 2017, including course selection and set-up, agronomical conditions and weather, which need to be considered when assessing the data." 

It's only been sixteen years since the Joint Statement. Twenty years before jumping to conclusions?

Below is a sampling of key findings from our research that impacted distance results in 2017: 

• At the 33 PGA Tour events conducted at the same venue in 2016 and 2017, where data was collected, the average driving distance increased +0.5 yards. At the eight events held at new venues in 2017, the average distance increased +8.0 yards. 

Imagine if there had not been a new Pro V1 flying new distances (as advertised) in 2017, there might have even been a dip in distance!

Oh, and about those major courses where the driving distances were longer: the driver was freely and regularly used at Erin Hills and Quail Hollow. Not much lay-up in those two courses. Last I heard, the golf ball, when hit with driver, goes longer than with a three-wood or iron.  

• Of these 33 PGA Tour events conducted at the same venue, 15 tournaments had a decline in average driving distance with one event flat to prior year. This highlights the year to year variability in distance. 

Don't make anything of those charts over many years where the lines start low on the left and rise to a higher spot on the right.

• The major championships conducted at new venues represented one-third of the total average driving distance gained in 2017: U.S. Open (Erin Hills vs. Oakmont +20.4 yards), Open Championship (Royal Birkdale vs. Royal Troon +8.1 yards) and PGA Championship (Quail Hollow vs. Baltusrol +7.0 yards). 

It's amazing what happens when a field of top players are free to hit driver off the tee instead of finding their play restricted by pinched landing areas.

  • The 2017 Masters average driving distance declined -0.4 yards. 

Take away the grainy fairway cut pushed down toward the tee and we'd actually get to see agronomy play a roll in distance averages. 

• Of the 25 Web.com graduates in 2016, 24 had shorter average driving distance on the 2017 PGA Tour, with an average decrease of -6.6 yards.  For the years 2015 to 2017, 74 of the 75 graduates had shorter average driving distance on the PGA Tour the following year. This can be attributed to course set-up. 

Yes, course setup may certainly play a roll in reducing the number of times players hit driver. 

“In any given year there are variables that impact distance, and any movement as in 2017 is not suddenly indicative of a harmful trend,” said Maher.

He's not wrong about 2017. It started long ago. 

“We continue to believe equipment innovation has benefitted golfers at all levels, and our analysis of the 2017 Distance Report affirms that the USGA and The R&A have effective regulations in place to ensure the game’s health and sustainability. We look forward to continued dialogue with the governing bodies and stakeholders as we seek to position the great game of golf for future success.” 

Wally, Wally, Wally...not even a technophobic media reference! You sure you picked the right guy?

The State And Future Of Arizona's Golf Industry

The Arizona Republic's Russ Wiles uses the Waste Management Open as a reason to consider the state of Arizona's $3.9 billion golf industry. The story is lengthy and contains some very good info if you're in the industry (thanks reader John for the link).

The questions and answers posed by Wiles are many of the same you've heard by now: things aren't too bad right now and even encouraging where facilities have made some adjustments, but the industry certainly isn't growing and the all-important M's don't want to participate in something taking four-five hours.

Nearly two-thirds of active players are 40 or older.

Participation among minors "has been declining for several years, as younger generations opt to play other sports or engage in other activities," said IBISWorld.

Also, it takes a lot of time to play golf well — not just in spending what can easily be five-plus hours for a round of 18 holes, but in the years of practice it takes to become reasonably skilled.

"As an industry, we need to find ways to have a one- or two-hour experience," said Gurnow. That's in addition to other ways the industry might appeal to newcomers.

This was interesting and a huge issue on the jobs front if the only answer is another TopGolf (not that there's anything wrong with TopGolf!).

Labor tops the list on the expense side, including for clubhouse/golf-shop staff and course-maintenance workers. Water and other utility costs were next,then course-maintenance supplies/services, general-administrative expenses and food/beverage outlays.

The highest number of Arizona golf-course jobs are in course maintenance — estimated at 5,000 positions in the 2014 report, followed by food/beverage workers (2,300), golf-shop personnel (1,780) and administrative staff (1,040).